Women lawyers need to be able to show that they have run a company or have had a similar experience, Cranston adds. Women held only 16.6 percent of the board seats at Fortune 500 companies last year, according to the 2012 Catalyst Census: Fortune 500 Women Board Directors. In both 2011 and 2012, less than one-fifth of the companies had 25 percent or more women directors, while one-tenth had no women serving on their boards. In 2012, women of color held 3.3 percent of all board seats.
Women’s share of board leadership changed only slightly within the past year, the Catalyst census showed. Among women, board chair positions rose from 2.6 percent to 3.3 percent, lead director went from 8.3 percent to 8.4 percent, audit committee chair increased from 14.7 percent to 15.9 percent, compensation committee chair went down from 12.5 percent to 11.3 percent, and nominating/governance chair went down from 19.2 percent to 19.0.
Making the Grade
“You have to be realistic. Getting on a Fortune 500 board is difficult,” according to Roberta D. Liebenberg, a senior partner at Fine, Kaplan and Black R.P.C. in Philadelphia and a former chair of the ABA Commission on Women in the Profession. “You have to assess your skills and then network to find out what the skills are that you need and who the people are that you have to know to get on the board.”
Women need to gain a working knowledge of financial statements, corporate governance issues, and business objectives, according to Mary Ann Jorgenson, who chairs the New York–based DirectWomen, an organization that hosts a two-day event designed to train women lawyers about corporate governance and help them craft résumés that will secure board posts to boost the number of women corporate board members.
Women lawyers’ board résumés need to focus on their business acumen and industry experience, says Jorgenson, a retired partner of Cleveland’s Squire, Sanders & Dempsey. “We get the legalese out of the résumé,” she says, and focus instead on the business problems the women lawyers have solved.
“If you are in a law firm, you need to add some serious management experience,” Cranston says. “There is a stereotype that men take charge and women take care.”
One suggestion: Steer clear of running associate development or recruiting. “Those are ‘take-care’ jobs,” Cranston says. “Focus more on being on the executive committee and running a division—those are the take-charge roles.”
Within corporations, general counsel should ask their chief executive officers for responsibilities that are in line with running a company, Cranston advises.
Women who are interested in board posts can apply to attend the annual DirectWomen Institute. Twenty women lawyers are selected for the institute, which is an outgrowth of an initiative of former ABA President Karen J. Mathis. Started in 2007, DirectWomen is independent of the ABA, but both Catalyst and the ABA Commission on Women in the Profession are sponsors.
Roughly 16 percent of DirectWomen alumni have secured board seats, Jorgenson says. “When you think about that, it is a big number,” she explains, adding that this percentage is in line with the national average of corporate board posts women hold.
Having women on boards can make a significant difference in the board’s direction, according to women board directors and studies on the subject.
“My experience shows that boards are more effective with women—the more women, the more effective [they are],” Cranston says. “When I have had three women in the boardroom, it is much easier to be heard,” she adds, noting that women often are not heard by their male board colleagues.
If three of ten directors are women, “you have a block of women who are very attuned to women’s issues and power struggles, and it just makes a difference,” Cranston observes.
A 2006 study confirmed that three or more women board members will change a board’s dynamics. The authors of the study “Critical Mass on Corporate Boards: Why Three or More Women Enhance Governance,” by the Wellesley Center for Women (www.wcwonline.org/Archived-Projects/women-on-corporate-boards), interviewed 50 women directors, 12 CEOs, and 7 corporate secretaries from Fortune 1000 companies.
“Women bring a collaborative leadership style that benefits boardroom dynamics by increasing the amount of listening, social support, and win-win problem solving,” according to the study’s executive summary. “Although women are often collaborative leaders, they do not shy away from controversial issues.”
In contrast, interviewees quoted in the study reported that a lone woman on a board often is not heard and is excluded from socializing and even from some decision-making discussions. She is made to feel her views represent a woman’s point of view and may be subjected to inappropriate behaviors, all of which suggest that male directors notice her gender more than her individual contributions.
