Boys-Only Boards

BusinessWeek

Nearly 30 public U.S. companies don't have women on their boards or among their highest-paid executives.

Aida Alvarez was 16 and studying at an all-girls school when another student asked why Aida was so full of questions. Alvarez remembers the teacher's response to this day: "Aida thinks like a man."

It's those kinds of "attitude barriers" that persist in the few companies that have refused to break the glass ceiling, says Alvarez, a former administrator of the Small Business Administration who now sits on the boards of Walmart (NYSE: WMT - News) and Union Bank.

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There are 29 companies in the Standard & Poor's 500 that are all male in decision-making roles, with no women on the board of directors or among the top five highest-paid officers, according to Bloomberg Rankings. They range from America's largest maker of uniforms, Cintas (Nasdaq: CTAS - News), to the company that produces Animal Planet and the Oprah Winfrey Network, Discovery Communications (Nasdaq: DISCA - News).

There are 47 companies, or 9.4 percent of the S&P 500, that have no women on the board of directors, according to Bloomberg Rankings. This list further narrowed that number to 29 companies by excluding companies with at least one woman among the highest-paid executives listed on the company proxy. For example, Philadelphia-based retailer Urban Outfitters (Nasdaq: URBN - News) did not make our ranking because while it does not have any women on the board of directors, two of the highest-paid executives on the company proxy -- Wendy Wurtzburger and Wendy McDevitt -- are women.

When called for comment, the spokeswoman for Discovery Communications, Michelle Russo, first explained that women hold top positions at the company and named a number of network presidents before she paused and asked, "We're on background, right?"

When the response was that she was on the record, Russo responded, "I need to end this conversation." Further calls for comment were declined.

The chairman of the board -- and former chief executive -- of Cintas, Robert Kohlhepp, was more direct. "Our next board member will be a female," he said in an interview. "That is a strong feeling I have and a strong feeling the rest of the board has."

Sound Business

More than half the 29 companies on this list refused any comment for this article. Some promised that the next board member would be a woman, and other companies pointed to a recent female board member or executive. Kohlhepp said that at Cintas, a female board member resigned a year ago.

"It makes no sense not to have diversity on the board," says Alvarez. At Walmart, she says, it's sound business to have women on the board, not least because more than half the customers and employees are women. The large public company doesn't exist, Alvarez says, that doesn't have women as end users or investors.

Even so, American corporate boards moved further from gender equality last year as the number of women on corporate boards of companies on the S&P 500 dropped to 16 percent from 16.6 percent, according to Bloomberg.

"It's totally insensitive," says Terry Savage, a financial journalist and longtime corporate board member. (She requested that Businessweek.com not cite the boards on which she sits, as she did not want to be seen as speaking for those companies.) "I find it simply astounding that a company that has at least half its ultimate users and customers as women, especially uniform making or media, I find it astounding that they don't have a woman on the board."

Few Women in Oil and Gas

The 29 public U.S. companies with no women among top executives or the board of directors cover a diverse selection of industries, including North America's largest maker of nitrogen fertilizer, CF Industries Holdings (NYSE: CF - News) in Deerfield, Ill., Santa Clara, Calif., analog chipmaker National Semiconductor (NYSE: NSM - News), and wireless communication provider MetroPCS (NYSE: PCS - News) in Richardson, Texas.

One-third of the companies are in oil and gas, such as Range Resources (NYSE: RRC - News), EOG Resources (NYSE: EOG - News), and Diamond Offshore Drilling (NYSE: DO - News), which all declined to comment for this story. According to Bloomberg Rankings, the oil and gas sector has the lowest percentage of women directors, at 9.6 percent.

In some cases, the argument is that there simply aren't enough qualified women to earn a seat on a specific company board. "We try to be color blind and not be prejudiced either way, obviously, but it tends to be an industry where, let's see, I don't think I can name a CEO of an oil and gas company that is a woman," says Phil Rykhoek, CEO of Denbury Resources (NYSE: DNR - News) in Plano, Texas, one of the companies on the list. "If you want a board that has oil and gas experts, then you're picking from the same pool. We have looked at women, and we have interviewed some, but we just haven't found one that we thought was the right candidate."

