Inforum leader: Companies need diversity to compete

For nearly 30 years, women have comprised half the American workforce. And for at least that long, women have been fighting their way to the top of the corporate ladder.

Only a handful of Michigan's top 100 companies appear to be encouraging more women to climb that ladder. A study released late last year by the Inforum Center for Leadership shows, while progress is being made, women still remain outside the board room and corner offices. Inforum President and CEO Terry Barclay believes Michigan companies need more women in the game as they face challenging economic times.

Barclay has been talking about the 2009 Women's Leadership Index since its release last fall, and she laid out the stark statistics for members of the Women Officials Network at a March 5 breakfast meeting at Doyle Center for Professional Development in Bloomfield Township.

"There's good news and there's bad news," Barclay said. "A larger number of companies have women in their top earning ranks...but the percentage of all top five earners who are women is still in the single digits."

Women hold about half of the managerial and professional posts in Michigan businesses and 10.5 percent of all executive offices (in Michigan), significantly lower than 15.7 percent held nationally, Barclay said. She explained top U.S. women's organizations are standardizing the data they collect, and in reviewing their numbers, "the trend I'm noticing is not that Michigan's numbers are getting worse, it's that everybody else's are getting better faster."

One factor may be the large number of Michigan businesses in "survival" mode. Barclay noted that a number of Michigan corporations are coming out of bankruptcy with fewer women on their boards and in top positions.

"Certainly, you wonder if diversity issues become a lower priority as companies focus on survival," she said.

Although women's progress can be measured in baby steps, the lack of progress for women of color is "painfully evident," Barclay said. Only 1.3 percent of board seats, and less than 1 percent of executive officer positions, are held by women of color.

Inforum has published their Women's Leadership Index since 2005, and this year, for the first time, included numbers related to age. Among the directors on the boards of 19 Fortune 500 companies in Michigan, 29 men are age 70 and older. Mandatory retirement policies may represent opportunities for women to move up, Barclay said.

This year, Inforum added another dimension to its report, a "Call for Action" to both companies and women. It lists 10 things companies can do, including a commitment to diversity as "a fundamental business strategy" and measuring results, and 10 things women can do to rev up their careers, such as having an "elevator speech."

Why is diversity important? Barclay pointed to Ernst & Young's "Groundbreakers" study, which concluded "if we're going to transform the world economy, its going to have to be about women." University of Michigan researchers experimented with diverse and homogenous groups and found, even among high performers, diverse groups performed better.

"There's starting to be a growing body of research that connects diversity to bottom-line performance," Barclay said, citing a 19-year study at Pepperdine University of 215 Fortune 500 companies. "They looked at three measures: equity, revenue and assets. The companies with the best record of hiring women beat all other companies by 116 percent on equity, 46 percent on revenue and 41 percent on assets."

"We're in a brain race," she added. "The place with the best brains is going to win. If you're in a global fight for your life, I don't know why you'd leave half of your talent on the sidelines."

Read the Women's Leadership Index here.