Pathways to leadership: Board independence ... - Semantic Scholar

Original Article

Pathways to leadership: Board independence, diversity and the emerging pipeline in the United States for women directors Received (in revised form): 17th December 2010

Hugh M. J. Colaco is an Assistant Professor of Finance at Merrimack College in North Andover, Massachusetts. His current research interests include initial public offerings and corporate governance.

Paul Myers is an executive coach and organizational consultant based in Boulder, CO. He specializes in developing customized course material, including case studies, for leadership and other professional development programs.

Mindell Reiss Nitkin is an Assistant Professor of Management at Simmons College in Boston, MA. Her current research interests are corporate governance and earnings quality.

ABSTRACT In the wake of this decade’s corporate scandals, crimes and excesses, improving the effectiveness of corporate governance in the United States has become a priority. An important influence on a board’s effectiveness at monitoring is its members’ degree of independence from senior management. While the current definition of independence revolves around the absence of familial and economic connections between a firm and its directors, research suggests that this standard may be inadequate in ensuring independent oversight. Rather, diversity along racial, gender and other dimensions has been proposed as a potentially more effective standard for board independence. This is especially welcome news for women, who currently comprise 51 per cent of the US managerial workforce but only 14.8 per cent of the directors on boards of large, publicly traded US corporations. Some explain the current dearth of women board members by claiming that there are no qualified women available for board service and/or that women are not interested in board service. However, there is more anecdotal rather than empirical evidence on the issue. Surveying women at a women’s leadership conference in Boston, this research investigates the extent to which women are currently involved in some type of board service and the extent to which women aspire to future board service. We find that women are currently more active in governance activities than prior research on corporate boards suggests and that they aspire to play a continued and expanded role in governance activities.

International Journal of Disclosure and Governance (2011) 8, 122–147. doi:10.1057/jdg.2011.1 Keywords: corporate governance; women; board of directors; for-profit organizations; non-profit organizations

Correspondence: Mindell Reiss Nitkin Simmons College, School of Management, 300 The Fenway, Boston, Massachusetts 02115, USA

© 2011 Macmillan Publishers Ltd. 1741-3591 International Journal of Disclosure and Governance

www.palgrave-journals.com/jdg/

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Pathways to leadership

INTRODUCTION AND MOTIVATION Corporate scandals involving fraud highlight a systemic problem that has less to do with financial reporting standards than with oversight of the reporting process itself.1 These crimes and their effects on investors continue to lead to calls for improvements in corporate governance from regulators, legislators and investment managers as well as investors themselves. In 1999, the New York Stock Exchange (NYSE) formed a Blue Ribbon Committee to study audit effectiveness and make recommendations for improvements. Additionally, the United States Congress passed the SarbanesOxley Act in 2002. Several institutional investors have developed tools to screen companies on their oversight quality 2 as have a number of public interest groups that support governance reform.3 Perceived deficiencies in governance quality direct attention to the board of directors’ responsibility for fiduciary oversight. Through monitoring management’s execution of a firm’s strategic plans and reporting mechanisms, the board serves as a check on managerial action and holds executives accountable for their performance. An important influence on a board’s effectiveness at monitoring is its members’ degree of independence from senior management. Beecher-Monas (2007, p. 384) points out that independent board members ‘improve monitoring because, in theory at least, they will be less willing to rubber stamp management policies and more willing to consider alternative courses of action’. For this reason, the degree of board member independence is often used in research as the single most prominent measure of firm-specific governance quality. Typically, state and federal laws in the United States define independence as the absence of a significant financial interest or familial tie between a board member and the company or between a board member and the firm’s senior executives.4 Yet, a well-developed stream of social network research on the origins and effects of interlocking directorates,

where individual directors sit on each other’s boards, and on back door ties between directors, where individual directors serve on two or more boards which have overlapping sets of directors, suggests that such a purely economic definition of independence may not be adequate to create boards that are truly independent of management (see Mizruchi, 1996; Davis, 2005; Larcker et al, 2005 for reviews). Social relationships with senior executives and other directors can be antithetical to independence and thus impede the ability of directors to provide effective oversight. Rodrigues (2008) suggests that to promote independent oversight, companies should look beyond the ‘narrow’ economic view of independence in choosing board members. He points out that an important precursor to independence of thought is diversity and proposes that increasing the degree of heterogeneity among board members would improve the quality of board oversight. This idea is supported by Dallas (2002) who finds that people with different backgrounds bring alternative perspectives and thus may be more likely to voice dissenting opinions. One way of achieving more heterogeneous and independent boards is to seek out more women for board positions. Yet, despite the fact that the proportion of women in leadership roles is increasing, women still lag behind men significantly in board appointments. Yap et al (2004), in a survey published by Catalyst, report that only 13 per cent of board members on Fortune 1000 firms are women. Erhardt et al (2003) and Carter et al (2003) present similar results. Some explain the current dearth of women board members by claiming that there are no qualified women available for board service and/or that women are not interested in board service (van der Walt and Ingley, 2003; Adams and Flynn, 2005; Sheridan and Milgate, 2005). If this were true, proposals to increase gender diversity on boards as a way to create more independent oversight would be unrealistic. However, there is more anecdotal rather than empirical evidence on the issue. This research therefore asks, ‘Is there a pipeline of


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experienced and qualified women who aspire to board service?’ The existence of such a group of potential board members would countervail the claims suggested above and highlight an available and untapped resource. The availability of experienced and qualified women would suggest that adding women to boards could be a viable option for addressing concerns about the need for greater board independence and improved monitoring. Research in the area of governance and women’s participation in governance generally starts with a sample of large publicly traded firms and investigates the proportion of women directors. On the other hand, believing that the wealth of women’s leadership service is underrepresented in these studies (see Yap et al, 2004; Erhardt et al, 2003; Carter et al, 2003), we begin in this exploratory research, with a group of women and catalog their participation in governance activity. In addition to chronicling their participation, we compare characteristics related to qualification and level of experience of those women who currently serve on boards to those of women who do not serve on boards to better understand the type of women involved in board service. We also attempt to understand the factors that influence women to sit on the various types of boards as well their aspirations for future leadership service. This bottom-up approach serves a number of purposes. First, we are able to catalog the range of governance activities in which women participate as well as identify common demographic characteristics associated with women who either currently serve on boards or who aspire to serve on boards. This information provides valuable insights to firms which seek to make their boards more diverse. By helping identify qualified, motivated women, this research could contribute to a firm⬘s ability to focus its recruitment efforts. Second, by focusing on women who aspire to formal board service, we examine the steps women are currently taking or believe they need to take to acquire a formal board position. Understanding the steps women are either taking or believe

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they need to take may provide a starting point for organizations which seek to develop mentoring and training programs to better prepare women for board roles. To examine women’s participation in board service as well as their aspirations for future board service, we surveyed women managers and executives who attended a women’s leadership conference. Our findings show that women are more active in governance activities than the research on women’s participation on corporate boards suggests. We find that twothirds of the women surveyed currently serve on some type of board: either a formal board to which they had been elected or an informal board to which they were asked to participate or they volunteered. Of those currently serving on formal boards, 65 per cent aspire to continued or expanded board service, while 58 per cent of those not currently serving on formal boards have the same aspiration. Women who are not currently on formal boards but aspire to be on formal boards are significantly younger; more educated, and have reached higher career positions than non-aspirants. We also find that women consider developing a network to be the most important step to obtaining a seat on a formal board. Further, lacking network connections is significantly more important for those aspiring to be on boards of for-profit companies than for those aspiring to be on boards of nonprofit organizations where membership may be more tied to philanthropy. The rest of the article is organized as follows. In the next section, we review the literature on gender diversity on boards and its impact on governance quality. In the subsequent section, we present our research questions, followed by a description of the survey methodology. The later section presents the survey results and the penultimate section discusses the limitations of the study. The final section suggests areas of future research and concludes.