Lacking Technical Knowledge

A few other oil and gas executives responded in the same way as Rykhoek. Says the corporate secretary for Pioneer Natural Resources (NYSE: PXD - News), Mark Kleinman: "There is some challenge, because our board looks for deep industry experience and technical experience where it can find it. You have to look back to where this industry looked 30 years ago. That was a time when it was not heavily populated with women in the leadership."

Terry Savage, who sat on the board of Pennzoil-Quaker State for six years -- until the company was sold to Royal Dutch Shell (NYSE: RDS - News) in 2001 -- says there are women qualified to sit on the boards of oil and gas companies.

"The fact is that more than half the employees of that hugely industrial corporation were women," Savage says. "I did not have to be an expert on drilling to be on that board. There is always something that a woman can contribute."

Instances of Tokenism

The number of women on boards grew throughout the 1990s and 2000s, but that growth has leveled off in recent years. Experts and female board members interviewed for this story say that when boards have only one woman, it's often just a token gesture of gender diversity.

The vast majority of board members are men, and just 2.6 percent of board chairmanships are held by women, according to Catalyst, a nonprofit that focuses on women and business. Only three companies in the S&P 500 have women who hold more than 40 percent of the board seats: Avon Products (NYSE: AVP - News), Estee Lauder (NYSE: EL - News), and Macy's (NYSE: M - News).

"There is a concern that some of the initial progress was tokenism," says Joe Keefe, president and CEO of Pax World Management, a Portsmouth (N.H.) manager of mutual funds. "Many companies said, 'We have one woman on our board now, so we can check that box off; we have quote unquote gender diversity.'"

Diversity by Law

Numerous European companies have tried to enforce equality by creating quotas for corporate boards. Norway, Spain, and France have imposed legal quotas to increase board seats held by women. Currently, 37.9 percent of directors at Norway's largest companies are women, with the 40 percent target legally required by 2017 for companies with 500 employees and annual sales of more than $71 million.

"If you only have one woman on a board then it can be difficult," says Alvarez, who notes that the experience can be "isolating and intimidating." She continues: "If you have at least some numbers, then you feel more empowered about opening up and expressing your doubts."

Kohlhepp, the chairman of Cintas, a company with no women on the board or among the highest-paid executives, said the sole woman on the 10-member board of directors resigned roughly a year ago. "Our case is, you might call it an interloping period, where we lost our female board member and we are aggressively trying to find another," he said.

The board would be open to having more women on the board, Kohlhepp stated, but it is difficult to find qualified women. A recent attempt to hire a new member did not work out.

The female who left Cintas's board said she wanted to spend more time closer to home, giving energy to volunteer boards such as that of her church. "There was absolutely no bias against women," said Joyce Hergenhan, former board member and former executive at GE (NYSE: GE - News). "There was a very sincere, serious commitment toward increasing their numbers."

"It's hard for a man to put himself in a woman's shoes," Kohlhepp said. "So it's important."

Public Companies With No Women at the Top

AvalonBay Communities (NYSE: AVB - News)

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An apartment complex in Glen Cove, N.Y., being constructed by AvalonBay Communities.

Real estate investment trust
Arlington, Va.
Market cap: $11.48 billion
Chairman of the board: Bryce Blair

Company response: Richard Wolff, spokesperson for AvalonBay, sent the following statement: "While the Company currently has no women board members, it has had a number of outstanding female directors in the past. Many of our current vice presidents and senior vice presidents across a variety of functions are women, including in the areas of development, property operations, finance, accounting, and human resources. We continue to seek the highest qualified candidates, women included, as directors and senior managers with the purpose of assembling a team focused on successfully delivering shareholder return."

