Women in Business Roundtable
By Kim Lange, PricewaterhouseCoopers
The topic of women, i.e. the lack of women, serving on boards of directors has been discussed countless times over the past few years. However, it's an issue still very relevant, as men still greatly outnumber women on boards of major businesses.
On May 21st, this very topic was the focus of a "Women in Business" Roundtable at the University of Illinois College of Business, sponsored by PricewaterhouseCoopers. The session took the form of a panel discussion, moderated by Randi Blume, Vice President Commercial Banking for Charter One and also a UIUC alumna. In kicking off the event, Blume quoted Winston Churchill: "You make a living by what you get. You make a life by what you give." Three renowned Chicago women participated in the discussion and demonstrated how they have lived up to this quote.
Doris Christopher is the founder and chairman of Pampered Chef of Berkshire Hathaway Company. She is a graduate of UIUC and is an active board member of the Direct Selling Association and the Direct Selling Education Foundation, of which she became Chairman of the Board in 2007. Christopher also serves on the boards of America's Second Harvest, Better Business Bureau of Chicago and Northern Illinois, the University of Illinois Foundation, and Dominican University's School of Business Advisory Council.
Ann Cresce, Senior Vice President and General Counsel for the Chicago Climate Exchange, also currently serves as the Exchange's Corporate Secretary on its Board of Directors. She holds a BS in Finance from UIUC and a JD from Chicago Kent College of Law, and has sat as Corporate Secretary of the Chicago Mercantile Exchange Board of Directors.
Jean Reagan joined TranzAct Technologies, Inc. as Vice President and CFO in 1987 and has been President of the company since 2000. Jean earned a BS in Accounting from UIUC and a Master's in Management degree with a minor in finance from Northwestern University. She serves on the Board of Directors for Century Insurance, is a member of L3's Board of Directors, and is a chairperson on the marketing committee for the 2009 Solheim Cup at Rich Harvest Farms in Sugar Grove, Illinois.
All of the panelists shared how they were chosen to serve on the boards they are involved with. For Reagan, it was a case of being in the right place at the right time. While an employee at KPMG, she was involved with the audits of client Century Insurance. She worked on a marketing committee with someone who was a member of the Century board and who shared the company's desire to have a female board member. Her familiarity with Century made her a great choice.
Cresce's work with boards has been from an internal point of view. She was an attorney at the Chicago Mercantile Exchange and assisted with its process of going from a mutual organization to a public company. Sarbanes-Oxley compliance work was going on at the same time, and the Mercantile Exchange was looking for people with different types of expertise, thus arose an internal board placement. This experience at the Merc has proven valuable in her current role on the board at the Chicago Climate Exchange, as Sarbanes-Oxley and corporate governance requirements are filtering down to companies that are not publicly traded.
Unlike Reagan and Cresce, Christopher's board experience has been entirely in the not-for-profit sector. Her business, Pampered Chef, has had a long-running partnership with America's Second Harvest. Partway through this relationship, Second Harvest requested she become one of its board members, an invitation she accepted.
When asked what women can do today to help prepare them for a board position tomorrow, all three panelists suggest networking as a vital ingredient. "Networking is the key to how I landed on almost every board I've been on," notes Christopher. "Through networking, you can plant the seed with company contacts that you might be the right person to be on their board." And as gender diversity becomes a priority for companies, being a woman can be a plus today. It was only as recently as 2005 that Christopher became the first female Chair of the Board of the Better Business Bureau of Chicago and Northern Illinois. However, being connected is only one piece; you must also be sure to have the right credentials.
Reagan believes that getting experience and becoming a recognized leader in your particular field is an important step in gaining the opportunity to serve on a board. Says Reagan, "Companies will identify candidates who can contribute to them and those who are a leader in their field, even if that's a niche." Notoriety, name recognition and established relationships also help, especially if these are in-person, not only those developed by phone and email. A good resource, according to Reagan, is the National Association of Corporate Directors, whose Chicago chapter president is Michele Hooper. It's a not-for-profit organization that serves the corporate governance needs of corporate boards and individual board members and can help garner more information about involvement on boards.
Cresce stresses getting your name out there if you want to serve on a board. She suggests highlighting on your resume what exactly you are trying to sell to be on a board and then tailoring it to what the company is looking for and what your skill set is, be it accounting, finance, operations, knowledge of a particular business, notoriety, etc. "Demonstrate to companies how you can open doors for them," says Cresce. "There are also certain headhunters with practices in corporate governance and being on boards, so look for them on the web." Cresce says a group called Catalyst can be a good resource for women who seek corporate board membership (www.catalyst.org).