LITERATURE REVIEW There is a growing literature on the relationship between board independence and overall


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monitoring quality. The research generally finds that board independence is associated with better fiduciary oversight (see Cohen et al, 2004 and Larcker et al, 2007 for comprehensive reviews of the literature). In research directly linked to the quality of financial reporting, Beasley (1996), Klein (2002), and AshbaughSkaife et al (2004) find that greater board independence reduces the likelihood of financial statement fraud and earnings management.5 Some of this early research led to the Sarbanes-Oxley requirement that audit committees be comprised of independent directors and be held responsible for overseeing effective accounting controls systems. However, Ramirez (2003) criticizes Sarbanes-Oxley because it did not change the purely economic criteria by which independence is determined. For instance, NYSE rules prohibit ‘material relationships’ such as prior employment and familial connections.6 Such ties can represent actual or potential conflicts of interest and compromise the board member’s ability to carry out her fiduciary responsibility. Ramirez (2003) argues that, regardless of the ‘material relationships’ stipulated above, the degree of homogeneity of race, gender and ethnicity among board members precludes true independence from management.7 Weisbach (1988) and Westphal and Zajac (1995) provide evidence for this view in research that shows that homogeneous boards are more likely than heterogeneous ones to endorse management actions and decisions. Others also support the idea that the independence ‘in appearance’ that accrues from having board members who are not employed by the company or related to senior management does not necessarily result in independence ‘in substance’. Vafeas (2003) points out that director independence alone may be an overly simplistic means of distinguishing director monitoring ability and suggests that board composition diversity complements the economic definition of independence typically used. Larcker et al (2005) suggest that informal social ties between management and directors,

which don’t violate the economic definition of independence, explain a significant portion of pro-management decisions by the board. Davis et al (2003) and Conyon and Muldoon (2006) show that connections created through education, employment, residence and social activities both create and reinforce the elite networks that can lead to career advancement and, ultimately, an invitation to join a board of directors. In addition to improvements in monitoring, board diversity has been associated with firm value and profitability. Fields and Keys (2003) summarize the empirical research linking diversity to corporate performance. They find that cultural diversity results in better performance. Carter et al (2003) and Erhardt et al (2003) find a significant positive relationship between the percentage and presence of women on corporate boards and firm value as measured by Tobin’s Q. Yap et al (2004), Bonn (2004), and Shrader et al (1997) find a positive association between the per cent of women on the board of directors and firm performance. In work related specifically to financial reporting, Parsons and Krishnan (2008) find that earnings quality is positively associated with gender diversity in management. Several explanations are commonly offered for the link between gender and firm performance. Kesner (1988) finds that because women are more likely to be outsiders both in appearance and in substance, their presence in the boardroom can have a powerful and positive effect on the decision-making process. Hillman et al (2007) note several benefits of women on boards including advice that reflects alternative viewpoints, valuable insight into consumer behavior, and access to different organizational networks. Sonnenfeld (2004) suggests that a board comprised of directors from varied back grounds may encourage more dissent and result in more robust decision making. Following this reasoning, a heterogeneous board, which includes a mix of men and women, a mix of ages, a mix of tenure, and a mix of experience, may provide independence ‘in substance’. Indeed,


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numerous studies find that racial, ethnic, and other types of diversity on the board of directors is an important factor in effective monitoring and oversight.8 From an organizational behavior perspective, Janis (1982) finds that groups composed of members with similar backgrounds are more likely to be pressured into conformity and consensus thus reinforcing managerial power. As opposed to this, he finds that heterogeneity enhances decision making by increasing access to multiple points of view and reducing the propensity for ‘group-think’. More recently, Kramer et al (2006) find that female board participation leads to more collaborative decision making that includes better listening, social support and mutual gains problem-solving. By virtue of their different experiences and leadership styles, then, women potentially enhance board independence. Given the case for diversity in general and gender diversity in particular, numerous authors have examined the status of women on corporate boards. The results have been disappointing. Yap et al (2004) report that only 13 per cent of board members on Fortune 1000 firms are women. Other studies present similar results (see Carter et al, 2003 and Erhardt et al, 2003). Using a sample of firms from the Fortune 500 for the period 1987–1996, Daily et al (1999) find that the per cent of firms with women’s representation increased from 42.6 per cent in 1987 to 81.2 per cent in 1996. Despite the increase in the number of firms that have women directors, the authors found that most boards have only a token women director and that a small group of token women each sit on many boards. Data, from the Investor Responsibility Resource Center (IRRC) database, show that, from 1997 through 2005, only 12 800 of the 137 941 or 9.28 per cent of the board seats available for firms listed on the Standard and Poor’s 500, Midcap and Small Cap Indices were occupied by women. These seats were filled by 1958 unique women resulting in an average of 6.5 appointments per woman director. This average number of appointments

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is a combination of multi-year appointments to the same board as well as appointments to multiple boards in the same year.

RESEARCH QUESTIONS Given the strong case for including women in corporate governance in regards to business development, improved profitability and better independent oversight, it seems surprising that relatively few corporate board director positions are filled by women and that relatively few ‘unique’ women serve on boards. The anecdotal claim regarding the dearth of women directors often revolves around the lack of qualified women interested in board service. The mismatch between the perceived benefit and the low participation led to the current research. Drawing data from a group of women managers and executives, we investigate the following questions: 1. To what extent are professional women currently involved in formal or informal governance activities? 2. Do women not currently involved with formal governance activity aspire to participate in formal governance activities? 3. What barriers do these women face in obtaining formal board directorships? 4. What steps are these women taking to overcome the barriers to obtaining formal board directorships?

SURVEY METHODOLOGY In May 2007, we administered a survey at the annual leadership conference hosted by the Simmons School of Management in Boston (Massachusetts, USA). Over 2500 women typically attend this annual conference. A total of 536 women attendees completed the survey.9 The survey was developed and administered using Zoomerang™, a webbased survey product.10 The survey had two primary objectives: (1) to gather information about women’s participation on formal boards to which members must be elected and on informal boards to which members


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generally are appointed or volunteer and (2) to gather information about aspirations for future board service as well as barriers to service and action steps. The survey questions relevant to this study are shown in the Appendix.

