Increasing Female Representation on Boards
Q&A with Two Women Focused on Increasing Female Representation on Boards
By Eileen Kamerick, Audit Committee Chair of the Legg Mason LMP Closed-End Mutual Fund Board, and Betsy Berkhemer-Credaire, CEO of 2020 Women on Boards
The Chicago chapter of 2020 Women on Boards (2020WOB) bestowed the Ambassador Award on Legg Mason’s Closed-End Fund Board in November 2019 for being comprised of more than 20% women. In fact, half of the eight members are women.
Eileen Kamerick has been a member of Legg Mason’s Closed-End Fund Board since 2013; she’s also chair of its audit committee and a member of the nominating and governance committees. The board oversees the operation of 23 separate closed-end funds, including a wide array of equity and fixed income funds as well as funds that invest in energy master limited partnerships.
Betsy Berkhemer-Credaire is the CEO of 2020WOB, a national campaign to educate and prepare more women to serve on corporate boards of directors, and to encourage more companies to seek and select them. Her book, called “Winning The Board Game: How Women Corporate Directors Make THE Difference,” was published in November 2019.
How is 2020 Women on Boards working toward its goal?
Eileen Kamerick: I got involved with 2020WOB in 2016, and I’m very proud that the Chicago chapter chose to honor Legg Mason’s Closed End Board. 2020WOB set what seemed to be an audacious goal back in 2010 – that public company boards should have at least 20% women. The leaders knew that which gets measured gets managed and they were exactly right. 2020WOB has really shone a spotlight on this issue.
Betsy Berkhemer-Credaire: We are proud that 2020WOB has met our goal – in fact, we succeeded early. Women hold 20.4% of board seats among Russell 3000 companies as of June 30, 2019, an increase from 17.7% in 2018. The percentage of women at the 100 largest companies is 27.7%, whereas it's 15.7% at the 1,000 smallest companies.
What has been successful in bringing change?
Berkhemer-Credaire: One of the things that moved the needle was a law in California that required all corporations in the state that are listed on the Russell 3000 to have at least one female board director by the end of 2019. As of last year, we have 183 new women board members added to California’s public companies. Never before had there been more than 60, and most of them are newly added seats.
Kamerick: The most immediate thing that boards can do is make a commitment that, every time they have a seat open, they will consider a diverse slate of qualified candidates. This is known in the sports world as the “Rooney Rule.” It came out of the National Football League, which instituted a policy that requires teams to interview ethnic-minority candidates for head coaching and senior football operation jobs.
What are the opportunities for women on boards today?
Kamerick: In the past, the most desired corporate board member was a current or retired CEO. The problem with that is there are a limited number of people with that profile, and they’re primarily men. But as a result of changing requirements such as Sarbanes Oxley, the requirements for board and audit committee members have changed and created opportunities for women who meet the standard of being an SEC financial expert. These new requirements have opened the door for directors with a different profile.
In addition to CEOs, today there are many new opportunities for women who are attorneys, CFOs and accounting experts, to name a few. For example, audit committee members are required to have a deep level of expertise and technical knowledge that wasn’t required years ago. The same is true for nominating and governance committee experts. Cybersecurity is another field where we need highly experienced, deeply knowledgeable practitioners. And compliance and governance concerns have opened the door for candidates with legal and regulatory backgrounds.
Berkhemer-Credaire: Two additional areas that have become important over the last five years are human resources and digital marketing. Chief human resources officers are being sought out because boards need experts who are qualified to understand the complex compensation packages we see now for the CEO and senior management. They also have experience with labor relations and workforce management. And the digital marketing area is hugely important; it presents opportunities for chief information officers and chief marketing officers who can understand social media.
What surprises women the most when it comes to joining a board?
Berkhemer-Credaire: That women need to manage their own personal campaigns to find a board seat. Especially for a woman’s first board, search firms are not going to call. Women need to start telling people that they intend to serve on a corporate board. That’s how it starts. After that, it’s all about who you know. Get to know people who serve on corporate boards. Network with them. Take them out for coffee. Tell them about your experience and why you’re a good fit for a board.
2020WOB holds global events every November. This year, we’re expanding from 33 cities to 40 cities in the U.S. and internationally. We focus on helping women learn how to network as well as whom to call and what to say. Sharing knowledge is an important part of what we do.
What advice do you give to people who are hoping to join a board?
Kamerick: Think about how to position your background and your expertise to distinguish yourself as a desirable candidate. Betsy’s advice that people should build relationships with those who have board connections is important because most people – men and women – get on their first board through some sort of personal connection. It could be your banker, CPA, nonprofit board members or university connections—you never know.
Prepare a concise summary that explains why you want to be on a board. It has to be compelling – explain why you’re driven to do this and what you bring to a board. Industry experience is somewhat less important than specific functional expertise – IT, audit, governance, etc. After all, committees are the building blocks for forming effective boards of directors.
Kamerick's and Berkhemer-Credaire's opinions are not meant to be viewed as investment advice or a solicitation for investment.
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