“What I observed in the boardroom was that if a male board member speaks on any topic, he is presumed to be speaking with his director hat,” says Wendy Shiba, a member of the 2007 inaugural class of the DirectWomen Institute who has served on boards ranging from a public board to big nonprofits such as the United Way. Shiba is president of the National Asian Pacific American Bar Association, where she sits on the board of governors. She also is vice-chair of the board of trustees of the Japanese American National Museum in Los Angeles. She has for-profit board experience with Bowater Canada, Inc., which was a publicly traded affiliate of Bowater Incorporated in the United States.
“When you have only a single woman at the table, the men may assume that she is expressing something that they label as the woman’s point of view. And when you get three [women], it changes the mix. You have three different voices and—lo and behold—they can even disagree with each other,” Shiba says.
Women also push for other women to be placed in company leadership roles. “Where sufficient women are in the pipeline [for leadership posts], men may give it lip service, but do not really give it attention,” Cranston says. “But three women can drive it.”
Boards traditionally promote women based on what they have done, while men are promoted based on their potential, says Patricia Diaz Dennis, retired senior vice president and assistant general counsel of AT&T, based in San Antonio, Texas, who has served on several public boards. But with women on the board, men and women are promoted the same way. “You ensure people are put into positions in which they can grow,” Dennis says. “I am not sure we could have done that without women on the board.”
Linda K. Lorimer, vice president of Yale University in New Haven, Connecticut, has served on the boards of McGraw-Hill Companies, Sprint Nextel, Centel, and First Colony Life Insurance Company. She says she doesn’t see the same listening and style differences between male and female board members observed by others. However, she says women directors more regularly follow the progress of diversity within a company with regard to women and minorities. Lorimer herself attends an annual conference of McGraw-Hill’s women’s affinity group—a body that offers mentoring and programs for women.
Legal Expertise Needed
Having a lawyer on a board can benefit a company. “Lawyers are superb strategic and analytical thinkers. Lawyers also can bring substantive expertise to a board in the areas of corporate governance, corporate finance, mergers and acquisitions, global expansion, risk management and compliance, and executive compensation,” Shiba says.
Lawyers can be good barometers of whether legal issues present true problems for a company, Cranston says. And they can explain legal issues to nonlawyers, Dennis adds.
Schneider cautions that the most important thing lawyers need to keep in mind is that while their legal training is useful, they are not on the board to be practicing as an attorney.
To secure a board position, networking is key. “Serendipity plays a big hand in getting on a board,” according to Dennis. In the past, it was who you knew. “It used to be that to fill the board, the CEOs knew each other, played golf together, and served on each other’s boards,” she says, “but that is a thing of the past.”
Today, who you know is still important, but with the “overlay of a conscious effort to find more diverse directors,” Dennis adds. “Changes in what boards must report and why they select board members” have made a difference. “That kind of transparency has created better and stronger boards,” she says.
As Dennis left the Federal Communications Commission, she was selected to sit on her first public board, Telemundo Group. Her background in communications—a heavily regulated industry—coupled with her Hispanic ancestry made her the board’s top choice, she explains. Later, her Telemundo board colleagues recommended her for a Massachusetts Mutual Life Insurance Company board seat.
Once you secure one board seat, others are likely to follow, Jorgenson says.
But finding a board position can be a challenge. “Certain boards are still very much a good old boys network,” Shiba observes. “That is as true for some not-for-profit boards as it is for the corporate boards.”
Shiba found this network to be functioning when she served on the South Carolina Board of Accountancy with males who were long-time board members. “I was not only the sole woman but also a ‘Yankee,’ she says. “I had to work to fit in and prove myself. Fortunately, because I came from a major corporation headquartered in the state, I was presumed to be competent in my day job as a lawyer.”
To get on a board, women need to find a sponsor with the clout and willingness to move the needle for them, Cranston says. Often a CEO will recommend a lawyer for an outside company board post. Candidates also work with headhunters.