SURVEY RESULTS To what extent are professional women currently involved in governance activities? Our first research question focuses on the extent to which professional women are currently involved in board activity. Current board involvement demonstrates interest in board participation by women and provides evidence from the organizations they serve that there is a pool of women who have the required skills to be valuable contributors. We examine service on both formal and informal boards to fully capture the depth and breadth of governance activities in which women participate. Formal boards may be in the for-profit, governmental or non-profit sector. These types of formal boards include Boards of Directors, Boards of Trustees, Boards of Alderman and Boards of Selectman. Formal boards have specific roles and require their members to have sufficient understanding of the strategic and operational issues of an organization so that they can exercise leadership and guide strategic decisions. Informal boards may also be in the for-profit, governmental or non-profit sector. These types of boards include advisory boards, business councils and committees. Like formal boards, informal boards have specific charges and require their members to have appropriate managerial and leadership skills so that they can effectively fulfill their designated leadership role. The key difference between participation on formal and informal boards is that individuals must be nominated, voted on and elected to director or trustee positions on formal boards. Unlike formal boards, participation on informal boards is generally through invitation from the board convener or through self-selection.

As shown in Panel A of Table 1, the majority of survey respondents report participating on either formal or informal boards. In all, 158 out of a total of 536 respondents (29 per cent) have experience serving on formal boards, while 167 women (31 per cent) have experience on informal boards. Panel B reports the distribution of formal board seats. Seventy-seven per cent of the women who hold formal board seats serve on not-for-profit boards. An additional 9 per cent of women serve on boards of private foundations with 10 per cent serving on governmental boards. Approximately 13 per cent of respondents serve on boards of for-profit firms.11 This is almost equally split between publicly and privately held firms. This percentage is in line with the findings of the previously cited Catalyst study of Fortune 500 companies (Yap et al, 2004). Many women serve on more than one board with the average being two seats on either a formal or informal board. These results further coincide with findings of The Urban Institute’s study (2007) which reports that women are more engaged in board activity for non-profit organizations than on boards of for-profit firms. The Urban Institute found that 94 per cent of all non-profit boards include women as opposed to 86 per cent of profit boards. Additionally, they found that, on average, 46 per cent of non-profit board seats are held by women compared to 15 per cent of for-profit board seats. This result may contribute to the perception that there is a lack of qualified women since the seats in which women serve are less visible than positions on boards of larger and more prominent organizations. Interestingly, The Urban Institute suggests that even though Sarbanes-Oxley does not formally extend to non-profits, ‘its provisions have altered expectations and standards about nonprofit governance, and the climate in which non-profits operate’ (p. 3). This is good news for women as the increased expectations and rigor imposed on non-profit boards could make them into an increasingly fruitful training ground for women interested in developing the skills and expertise needed on boards


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127

128

# of women

n

77%

122


33 28 17 47 61 39

%

—

9%

14

6 4 3 1

# of women

30 9 13 48 68 33

# serve > 1 time

Formal board

246

56 62 36 92

# of seats

58 20 48 64 70 53

% serve > 1 time

—

27

6 8 9 4

# of seats

Private foundation

652

328 324 0

# of seats

—

26

10 6 6 4

# of seats

43 33 34 36 37 38

n

26 20 20 22 22 23

%

Informal board

10%

16

10 3 2 1

# of women

Government

7%

11

8 1 1 1

# of women

—

17

8 2 3 4

# of seats

Publicly held for-profit

100

50 50 0

% of total

6%

9

7 1 1 0

# of women

—

12

7 2 3 0

# of seats

Privately held for-profit

Both formal and informal boards may be in the for-profit, governmental or non-profit sector. The key difference between formal and informal boards is that individuals must be elected to director or trustee positions on formal boards. Unlike formal boards, participation on informal boards is generally through invitation from the board convener or through self-selection. In Panel B, service distribution is the total number of women in each category divided by the total number of women serving on formal boards (n=158). The total number of women serving on various types of formal boards (n=172) exceeds the total number of women serving on formal boards (n=158) as some women serve on more than one type of formal board. Similarly, in Panel C, the total number of roles fulfilled by women in Panel C (n=358 for formal boards and n=221 for informal boards) exceeds the number of unique women who serve on and formal (n=158) and informal (n=167) boards as some women fulfill more than one leadership role. Percentages are calculated by dividing the number of positions held the total. Also, in Panel C, the terms Committee Chair/Member apply to formal boards while Sub-Committee Chair/Member apply to informal boards.

Panel C: Number of leadership roles held by board type and type of role Chair 52 Secretary 45 Treasurer 27 75 Committee/Sub-committee chair Committee/Sub-committee member 97 Ad hoc committee member 62

Role

Service

100

29 31 39

% of total

Non-profit organization

536

158 167 211

# of women

Panel B: Number of women board members and seats by formal board type 1 56 2 31 3 12 >4 23

# of times

Total

Panel A: Distribution of board participation Formal board Informal board No board experience

Table 1: Participation on board by women Colaco et al

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of for-profit companies. Further, The Urban Institute found that having corporate members on non-profit boards is an important factor in the effective governance of the non-profit. The presence of corporate directors on non-profit boards may help those directors identify and recruit potential women directors for corporate boards. Not only are women more active on formal and informal governance bodies than would be supposed from studies like the Catalyst study, but they also frequently take leadership roles. Panel C of Table 1 provides results related to leadership roles on boards. One-third of respondents (33 per cent) who serve on formal boards hold or have held the position of chairperson, while about one-quarter (26 per cent) of informal board members reported having the same experience. Twenty-eight per cent (20 per cent) of respondents who serve on formal (informal ) boards reported serving as secretary, while 47 per cent (22 per cent) have served as a committee chair. The role of treasurer is the office least likely to have been held with only 17 per cent of members on formal boards and 20 per cent of members on informal boards holding this role. Participation in leadership roles may be somewhat understated as many of the respondents reported serving in the various roles more than once. For example, 58 per cent of the women who have served as chairperson and 48 per cent of the women who have served as treasurer on a formal board have fulfilled those roles more than once.

