WASHINGTON — Tuesday is “Equal Pay Day.”
It’s not a day of celebration, but more like a finish line for women. In 2018 women had to work, on average, until April 10 in order to earn as much money as men did by the last day of 2017.
Each year, women hope that the distance to our finish line will be shorter and that the gap between what men and women are paid will close a bit more.
Equal Pay Day reminds us of how far we’ve come, how far we have to go and the actions still needed to increase the earning power of our nation’s working women.
When looking at median annual salaries for each group, U.S. women are paid about 80 cents for every dollar paid to men. And the pay gap is even worse for women of color.
For significant change to occur, we believe more women need to assume leadership roles, especially by serving on corporate boards.
There’s proof that having more women in board positions yields benefits for an organization’s performance, and for society as a whole.
Statistics show there is plenty of potential for women to step into more board seats:
- According to a McKinsey report, Women in the Workplace 2017, lack of education is not a major reason that women are underrepresented in corporate line roles. Women have been earning more college degrees than men for the last 30 years.
- Most women are remaining in the workforce rather than taking time out for children. McKinsey research found that the number of men and women who leave to care for children is quite low – only two percent or less of the workforce.
- According to a Harvard Business Review article using U.S. Census data in 2010, several managerial occupations became female-dominated, including medical and health service managers, education administration, human resources and property and real estate.
- Redwood City, California-based Equilar said approximately one in five directors at public companies are female. This number grew by 31 percent over the last five years.
- According to MSCI research, more than 20 percent of the 2,451 MSCI ACWI Index companies still have all male boards and nearly all still had majority male boards. Technology company boards appear to offer good future opportunities for female board seats, with nearly a third of these companies still having no women on their boards.
- Executive recruiter Heidrick & Struggles estimates 50 percent of new board directors will be women by the year 2032.
- Legislative and voluntary targets for greater gender diversity appear to work. In European countries like France, Norway and Sweden where such targets exist, women hold more than 30 percent of board positions.
Why is it important for more women to be represented on corporate boards?
Boards of directors make decisions that can impact you, your community and the country.
These boards choose CEOs who then make decisions about compensation and other ways to spend profits, including how to support various social causes. That’s why we think there should be more female voices representing our viewpoints and interests.
In addition to societal advantages, research has shown that organizations themselves benefit from increasing diversity on their boards.
First, gender diversity in a company’s leadership tends to attract and motivate talented employees who want leadership that reflects the diversity of today’s talent pool.
Women are increasingly influencing spending decisions for their family’s wealth, so having women on a board provides more insight into the opinions and priorities of all consumers, not just males.
Rodney McMullen, chairman and CEO of Kroger, suggested to his board that having a more diverse group of leaders “helps you avoid blind spots” when making important corporate decisions.
For suggestions on how to improve your long-term financial security in the face of a pay gap, listen to Dawn’s WTOP 2017 Equal Pay Day interview.
What are strategies women can use to achieve a corporate board seat?
One of the reasons given for lower female representation in the boardroom is lack of sufficiently educated and qualified female talent. But statistics show women continue to earn advanced degrees at equal or higher rates than men.
The real issue is not education, but lack of relevant experience.
How then can women obtain the right qualifications to land a board position?
- It’s important that women actively seek roles with bottom-line, profit-and-loss responsibility. Most public companies seeking board members will require C-level experiences. Experience as a CEO or COO is often the most important credential when applying for a board seat.
- Women should find mentors willing to provide insight on the skills necessary for leadership. Research shows that women are less likely to receive advice from senior leaders on how to advance to higher level positions. For this reason, women need to actively seek mentors and may also want to seek coaching on how to navigate the politics of a larger organization, how to advocate for a promotion and how to build their credibility.
- Expanding your network is also helpful, as many board-nominating committees turn to current board members to supply the names of qualified candidates.
- Starting small may be the best way to build experience in board-related business, including corporate governance, budgeting, strategic planning, and operations. Often, starting local and serving on a nonprofit, startup or trade association board will get you noticed and provide the required background for a bigger corporate board position.
- If you find the invites aren’t coming, consider additional education. The National Association of Corporate Directors (NACD) has local chapters that provide education. Major universities in your local area may also offer corporate director courses to add to your resume.
Overcoming the pay gap will continue to be a challenge for women across the globe.
Our hope is that advocating for more representation for women on corporate boards will lead to stronger financial performance and higher pay for all employees, including women. Encouraging public companies to have a board that reflects the same diversity as their buying population is just one way everyone can make progress towards greater pay equality for all.
Dawn Doebler, CPA, CFP®, CDFA® is a senior wealth adviser at The Colony Group. She is also a co-founder of Her Wealth®.
