ALL TOGETHER
Women would also control voting stock under proposal
New study echoes sentiment behind bid for Weinstein Co.: Diversity is better business,
Maria Contreras-Sweet, who led the U.S. Small Business Administration under former U.S. president Barack Obama, has submitted a bid to acquire the Weinstein Co., the embattled film studio grappling with multiple allegations of sexual harassment or assault against its former cochairperson, Harvey Weinstein.
The bid includes a group of investors with female leaders from private equity, venture capital and Hollywood, according to a source familiar with the deal. It proposes retaining the company’s employees and has the blessing of attorney Gloria Allred, who is representing some of Weinstein’s accusers.
But one aspect of the bid is getting the most attention: Its proposal to install a majority-female board of directors, with Contreras-Sweet as chairperson.
“We have now reached a crossroads where it is imperative that a womanled board acquire control of the company and create content that continues to inspire audiences around the world, especially our young girls and boys,” Contreras-Sweet wrote in her proposal. Women would be “significant investors in the new company and control its voting stock.”
If the bid is successful, it would represent a major overhaul for an allmale board that has seen multiple resignations and has faced questions over what was known about the allegations. A spokesperson for the Weinstein Co. declined to comment on Contreras-Sweet’s bid.
Advisers and researchers on women in leadership say packing the board with women could send a big signal from the new owners about what will change. “The company has to do something to signal that it is changing in a fundamental way,” said Marianne Cooper, a sociologist at the Clayman Institute for Gender Re- search at Stanford University. “It would take something on the order of a complete cleaning of house, and putting more diversity in key powerful roles. Starting with the board is not a bad place to start.”
That’s partly because some researchers argue having more women in leadership roles is a better answer to solving sexual harassment problems than installing more training programs or anti-harassment policies. Research has shown that having male-dominated management teams can lead to the tolerance of a sexualized environment, said Alexandra Kalev, a professor at Tel Aviv University and the co-author of a recent Harvard Business Review article on the topic. “Having more women in management increases the share of women who can work to promote women and create a working environment that allows women to flourish,” she said.
Moreover, Kalev said, having more than just one or two token women on the board is important for female board members’ contributions to be heard and to not be seen as outsiders who represent a woman’s point of view. She said research has shown that companies are actually more likely to adopt a diversity program when they have no women on the board than when 5 per cent of the board is women. Having a single woman makes boards feel they’ve taken some action, and they “feel less of an urge to adopt programs that increase diversity.”
It’s not until they get to 15 or 20 per cent of directors that they start to make a difference, Kalev said. “They’re not seen as representing their gender anymore, but representing the board,” she said. “It mainstreams women in positions of power.”
Frequently cited research from 2006, based on interviews with female directors, also found it seems to take at least three women for them to create “a critical mass where women are no longer seen as outsiders” and can influence decision-making. At many companies, women on boards are still absent or in the distinct minority. Only 21 per cent of directors at companies in the S&P 500 are women, according to research from Catalyst, a research and consulting organization focused on women in leadership. Just 27 companies in the Russell 3000 have reached “gender parity,” with at least half of directors being women, or have majority-female boards, according to data from Equilar.
More boards are giving sexual harassment, discrimination and broader cultural issues more weight, particularly in recent months as a wave of allegations have surfaced, said Brande Stellings, who leads advisory services for Catalyst.
“We now see very squarely that issues of sexual harassment and gender discrimination are investor is- sues, and really are board issues,” she said.
Researchers cautioned, however, that boards need both men and women of different racial and ethnic backgrounds to be diverse, and that putting a majority-female board in place is only a first step.
“It’s a perfectly reasonable place to start and it does signal that massive changing is on the horizon, but you have to move from the board to inside the organization and make sure the board holds the leaders accountable,” Cooper said.
If successful, Contreras-Sweet, who was not available to answer questions, would be executive chairperson, taking on management responsibilities. And her background suggests a leader who would be attuned to diversity issues: She founded ProAmerica Bank, which focused on serving small- and medium-size businesses in the Latino community, and served as a U.S. Senate appointee on the Federal Glass Ceiling Commission in the 1990s.
“Issues of sexual harassment and gender discrimination are investor issues, and really are board issues.” BRANDE STELLINGS CATALYST ORGANIZATION