To what extent do women aspire to serve on formal boards? Our second research question focuses on whether women aspire to participate in governance activity in the future. Do women currently active in formal governance aspire to expand their participation in formal governance activities and do women not currently active in formal governance aspire to participate in formal governance activities? Table 2 shows the relationship between type of current board service and aspirations. Based on Panel A, 328

(or 61 per cent) of respondents aspire to formal board service. Seventy-three per cent (115/158) of women with formal board experience aspire to future formal board service, while 61 per cent of women with informal board experience and 53 per cent of women with no formal or informal experience expressed an interest in serving on a formal board. The Pearson chi-square test shows that aspirations to formal board service are influenced by experience type (Chi2 = 15.492 Pr = 0.00), so that those with experience on formal boards are slightly more interested in continued or expanded service than those without that experience. Nonetheless, there is significant interest among those women who have had no experience on formal boards in the past. Women who aspire to formal board service were then asked if they aspire to serve on non-profit or for-profit boards. The results are shown in Panel B. In all, 170 out of 322 (53 per cent) respondents aspire to serve on boards of non-profit organizations, while the remaining 152 (47 per cent) aspire to serve on boards of for-profit organizations.12 The Pearson chi-square test shows that prior formal board experience does not impact aspirations to serve on non-profit or for-profit boards (Chi2 = 2.539, Pr = 0.281).13 In the rest of the article, we focus on the 378 women who have either served only on informal boards or who have never served on any type of board. These women were asked about their aspirations for future formal board service, where formal boards include Boards of Directors, Trustees, Alderman and/or Selectman.14 The data are partitioned by whether the respondent aspires or does not aspire to formal board service. The sample is split with 213 out of 378 (56 per cent) interested in formal board service and the remaining 165 (44 per cent) not interested. Identifying characteristics and perspectives shared by these women may help identify pipelines of potential future women board members as well as systems that will help convert aspirations to reality. Table 3 provides selected descriptive statistics about this part of the sample.15 Panel A


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Table 2: Aspirations Experience type

Aspire

Don’t aspire

n

%

n

Panel A: Aspirations for future formal board service by type of current experience Formal board 115 73 43 Informal board 102 61 65 No board experience 111 53 100 Total

328

61

208

Total

%

n

%

27 39 47

158 167 211

29 31 39

39

536

100

2

Pearson chi (2)=15.4920; Pr=0.000 Non-profit N

For-profit %

n

Total %

n

Panel B: Aspirations to non-profit and for-profit formal board service by type of current experience Formal board 64 57 48 43 112 Informal board 55 32 46 46 101 No board experience 51 30 58 53 109 Total

170

100

152

100

322

% 35 31 34 100

Pearson chi2(2)=2.5390; Pr=0.281 Respondents were asked to report on their interest in serving on five types of formal boards: boards of non-profit organizations, private foundation, government, publicly held for-profit firm and privately heldfor-profit firm. In Panel B, non-profit organizations, private foundation and government were grouped into a non-profit category. Publicly held for-profit firms and privately held-for-profit firms were grouped into a for-profit category. Percentages in both Panels A and B exhibit the distribution of aspiration and type of interest by experience type. The Chi2 test result in Panel A compares the distribution of experience type for each aspiration category (aspire/don’t aspire) to the distribution of the entire sample (n=536). The Chi2 test result in Panel B compares the distribution of experience type partitioned by the organization type (non-profit/for-profit) to the distribution of the entire sample of aspirants (n=322).

shows that 76 per cent of the women in the sample who have never served on a formal board are White Caucasians, 9 per cent are African Americans and 9 per cent are Asian Americans. Panel B shows the marital status of the respondents. Sixty-seven per cent of women surveyed are married or in a committed relationship. In Panel C, we see that 91 per cent of the women are employed full-time. Panel D provides a distribution of the sample by the industry in which the respondents are employed. Twenty-one per cent of all respondents work in financial services,

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while 13 per cent work in the health care. This is not surprising given that the conference was held in Boston, where these industries have a large presence.16 Within the partitioned data, the distribution of the sample in regards to race, marital and employment status, and industry of employment is similar to the overall distribution. In other words, the proportion of women who aspire to be on formal boards is very close to the overall proportions with a few notable exceptions. The proportion of single (married)


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Table 3: Descriptive statistics of aspirants/non-aspirants to formal board service Aspire

Don’t aspire

Total

Total freq (%)

Aspire freq (%)

Panel A: Number of aspirants/non-aspirants based on race and ethnicity Race and ethnicity African American 17 Afro-Caribbean 1 Asian American 19 Caucasian/White 149 Hispanic/Latino 10 Puerto Rican 0

15 2 11 119 7 2

32 3 30 268 17 2

9 1 9 76 5 1

9 1 10 76 5 0

Total

196

156

352

100

100

Panel B: Number of aspirants/non-aspirants based on family status Family status Married or committed relationship 132 Single, Divorced, Separated, Widowed 76

112 46

244 122

67 33

63 37

Total

158

366

33

37

Panel C: Number of aspirants/non-aspirants based on employment status Employment status Employed full-time 186 154 Employed part-time 12 3 Full-time self-employed 4 3 Part-time self-employed 2 0 Not employed by personal choice 6 2

340 15 7 2 8

91 4 2 1 2

89 6 2 1 3

Total

372

100

100

13 4 43 25 16 20 76 9 48 19

4 1 12 7 4 6 21 3 13 5

4 2 8 6 6 5 22 3 14 6

Pearson chi2(5)=3.9853; Pr=0.552

208 2

Pearson chi (1)=2.2274; Pr=0.136

210

162

Pearson chi2(4)=6.4688; Pr=0.167 Panel D: Number of aspirants/non-aspirants based on industry currently employed in Industry Advertising/Marketing/Public Relations 8 5 Aerospace/Military 3 1 Computer Hardware or Software 16 27 Computer Services 12 13 Consulting 11 5 Education/Training 9 11 Finance/Banking/Insurance 43 33 Government 6 3 Healthcare/Medical 28 20 High Technology 12 7


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Table 3: Continued

Human Services Information Technology Manufacturing/R&D Media Non-Profit Pharmaceutical Research Retail or Wholesale Trade Transportation Travel/Hospitality Utilities Total

Aspire

Don’t aspire

Total

Total freq (%)

Aspire freq (%)

1 23 3 1 4 11 3 2 1 1 1

1 7 4 0 2 15 2 0 1 1 2

2 30 7 1 6 26 5 2 2 2 3

1 8 2 0 2 7 1 1 1 1 1

1 12 2 1 2 6 2 1 1 1 1

199

160

359

100

100

Pearson chi2(20)=21.4694; Pr=0.370

women who aspire to formal board membership is higher (lower) than the overall proportions (37 per cent versus 33 per cent for single women, 63 per cent versus 67 per cent for married women). Also different is the impact of employment status. The proportion of women working part-time (full-time) who aspire to board service is higher (lower) than the overall proportions (6 per cent versus 4 per cent for part-time employees and 89 per cent versus 91 per cent for full-time employees). In all cases, Chi2 tests show that the demographic distribution of aspirants reflects the overall distribution of each demographic in the entire sample. Table 4 provides additional insight into similarities and differences between women who aspire to formal board service and women who do not have similar aspirations. The two groups differ by age, education level, experience, position and the number of children under 18 still at home. Respondents who aspire to formal board service are significantly younger (median age range = 30–39) than non-aspirants (median age range = 40–49). The P-values for difference in means and medians are highly significant at < 0.001. The median education level of women who aspire to formal board

