Maryland’s boardrooms need more women; new law helps
Maryland corporations and large nonprofits beware: The Executive Alliance will soon be knocking on your door.
The group, which dubs itself a catalyst for women leaders in Maryland, will soon begin a campaign to try to sway companies and large nonprofits to increase gender diversity on its board. The goal: for boards in Maryland to be composed of 30% women by 2023.
Despite its position as one of the more prosperous and highly educated states in the country, Maryland has failed at making sure women are adequately represented in the rooms where important decisions are made. The old boys’ network of power is still alive and well in Maryland.
The Executive Alliance reported in a 2018 census that women held 16.8% of board seats at publicly traded companies. The national average is 22.5%.
To make matters worse, 70 publicly traded companies in Maryland had no women in executive positions, 15 had no women on the board of directors and six had none on their boards or in executive positions. The numbers are even more depressing for African American, Latinx and Asian women, who are pretty near invisible in board rooms.
Companies and large nonprofits will be put on blast under a new law that went into effect in October; it requires disclosure of their board makeup to the Maryland Department of Assessments and Taxation. They have until tax day, April 15, to comply.
The law can’t force the hand of these companies, but we hope a little embarrassment and public shaming will prod them to change their ways. The state comptroller’s office will compile a report of all the information for anyone to see.
This won’t be enough for every company to get on board. And we might even hear the tired excuse of the small talent pool, that there just aren’t enough qualified people. It will take more than a report with numbers to change the ways of some organizations. A cultural shift will have to take place — and women can play a role in making that happen.
As an example, women can look to Valerie Jarrett, the former senior adviser to President Barack Obama and assistant to the president for public engagement and intergovernmental affairs from 2009 to 2017. She talked about her experiences serving on boards as part of her keynote address at a recent Executive Alliance luncheon attended by more than 1,000 women. An attorney, she once worked with helped her make her first jump to the board room.
Her advice:
1. Put yourself in the right circles. “People pick people they know. We have to be that person.”
2. Once you are on board, create the path for others. “There are safety in numbers. We have to open those boards for others. We can’t be afraid to push for it.”
3. Use allies whomight not look like you. “I would go to the old white guys… They had more power.”
4. Advocate for yourself, but in an organic way. Don’t walk up to somebody and say, “Will you put me on a board.”
5. Prove yourself in areas companies care about, such as finance and procurement. Then push for areas you care about, such as diversity.
6. Once on a board don’t be afraid to speak up, and no question is dumb. Ms. Jarrett said that even in the White House women felt their voices were “shrinking.” They formed an informal support group to pull each other up.
Women aren’t the only ones who benefit when they are at the table. Diverse leadership makes for better companies too.
Research has found companies with more women on board reported better financial results on average than others and carried less debt. Companies with women board members tend to outperform others during a recession. Women also bring different perspectives to the room. Doesn’t Maryland want its companies to perform at their best and to be able to attract the best talent with the most innovative ideas?
Maryland companies and nonprofits can do better. The new reporting requirement is a good step in making that happen. We hope companies won’t need the shaming to change the make up of their boards and put recruitment plans in place.
We also hope the initiative emboldens women to see they have a right to a board seat as much as any man. In the words of Ms. Jarrett: “When you put yourself in the path of lightning, sometimes you get great.”