Nonprofit boards are open to women lawyers, many board members report. “One myth is that serving on a nonprofit board will prepare you for serving on a public [company] board, but that is not true,” Cranston says.
However, Pauline A. Schneider, a partner and head of the public finance group at Orrick, Herrington & Sutcliffe LLP and a member of the Pepco Holdings, Inc., board, both in Washington, D.C., says her nonprofit board work helped her secure for-profit board posts.
Schneider served on multiple nonprofit boards, including that of a hospital system and one representing the largest U.S. lender of loans to graduate students. She says the positions helped qualify her or helped people see her as qualified to sit on the board of a public company.
Lorimer, too, found that her nonprofit experience was useful in securing board posts. “Others can observe how well you work and play with others,” she says.
Nonprofit board experience also can be fulfilling. “You can speak out on issues that you are committed to and make a difference,” Liebenberg explains. “If you commit the time and you take on leadership roles, you can quickly rise through the ranks,” she adds. “You have to take it seriously.”
Note that many nonprofits require a monetary commitment. “Make sure you want to take that on,” Liebenberg advises.
For-profit board service may not be likely to advance one’s career directly, board members say, but the experiences enhanced their skills.
“It has taught me to think more about the business aspects of the legal decisions,” Dennis says.
Board experience also “is an endless opportunity for continuing education to get to learn an industry [that is] not my own,” Lorimer says. “My board service has made me more effective in my day job at Yale. It has given me insight about how other enterprises and institutions craft their strategy and rapidly execute it.”
Many women lawyers who serve on corporate boards are semi or fully retired from the active practice of law. One reason for this is that federal law requires corporate directors to be independent.
“Your law firm may forbid you from serving on a corporate board because it would not be able to be the corporation’s lawyer,” Liebenberg says.
“Many law firms do not want their lawyers on public company boards because if the directors get sued, then maybe the law firm will get sued,” Jorgenson says. “It is not as clear an advantage as it used to be 30 years ago.” Years ago, she notes, board service “gave the firm a business credential that not every firm would have.”
Schneider was selected for the Pepco board after she handled the company’s legal work. At that time, federal law did not prohibit such ties. In the midst of her board service, Schneider switched law firms. “It has put me in an awkward position,” she says. “It has cost the firm a fair amount of business and it has created some tension between me and some of my partners.”
Before serving on a board, lawyers in law firms need to have a “clear understanding about any future business between the firm and the company, and both have to be comfortable with it,” Schneider advises.
Corporations are more likely to allow board service but may limit their in-house counsel to one board seat because of the time commitment, Jorgenson says.
“The best boards are those that are embraced by the chief executive officer to be partners for the organization’s future,” Lorimer says.
Board work is a major time commitment. Meetings occur at least four times a year and often involve travel, preparation, and conference calls. Preparation is key.
“Once a woman arrives at the table, she has to be very serious about doing her homework and being a high-performing director,” Shiba says. “She may be the only woman at the table, in which case she is a symbol—like it or not. Women in these rarified roles have a special responsibility to make sure they do not only a good job, but an excellent one.”
To Do Before Accepting a Board Post
Before accepting a board post, lawyers should conduct a due diligence review of the company similar to one an investor might undertake, board members say. Other suggestions include
- Read all Securities and Exchange Commission filings and annual reports.
- Network to learn about the chief executive officer (CEO), the chief financial officer (CFO), board members, and the company, focusing on information about their ethics. “You are known by the company you keep,” Patricia Diaz Dennis says. “It is important that you feel comfortable with the people you are with.”
- Speak to board members. “If there are a lot of egocentric table pounders, you probably don’t want that,” Mary Cranston says. “It makes coming to a consensus more difficult.”
- Meet with the CFO, the auditor, the CEO, the general counsel, and board members. Ask the general counsel about pending litigation.
- Conduct Google searches about everyone serving on the board.
- Understand how the company makes money.