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service is at least some graduate level study, while that of women who do not aspire to board service is a bachelor’s degree. This difference is statistically significant (P = 0.005). The median work experience for women who aspire to formal board service is lower (11–20 years) than that for non-aspirants (median 21–30 years). This difference is also highly significant based on difference in means and medians (P < 0.001). While this may seem surprising, the result is consistent with the fact that aspirants are younger than non-aspirants, so by default, they would tend to have less work experience. Despite this inverse relationship, a woman⬘s aspirations are associated with the position that she has achieved in her career. Women who aspire to be on a formal board have reached middle level management (based on median), defined as positions of director, middle manager and assistant vice president. On the other hand, the median position for women in the non-aspirant group is only a supervisory level (that is, supervisor, first-line manager). The differences between the two groups in regard to position are again statistically significant. Finally, those who do not aspire to formal board service have more children under


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Table 4: Characteristics of women aspiring/not aspiring formal board service Variable

Total

Aspire

Don’t aspire

P-value

Age

3.61 4.00 (368)

3.34 3.00 (208)

3.96 4.00 (160)

< 0.001 < 0.001

Education

3.83 4.00 (354)

4.00 4.00 (200)

3.61 3.00 (154)

0.004 0.005

Years of work experience

4.06 4.00 (375)

3.77 4.00 (211)

4.44 5.00 (164)

< 0.001 < 0.001

Career position

3.63 4.00 (360)

3.50 3.00 (204)

3.78 4.00 (156)

0.006 0.007

Number of employees

5.06 6.00 (362)

5.05 6.00 (206)

5.06 6.00 (156)

0.918 0.531

Number of promotions

3.18 3.00 (363)

3.16 3.00 (204)

3.21 3.00 (159)

0.550 0.486

2006 Personal Gross Income

4.30 4.00 (361)

4.34 4.00 (208)

4.24 4.00 (153)

0.533 0.421

2006 Household Gross Income

5.19 5.00 (356)

5.24 5.00 (205)

5.12 5.00 (151)

0.497 0.433

Portion of Household Income that you contribute

4.34 4.00 (358)

4.34 4.00 (203)

4.34 4.00 (155)

0.976 0.976

Number of children under 18 living at home

1.73 1.00 (365)

1.65 1.00 (207)

1.83 1.00 (158)

0.082 0.072

378

213

165

Sample size

—

The table shows the mean, median and number of respondents (in parentheses) for the given characteristics based on the scale in the Appendix. The P-values for the t-test of difference in means and Wilcoxon rank sum test of difference in medians are also shown.

the age of 18 than those women who aspire to board service (P = 0.082, based on difference in means). These results suggest a generational and societal shift in aspirations as younger, more educated women move into higher ranked positions.

The two groups, those who aspire to formal board service and those who do not, are similar in the number of promotions, personal income and household income. Women in both groups received between two and four promotions (based on the median), indicating that the women


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surveyed have progressed in their careers. The median 2006 personal gross income of both groups ranges from US$75 000 to $99 999, while the median 2006 household gross income of both groups ranges from $100 000 to $149 999. This result shows that the women surveyed contribute significantly to household income. The similarity in income and promotion may be related to the underlying bias in the sample. The attendance of many of the participants to the conference was paid for by their firms. This sponsorship may have been a reward for work well done, recognition of their leadership potential, or acknowledgement of their current level of responsibility. As a result, the majority of attendees at the conference were women in managerial positions. This bias is not considered a serious issue in regards to the results of the survey as the goal of the survey was, in fact, to collect information about aspirations from a group of women who were likely to have the required skills to be qualified for service on formal boards. In general, these results suggest that there is, in fact, a pool of women who are interested in serving on boards. It should be noted that the women respondents have a variety of levels of experience with board service: some with prior experience on formal boards, some with prior experience on informal boards and

some with no prior board experience. So, while many women expressed an interest, they may not all currently be qualified to serve on a formal board. Given the strong interest against the backdrop of relatively low actual participation, we investigate the barriers women face in reaching the goal of participating in formal governance activity.

What barriers do these women face in obtaining formal board directorships? Our third question focuses on the barriers women face in obtaining formal board directorships. Survey respondents were asked to consider a number of factors that may be barriers or deterrents to board service. Respondents rated these factors on a scale of 1 to 4, with 1 defined as ‘not important’ and 4 defined as ‘very important’. Table 5 displays the results. For the cohort that aspires to be on formal boards, lacking the required connections to obtain board service (mean = 2.98) and time constraints associated with board service (mean = 2.97) are the two most significant barriers. The fact that board service takes away family time is also important (mean = 2.79). The women who do not aspire to formal board service identify the same three barriers, although the ranking and the relative

Table 5: Factors that influence aspirations/non-aspirations to formal board service Variable

Lack the required connections Time constraints Takes time away from family Lack of understanding of board work Activity not valued by employer Lack the required skills Too much responsibility Fear the legal liability Lack of interest in board participation Sample size

Aspire

Don’t aspire

n

Mean

n

Mean

196 207 200 192 197 186 193 186 191

2.98 2.97 2.79 2.32 2.13 2.05 2.04 1.95 1.71

146 155 149 147 144 149 148 147 150

2.70 3.13 3.07 2.41 2.10 2.07 2.30 1.91 2.42

n=213

P-value

0.006 0.091 0.008 0.332 0.774 0.794 0.013 0.727 < 0.001

n=165

The table shows the means which are based on a four-point scale with anchors of 1=not important to 4=very important.

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degree of importance are different. For these women, time constraints is the most important (mean = 3.13), while reducing family time is also a decisive factor (mean = 3.07). In addition to identifying the most important factors, we also consider the differences in the relative importance of the factors for women who aspire and those who do not aspire to formal board service. For those women who want to be on a formal board, having the appropriate network and connections is significantly more important than for women who did not aspire to formal board service (P = 0.006). This identifies an actionable step on many fronts. Women who want to serve on boards realize that networks and connections are essential to obtaining board seats. This realization should lead women to become active in organizations which facilitate networking. Employers who want to foster board service should use this finding to develop formal networking and mentoring opportunities for their employees. And, corporations looking to expand their net for potential board members should consider avenues for building connections with up and coming managers. On the other hand, the largest difference between the two groups is that those women who do not aspire to board service reported that they are generally just not interested in formal board service (P < 0.001). In addition, taking time away from the family (P = 0.008) and the responsibility associated with board service (P = 0.013) were significantly more important for women who do not aspire than for women who do aspire to serve on formal boards.