Christopher notes that several boards she is on have certain profiles and want people to provide a particular role, so one then carries the responsibility to represent that sector. She encourages women to think about the specific gift and skills they bring and start working toward that. If you're interested in serving on the board of a not-for-profit agency, do some volunteer work with the organization. If aiming for a for-profit company, you can work on developing skills you must have to serve. Making yourself a known commodity and building expertise in a particular area are essential for being placed on a board.
Reagan adds that it can be good to start out small and learn the whole board process before moving on to a larger entity. "If you want to be involved, go ahead and ask the company," she says. "The worst they can do is say no. We [women] don't do enough asking."
All of the panelists caution that being on a board takes up a lot of time. "It takes more time than you can ever imagine," states Reagan. One must understand the responsibility of being on a board and all that goes with it, not only the actual board meetings but also plenty of reading, setting up the agenda, working with inside staff to assign duties, attending committee meetings, reporting back to the board, and chairing committees after you gain some tenure. In addition to a huge time commitment, there is an important legal commitment as well, so you must be really prepared to serve. However, as Cresce observes, it does carry over to benefit your regular day job, which makes it worth the effort.
An audience member at the session asked the panelists about the differences between paying and non-paying board positions. It was noted that not-for-profit agencies do not pay their board members, and while most for-profit companies try to offer some sort of compensation, not all are able to do so, especially when they are just starting out. Cresce's current employer, the Chicago Climate Exchange, did not initially pay its board members but now is able to provide a small quarterly stipend. The Chicago Mercantile Exchange, on the other hand, pays its board members per meeting attended.
Reagan recently joined the board of L3 (Leadership, Legacy and Life), which currently offers no pay - the only such board for her. Even without pay, it attracts known directors because they believe in the value of the organization. Other boards pay for each committee you serve on and offer a higher amount to chairs of these committees.
Cresce notes that the annual reports for public companies usually reveal the typical stipends paid to directors as well as committee chairs. These reports also print the names of any board members who did not attend at least 75 percent of board meetings that year, which is a great reminder of your commitment.
Since the panelists have served on boards for several years, the audience was curious to know what differences they see between now and when they first started. Reagan says one big difference is liability. Unlike the past, board members now have liability insurance to cover their service. In fact, Reagan says she wouldn't think of being on a board without it. She also cautions that there are gaps in this type of coverage, so be aware when purchasing. A second big difference between now and the past is Sarbanes-Oxley, which has increased by 9 or 10 times the amount of documentation board members must now look at. Sarbanes-Oxley also requires that you not only read these items, but you also must really understand them.
Cresce and Christopher acknowledge the impact of Sarbanes-Oxley, even for not-for-profit boards. Sarbanes-Oxley has prompted much more scrutiny and has raised concerns about conflicts of interest, leading board members to ask more questions and recuse themselves from votes if necessary. Both women cite the push for gender and ethnic diversity as another difference in board work over the last several years. Finally, the growth in technology has had a great impact and made it easier to accomplish board duties. Christopher notes that she need not attend as many in-person meetings prior to a regular board meeting, as she can do pre-work ahead of time away from the group or communicate with others through technology. Cresce likes the ease of being able to download specific documents ahead of time instead of receiving a huge packet of materials in the mail.
When asked if they see differences in viewpoints between men and women serving on a board, the panelists agree that the main differences are not due to gender but rather are based on different personalities, strengths and weaknesses, as well as individual expertise or skill level. While Christopher feels the most important basis is expertise and information, she does notice differences between men and women in presentation style and how they talk through issues, which she sees as a good thing. She thinks women are quite patient with men but that men are not as patient with women, however, they are working to reconcile this difference.
To close the session, the panelists were asked to share a main lesson they have taken away from their service on boards. Christopher feels that like anything else you do, "If you are going to participate in a board, jump in with both feet and be prepared to really commit yourself to whatever is asked and even more than what is asked." This gives you a very good feeling about what you are able to contribute, which you can expand on to be better skilled in your everyday life at work and in private.
Cresce has enjoyed seeing companies grow and business being accomplished, and feels good to have been a part of these ventures to resolve problems and move forward. This has carried over into a sense of duty to talk to others high up in the ranks as well as to support and mentor younger, less-experienced women coming up.
Reagan says her work on boards has helped her gain insight into how other companies are run and to better assess practices at her own firm, in order to constantly tailor how it is run. She also says, "In the end you get more than you give."