Cameron International (NYSE: CAM - News)

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The Cameron Horizontal Connector, for connecting flow lines and export lines in subsea production.

Oil and gas pressure control manufacturer
Houston
Market cap: $11.57 billion
Chairman of the board: Jack Moore

Company response: Rhonda Barnat, spokesperson for Cameron International, declined to comment.



CF Industries Holdings (NYSE: CF - News)

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CF Industries, North America's largest nitrogen fertilizer company, is led by Stephen Wilson, president, chief executive officer, and chairman of the board, shown during a January interview.

Nitrogen and phosphate fertilizer manufacturer
Deerfield, Ill.
Market cap: $10.37 billion
Chairman of the board: Stephen R. Wilson

Company response: Susan Fisher, spokesperson for the company, sent the following statement: "CF Industries embraces equal opportunity employment at all levels of our organization. As our company grows and extends its leadership in nitrogen and phosphate plant nutrients, we always seek to add qualified candidates."

Cintas (Nasdaq: CTAS - News)

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Cintas recruiter Lily Sprinkles talks with a job-seeker during a San Francisco job fair in 2010.

Designs and manufactures uniforms
Cincinnati
Market cap: $4.62 billion
Chairman of the board: Robert J. Kohlhepp

Company response: Chairman Robert Kohlhepp said: "Our next board member will be a female. That is a strong feeling I have and a strong feeling the rest of the board has. We got fairly close four or five months ago and we're getting close gain. Our next board member will be a female."

Denbury Resources (NYSE: DNR - News)

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Denbury executives ring the closing bell at the New York Stock Exchange in 2007.

Gulf Coast oil and gas operator
Plano, Texas
Market cap: $7.8 billion
Chairman of the board: Wieland F. Wettstein

Company response: In an interview, CEO Phil Rykhoek said: "We try to be color-blind and not be prejudiced either way obviously, but it tends to be an industry where, let's see, I don't think I can name a CEO of an oil and gas company that is a woman. If you want a board that has oil and gas experts, then you're picking from the same pool. We have looked at women and we have interviewed some, but we just haven't found one that we thought was the right candidate."

Diamond Offshore Drilling (NYSE: DO - News)

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The semi-submersible rig called Ocean Guardian under tow in British coastal waters in 2010.

Oil and gas drilling
Houston
Market cap: $9.45 billion
Chairman of the board: James S. Tisch

Company response: Les Van Dyke, spokesperson for the company, declined to comment for this article.


Discovery Communications (Nasdaq: DISCA - News)

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Discovery Communications President and CEO David Zaslav at a conference in 2009.

Produces educational television and media
Silver Spring, Md.
Market cap: $16.85 billion
Chairman of the board: John S. Hendricks

Company response: Michelle Russo, spokesperson for Discovery Communications, declined to comment for this article.


EOG Resources (NYSE: EOG - News)

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Mark G. Papa, chairman and CEO of EOG Resources, in a company headshot.

Oil and gas developer and producer
Houston
Market cap: $27.58 billion
Chairman of the board: Mark G. Papa

Company response: K Leonard, spokesperson for the company, declined to comment for this article.


Federated Investors (NYSE: FII - News)

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A Federated Investors building.

Investment management services
Pittsburgh
Market cap: $2.6 billion
Chairman of the board: John F. Donahue

Company response: Melissa Ryan, spokesperson for Federated Investments, declined to answer direct questions about the makeup of the board and sent a public document that explains company policy: "Though the Board does not have a formal policy regarding the consideration of diversity in identifying nominees for director, the Board believes directors should be selected so that the Board is a diverse body."

Fidelity National Information Services (NYSE: FIS - News)

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The Jacksonville (Fla.) headquarters of Fidelity National Information Services.

Payment services
Jacksonville, Fla.
Market cap: $9.54 billion
Chairman of the board: William P. Foley II

Company response: Lisa Alessandro, spokesperson for Fidelity National Information Services, declined to comment for this article.


Click here to see the entire list of Boys-Only Boards

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