What steps are women taking to overcome barriers to obtaining formal board directorships? Our final question focuses on the steps that women interested in obtaining board seats are taking to overcome the barriers to obtaining formal board directorships. Burgess and Tharenou (2002) argue that organizations can contribute to the appointment of women directors by

(1) redefining the pool of eligible directors, (2) making the selection process more objective, (3) involving women on board sub-committees and (4) acknowledging the importance of women as a business source. The authors also suggest avenues for women to pursue in attaining board directorships. These include self-promotion, development of networks and acquisition of required skills. We used elements of their list to query the women in the sample on the steps they need to take and are taking in order to position themselves for formal board service in the future. Table 6 presents the results. To focus the responses, participants were asked to report the three steps they think most important. The responses were partitioned as to whether the women aspired to serve on for-profit boards (Panel A, n = 30), not-for-profit boards (Panel B, n = 106) or had no preference (Panel C, n = 74). Eighty-three per cent of the women who aspire to positions on board of for-profit firms, 81 per cent of those who aspire to positions on boards of non-profit organizations and 95 per cent of those who aspire to positions on either type of board identified developing a network as one of the most important steps to achieve a formal board position. Progressing further in their career was cited by 60, 42 and 72 per cent of respondents in each aspirations category respectively, while self-promotion was cited by 47, 61 and 64 per cent of respondents. The least helpful action step identified by each group of respondents respectively, was to make connections with a placement agency with only 7, 12 and 8 per cent of each aspiration group citing this as being useful. This seems to reflect women’s perception that, perhaps, they need to achieve formal board positions alone. It is unfortunate that the respondents did not see this action as an avenue for making connections to organizations or as a way to build a network. Women with aspirations to serve on a board have not only identified next steps, but are actively taking steps to actualize their aspirations. Overall roughly 37 per cent of all the respondents reported that they are working


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Table 6: Steps to achieve formal board positions Steps to acquire formal board position

Steps taken

Ratio of taken to necessary (%)

n

%

n

%

Panel A: For-profit Develop a network Progress further in career Self-promotion Develop skills that would be useful Get involved with organization at a lower level Donate to organization Make connections with placement agency Sample size n=30

25 18 14 12 6 3 2

83 60 47 40 20 10 7

11 7 3 7 1 0 0

37 23 10 23 3 0 0

44 39 21 58 17 0 0

Panel B: Non-Profit Develop a network Progress further in career Self-promotion Develop skills that would be useful Get involved with organization at a lower level Donate to organization Make connections with placement agency Sample size n=106

86 44 65 49 42 22 13

81 42 61 46 40 21 12

39 21 27 20 16 7 1

37 20 25 19 15 7 1

45 48 42 41 38 32 8

Panel C: Either Develop a network Progress further in career Self-promotion Develop skills that would be useful Get involved with organization at a lower level Donate to organization Make connections with placement agency Sample size n=74

70 53 47 44 35 9 6

95 72 64 59 47 12 8

29 30 13 25 9 1 1

39 41 18 34 12 1 1

41 57 28 57 26 11 17

on developing a network with another roughly 27 per cent reporting that they are working on progressing further in their careers to make them more valuable candidates for eventual formal board positions.

ROBUSTNESS OF RESULTS AND LIMITATIONS OF THE CURRENT STUDY As a robustness check, we examine the impact of the various factors influencing aspirations to formal board service using a logit model. The

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Steps necessary

results of these regressions are presented in Table 7. A dummy variable for aspirations is used as the dependent variable in the regressions. The aspirations dummy is set equal to one if the respondent aspires to formal board service and set to zero otherwise. Column 1 in Panel A reports on the impact of personal characteristics on aspirations to formal board service. Women with more education are more likely to aspire, while older women are less likely. These results are consistent with the univariate results in Table 4 and are significant


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Table 7: Multivariate regressions of determinants of aspirations for board service (1) Prob of aspiring Panel A: Logit regression model without experience dummy Characteristics Number of children under 18 living with you Education Work experience Age Barriers Board activity not valued by employer

− 0.188 (0.121) 0.258*** (0.093) − 0.247 (0.175) − 0.484** (0.197) —

Takes time away from family

—

Lack the required skills

—

Lack the required connections

—

Fear the legal liability

—

Constant Observations Pseudo R2 Prob > chi2 Panel B: Logit regression model with experience dummy Characteristics Number of children under 18 living with you Education Work experience Age Barriers Board activity not valued by employer

2.390*** (0.656) 346 0.102 < 0.001

− 0.224* (0.123) 0.265*** (0.0949) − 0.314* (0.178) − 0.496** (0.198) —

Takes time away from family

—

Lack the required skills

—

Lack the required connections

—

(2) Prob of aspiring

— — — —

0.0866 (0.138) − 0.376*** (0.126) − 0.247 (0.166) 0.411*** (0.147) 0.0717 (0.152) 0.346 (0.561) 310 0.049 < 0.001

— — — —

0.122 (0.140) − 0.385*** (0.127) − 0.234 (0.167) 0.452*** (0.150)

(3) Prob of aspiring

− 0.042 (0.146) 0.203* (0.106) − 0.319 (0.195) − 0.466** (0.222) 0.071 (0.155) − 0.267* (0.147) − 0.329* (0.181) 0.515*** (0.163) 0.057 (0.166) 2.253** (0.892) 299 0.146 < 0.001

− 0.110 (0.150) 0.220** (0.110) − 0.387* (0.199) − 0.514** (0.225) 0.143 (0.159) − 0.264* (0.150) − 0.316* (0.185) 0.619*** (0.169)


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Table 7: Continued (1) Prob of aspiring Fear the legal liability Experience dummy Constant Observations Pseudo R2 Prob > chi2

— 0.696*** (0.249) 2.445*** (0.663) 346 0.119 < 0.001

(2) Prob of aspiring 0.0612 (0.154) 0.457* (0.253) − 0.0117 (0.597) 310 0.057 < 0.001

(3) Prob of aspiring 0.0481 (0.169) 0.958*** (0.300) 1.913** (0.908) 299 0.173 < 0.001

Standard errors in parentheses. *Significant at 10 per cent; **significant at 5 per cent; ***significant at 1 per cent.

at least at the 5 per cent significance level. Work experience and the number of children under 18 living at home, both related to aspirations in the univariate setting, are unrelated to aspirations in the multivariate setting. In Column 2, we examine how barriers impact aspirations to formal board service. Time away from family and lacking the required connections are the most significant barriers and are both significant at the 1 per cent level. These results are similar to those obtained in the univariate setting in Table 5. None of the other barriers are significant. We include both characteristics and barriers as explanatory variables in Column 3. All the variables that were found to be significant earlier remain significant, although the level of significance is lower in some cases. Panel B is similar to Panel A with the exception that the latter includes an experience dummy variable which equals one if the participant has experience on an informal board/ committee, and zero otherwise. We intend to capture in a multivariate setting if aspirations are directly related to previous experience. The experience dummy is significant in all three regressions, indicating that women with experience on informal boards are more likely to aspire to formal board service than women with no prior experience. The variables related to characteristics and barriers that were significant

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in the earlier specifications continue to be significant. In conclusion, there is evidence that aspirations to formal board service are influenced by age and education. The fact that board service may eat into family time and lack of the required connections to obtain board service are other factors. Finally, prior experience on informal boards seems to predispose women to aspiring to service on formal boards. While the results of the survey indicate that there is a pipeline of women who are interested and qualified to serve on boards, we next discuss the limitations of the study since they have a direct impact on our inferences. Similar to all research which is based on survey data, there are limitations here due to sample selection bias. The inherent bias in our sample is three fold. First, the survey was only completed by women; therefore, there is no way to test whether the results in regards to aspirations and motivations differ based on gender. Second, the survey was completed by women attending a leadership conference which skews the sample towards professional women rather than a broader pool of women. Third, the location of the leadership conference in Boston may skew the sample towards professional women in certain industries (finance and health care, in particular) to the exclusion of other industries. We do not see these issues as creating serious


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bias in terms of interpreting the results with regard to the research questions that we identified earlier. In fact, this sample is well aligned with the objective of the survey. The goal of the research is to investigate the existence of a pipeline of qualified women who are interested in formal board service. By surveying a group of women, we are in fact focusing on the primary issue of interest. The current study is not concerned with gender differences regarding current service or aspirations for future service. Similarities or differences faced by men and women in attaining positions on formal boards are immaterial in the study’s scope. Rather, the focus is only on women’s service, aspirations, and paths to formal board service. So, while a comparative study would be interesting and informative, it is not the goal of this survey. Focusing the survey on a group of professional women also aligns the survey data with the research question of investigating the existence of a pipeline of qualified women interested in formal board service. By asking professional women about their current service and their aspirations for future service, we are starting with a group of respondents who are likely to have the required leadership, financial and organizational skills that would make them qualified candidates for board service. Our objective is to identify whether these qualified women have service experience on any type of board, either currently or in the past, and whether they have aspirations to serve on formal boards in the future. The focus is on determining if there is evidence to counter the anecdotal claim that the low representation of women on corporate boards is due to a lack of qualified women who are interested in board service. Finally, the industry distribution of the entire sample is tilted towards financial services and health care. This would be problematic in terms of generalizing the results if the women with current service or aspirations for future service were employed only in financial services or health care. But this is not the case. A chi-squared goodness of fit test shows that statistically the distribution of aspiration by industry is similar to the overall industry distribution of

the sample (Chi2 = 21.4694, P = 0.370). Specifically, 21 per cent of the entire sample works in financial services while 22 per cent of those who aspire to future service work in that industry, and 13 per cent of the entire sample works in health care, while 14 per cent of those who aspire to future service are employed in that industry. As a result, the distribution of women who aspire to future service is in line with the overall industry distribution of the sample.

AVENUES FOR FUTURE RESEARCH AND CONCLUSION Although most research on gender and governance starts with large, publicly held companies and chronicles the representation of women, we start with a bottom-up approach and survey a group of women at a leadership conference who would be likely to have some of the prerequisite skills needed to succeed in board positions. There are many avenues to extend this exploratory research. First, more pointed questions need to be asked in order to garner pertinent information about the skill level possessed and the skill level needed by potential board candidates. In this context, it would be informative to interview current board members and placement agencies and also to investigate the role industry plays in defining the required skill set. Additionally, more focused questions need to be addressed about the specific action steps potential board candidates are taking to acquire those skills. For example: (1) are women taking courses that would provide the solid grounding in financial management which is so vital in the post-SOX era?, (2) are women enrolling in courses or seminars in order to gain a understanding of how companies work and to understand the role of the executive versus the role of board?, (3) are women enrolling in director’s school in order to be certified? In the final analysis, having a network of connections will not suffice. Rather, women must also have the required skills to succeed. Motivated by research findings indicating that diversity of board membership can lead to


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more independent oversight and higher quality decision making, we undertook exploratory research by surveying women managers and executives attending a women’s leadership conference. We asked questions about their current board service as well as their aspirations to future formal board service. We find that women are active participants in both formal and informal governance activities and that these women have skills that could be leveraged into positions on boards of larger organizations and that could be transferred from non-profit settings to for-profit settings. Of the women surveyed who have not served on a formal board, we find that women who aspire to be on formal boards are significantly younger, more educated, and have reached a higher career position than non-aspirants. Time-related issues and lacking the required connections act as key barriers for aspirants and non-aspirants alike. Even within this issue, the fact that board time reduces family time is significantly more important for the nonaspirants than the aspirants and seems to be a deciding factor in not pursuing formal board service. Non-aspirants also perceive the level of responsibility inherent in board service to be a deterrent to board service. We also find that women consider developing a network as the single most important step in achieving formal board seats. Many women also reported that they needed to progress further in their career before pursuing formal board membership. A majority of those women who aspire to board positions were active in developing skills and connections that they can leverage in their pursuit of future board appointments. We believe that these survey findings show that there are a significant number of women in executive-level positions who are ready, eager and capable of serving as effective board members. The key is to match the large number of qualified women currently serving on formal and informal boards with for-profit firms and non-profit organizations interested in expanding the quality and diversity of their boards. Further, there are a large number of younger,

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less-senior women who aspire to formal board service at some point in their careers. Almost two-thirds (63 per cent) of these aspirants are between the ages of 30 and 49 and, thus, may look forward to many years of professional growth and advancement. This may indicate a potentially strong pool of women candidates for board positions in the years ahead. As shareholders, regulators and watch-dog groups seek to ensure greater independence on corporate boards, this pipeline of women, and the diversity it represents, may become a vital resource for improving governance quality on formal boards.

ACKNOWLEDGEMENTS We are grateful to our co-researchers, Professors Patricia Deyton and Indra Guertler, who contributed to the development and administration of the survey as well as to support from Hewlett Packard.

NOTES 1 Enron, Global Crossing, Health South, Polaroid, Tyco International, Adelphi Communications and WorldCom are but a few of the list of large publicly held companies that were cited for fraudulently reporting their operating activities. 2 Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF) and California Public Employees’ Retirement System (CalPERS), for example, have called for more transparency about board appointments and board activity because of the concern that board independence may be more apparent than real. 3 For example, Investor Responsibility Research Center (IRRC) and Institutional Shareholder Services (ISS). For more information see http://www.riskmetrics.com. 4 See Sarbanes-Oxley (2002) and the Blue Ribbon Commission Report (BRC) on Audit Committee Effectiveness (1999) for currently accepted definitions of


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5

6

7

8

9

10

11

independence. Also, see Millstein (1999) for an introduction to the BRC report. On the other hand, Bhagat and Black (2002) find that director independence does not appear to be positively related to firm performance. NYSE Listed Company Manual, section 303A.02 Independence Tests; available at http://www.nyse.com. Moreover, Moore et al (2006) find that the personal regard and affinity that develop from frequent and repeated interaction between executives and auditors create both conscious and unconscious biases that distort independent thinking. Indeed, Westphal (1998) finds that CEOs cultivate their personal relationships with directors to create such favorable biases. For example, MacLeod Heminway (2007) finds that diverse work groups have decision-making advantages over homogeneous groups. Weisbach (1988) finds that CEO compensation is related to the degree of homogeneity rather than the diversity of board composition. A total of 540 respondents completed the survey of which four were male. Given that the focus of this study is on women, the male respondents were dropped from survey results bringing the total respondents to 536. Not all respondents answer all questions and some questions allowed for multiple responses. This somewhat affects our results since the number of respondents is not consistent in all the tables. As an incentive, participants received a raffle ticket from Hewlett-Packard, a corporate sponsor of the conference and the provider of the technology for conducting the survey. Thirty computer stations were available for the duration of the conference for completing the survey. The total number of women board members in Panel B (172) is more than the number of women who identified themselves as serving on formal boards (158) as some

12

13

14

15

16

women serve of boards of more than one type. A total of 328 women reported aspiring to formal board service, but six women did not respond to this question, so the total sample size in Panel B is 322. We also examine, for the subsample of women with formal board experience, whether the type of prior experience on formal boards influences their respective aspirations. There appears to be no statistical relation as revealed in the Pearson chi-square test. As just mentioned, respondents who have served or currently serve on formal boards are omitted from this analysis. These women, while perhaps aspiring for continued or expanded board service, have made the leap from aspiration to accomplishment. Here, we are primarily interested in analyzing issues related to board service by those who are not yet on formal boards. These respondents may, however, have served or may currently be serving on informal boards such as committees and advisory boards. While 378 women fall into the category of no formal board experience, survey questions were not mandatory so the number of respondents who answered each individual survey question varies. As a result, the sample size varies in the exhibits.The largest discrepancy is on the question of race and ethnicity (n = 352). Differences in the number of respondents are generally small and not significant enough to impact the results. While the industry distribution of the sample is skewed towards a limited number of industries, the likelihood of aspiring to participate in formal governance activity is, by and large, in line with the distribution (Chi2 = 21.4694 Pr = 0.370). For example, 21 per cent of the respondents work in Finance, Banking or Insurance and 22 per cent of those that aspire to formal governance come from the same three industries. The bias in the data is therefore not considered to have significant impact


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on the general conclusions. Professional women in many industries were included in the sample and their aspirations for service were in line with their representation in the sample. The results would be more suspect if the only respondents interested in formal governance service were those women in the over-represented industries.

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APPENDIX Table A1: Relevant questions from survey 1. Do you currently or have you ever served on a formal board? This includes, but is not limited to Boards of Directors, Trustees, Aldermen, and/or Selectmen. YES NO ;If yes proceed to Q2, if NO, proceed to Q4. 2. On how many boards have you served, past and present for each type of organization listed below? Check one response for each type of organization. Never Once Twice Three Four or more times times 1 2 3 4 5 Non-profit organization Private foundation Government Publicly held for-profit firm Privately held-for-profit firm 3. In addition to our board seat, how many times have you taken on any of the following leadership roles? Check one response for each role. Never Once Twice Three times Four or more times 1 2 3 4 5 Chair Secretary Treasurer Committee chair Committee member Ad hoc committee member 4. Do you currently or have you ever served on an informal board? This includes, but is not limited to Advisory Board, Committees. YES NO 5. On how many committees or advisory boards do you currently participate or have you ever participated? One Two Three Four or more 1 2 3 4 6. Do you aspire to serve on a formal board? YES NO

;If YES, continue. If NO, skip to Q11

7. To what types of formal board activity do you aspire? Check all that apply. Non-profit organization (other than foundations) Private foundation Government organization Publicly held for-profit corporation Privately held for-profit corporation Other, please specify 8. How important do you perceive the following personal barriers to be for you in realizing your aspirations in regards to future board service? Rate each item. Minimally Somewhat Very Not at all 1 2 3 4 Time constraints Board activity not valued by employer Takes time away from family Lack of understanding of board work Too much responsibility

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Table A1: Continued Lack of interest in board participation Lack the required skills Lack the required connections Fear the legal liability I don’t face any personal barriers 9. What are the steps you believe you need to take to secure a formal board position in the future? Check all that apply. Self-promotion Develop a network Develop skills that would be useful Progress further in my career Get involved with the organization at a lower level Donate to the organization Make connections with a placement agency Other, please specify 10. What steps are you currently taking to prepare yourself for a formal board position in the future? check all that apply. Self promotion Develop a network Develop skills that would be useful Progress further in my career Get involved with the organization at a lower level Donate to the organization Make connections with a placement agency Other, please specify 11. The following reasons may explain why people are not interested in formal board service. Rate to what extent the following reasons have affected your lack of interest in serving on a formal board? Not Minimally Somewhat Very at all 1 2 3 4 Time constraints Board activity not valued by employer Takes time away from family Lack of understanding of board work Too much responsibility Lack of interest in board participation Lack the required skills Lack the required connections Fear the legal liability I don’t face any personal barriers 12. How many years of professional work experience have you had? Less than 1 year 1 to 5 years 6 to 10 years 11 to 20 years 21 to 30 years More than 30 years

1 2 3 4 5 6

13. Which best describes your current employment status? Employed full-time Employed part-time Full-time self employed Part-time self employed Not employed by personal choice Not employed due to external factors (ie layoff, merger, etc)


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Table A1: Continued 14. Including yourself, how many people are employed in your entire organization? 1–49 50–99 100–499 500–999 1000–9999 10 000 or more Don’t know Not applicable

1 2 3 4 5 6

15. Which category best describes your 2006 PERSONAL gross income? Under $25 000 $25 000–$49 999 $50 000–$74 999 $75 000–$99 999 $100 000–$149 999 $150 000–$199 999 $200 000–$499 999 $500 000 or more

1 2 3 4 5 6 7 8

16. Which category best describes your 2006 HOUSEHOLD gross income? Under $25 000 $25 000–$49 999 $50 000–$74 999 $75 000–$99 999 $100 000–$149 999 $150 000–$199 999 $200 000–$499 999 $500 000 or more

1 2 3 4 5 6 7 8

17. What is the highest level of education you have obtained? High school diploma or less Some college Bachelor’s degree Some graduate school Master⬘s degree Doctorate or professional degree (PhD, MD, JD, etc)

1 2 3 4 5 6

18. What is the highest position you’ve reached during your career? Top level (ie owner, president, CEO, partner) Second level (ie vice president, COO, Dean) Middle level (ie director, middle manager, assistant VP) Supervisory level (ie supervisor, first-line manager) Individual contributor Other or Not Applicable (please explain)

1 2 3 4

19. Considering both current and previous employers, how many promotions have you received in your career? None 1 One 2 2–4 3 5 or more 4 Not applicable 20. How do you identify your race and ethnicity? (If more than one, please choose ‘Other’ and then specify) African American, Black Afro-Caribbean American Indian/Alaskan Native Asian American

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Table A1: Continued Caucasian/White Hispanic/Latino Mexican American/Chicano Native Hawaiian/Pacific Islander Puerto Rican Other (please specify) 21. Please select the category that best describes your current family status. Married Divorced, separated, or widowed Single Committed relationship Other (please specify) 22. How many children under the age of 18 are currently living with you? None 1 2 3 4 or more

1 2 3 4 5

23. What is your age? Under 21 21 to 29 30 to 39 40 to 49 50 to 59 60 or above

1 2 3 4 5 6


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