Corporate boards in S.C. lack gender diversity

By Liz Segrist
Published June 2, 2014, from the May 19, 2014, print edition

Nearly half of the publicly traded companies headquartered in South Carolina do not have any women on their boards of directors.

According to a recent College of Charleston study, “20% by 2020: Women on Boards,” 20 of the 43 public companies based in South Carolina have no female board members. Those companies are referred to as “Zero” companies in the study. The study reports 14 “Token” companies, meaning they have one woman on their boards.

At three companies, women constitute between 11% and 19% of board members — referred to as “Very Close.”

Studies have found that many factors contribute to women not being equally represented on boards. (Photo/File)

Gender breakdown in the boardroom

A recent College of Charleston study reviewed the corporate board makeup of the 43 publicly traded companies headquartered in South Carolina to determine how many women sit on the boards at these companies. Of the 43, 20 have no women on their boards as of the first quarter. Six of the companies have more than 20% of board seats held by women.

“Winner” companies

(more than 20% of board seats held by women)

Blackbaud Inc.
Delta Apparel Inc.
Coastal Banking Co. Inc.

Denny’s Corp.
The Bank of South Carolina Corp.
Tidelands Bancshares Inc.

“Very close” companies

(11-19% of board seats held by women)

First Financial Holdings Inc.
First Community Corp.
Provident Community Bancshares

“Token” companies

(one board seat held by a woman)

3D Systems Corp.
Sonoco Products Co.
Benefitfocus Inc.
Palmetto Bancshares Inc.
Southern First Bancshares Inc.
Integrated Environmental Tech
Greer Bancshares Inc.

Resolute Forest Products Inc.
First Citizens Bankcorporation
Span-America Medical Systems
Independence Bancshares Inc.
Community First Bancorp.
Atlantic Bancshares Inc.

“Zero” companies

(no board seats held by women)

AVX Corp.
World Acceptance Corp.
Oconee Federal Financial Corp.
First South Bancorp Inc.
Southcoast Financial Corp.
Grand South Bancorporation Inc.
Palmetto Real Estate Trust
First Reliance Bancshares Inc.
Revolutions Medical Corp.

ScanSource Inc.
Regional Management Corp.
Synalloy Corp.
Pernix Therapeutics Holdings
JPS Industries Inc.
Security Federal Corp.
Scio Diamond Technology Corp.
4Cable TV International Inc.
Congaree Bancshares Inc.
First Capital Bancshares Inc.

Source: Women on Boards study, College of Charleston

Only six companies in the state are considered “Winners,” meaning 20% or more of their board members are women. The study focused on public companies because board information for private companies is not always available to the public.

Elise Perrault, a professor at the College of Charleston’s School of Business who spearheaded the statewide study, said she was surprised by the number of boards without women in South Carolina, compared with the Northeast. She said societal pressure to include different genders and races makes boards there diverse.

“The finger is publicly pointed at those firms for not including women. They are seen almost as illegitimate. ... You can’t monitor management the way you need to if you don’t have diversity,” Perrault said. “There’s no checks and balances of conflict.”

A group of educators and businesspeople across the country wants to increase the percentage of women on U.S. company boards to at least 20% by 2020. The 2020 Women on Boards coalition works nationally to push for increases.

Many experts say diversity is important on boards, for considering different points of view when voting on behalf of shareholders and employees. Several studies have shown that companies with women on their boards perform better.

The Securities and Exchange Commission passed a rule in 2010 requiring public companies to disclose the makeup of their boards, with the goal of being diverse. But there’s no requirement or quota demanding diversity and no repercussions for not having it.

The percentage of board seats held by women at public companies nationwide increased to 16.6% in 2013, up from 15.6% in 2012, according to 2020 Women on Boards.

Nationally, the number of “Winning” companies increased to 316 in 2013, up 2.6% from 2012. The number of companies with zero seats held by women decreased to 118 in 2013, down 22.4% from 2012.

But overall, the percentage of women on corporate boards has not fluctuated much for eight consecutive years, according to 2012 data from Catalyst Inc., a group that researches and advocates for women in business.

“Women have to step up and want these positions, and companies also need to create a culture to support that,” said Perrault, chairwoman of the S.C. chapter of Women on Boards. “We have to involve men in the conversation as well. This is not a women’s issue; this is a business issue.”

A diverse group of people is crucial for executives when making decisions, according to Mary Thornley, president of Trident Technical College since 1991. For her, this includes talking to student leaders, as well as the college’s 13-person board, which has three women on it.

“If all of the decision-makers at the table are over 60 and they are all one race or one sex, how can you possibly think you’ve entertained all the possible solutions?” Thornley asked.

Why aren’t more women on boards?

A multitude of factors contributes to fewer women holding seats on boards than men, according to a joint investigation of 60 companies by McKinsey & Co. and The Wall Street Journal.

Part of the reason stems from some women leaving the workforce to raise their children and struggling to move up the ranks when they return, if they return. Some women might not have the inclination to join a board.

Others might be fighting against stigmas or stuck in middle management at a company that does not foster professional paths for women to assume executive or board positions, according to the study.

Companies are often not getting out of their networks or comfort zones to recruit board members, the study said. Some company executives say they can’t find qualified female workers. Those recruiting for board members have to look outside of their normal business circles, which likely reflect their age, gender or background, the study said.

“More than 80% of participating companies’ human resources leaders believe that gender diversity is a business imperative,” the study said. “CEOs articulate simple, compelling rationales, such as ‘getting the best brains to work on the problem’ or having a workforce that better matches customer demographics.”

To increase the number of women on corporate boards and in executive positions, the study says companies need to give women a starting position that reflects their talent, as well as increase their odds of promotion.

Perrault said companies need to have diversity with hires and promotions so that “when it comes to the board, it’s a part of the company culture already, so it’s a natural addition.”

The Bank of South Carolina, based in Charleston, had women filling 20% of its board seats as of the first quarter, making it one of the six “winners” in the state, according to the College of Charleston study.

The bank’s president, Fleetwood Hassell, said companies have to seek diversity in gender, race and backgrounds when filling board seats.

“For all companies, but particularly publicly traded companies, you want to get the best people that you can,” Hassell said. “We seek diversity in knowledge, which is found in having a cross section of people.”

Why does it matter?

Jenny Sanford spent her early career at Lazard Freres & Co., a Wall Street investment banking firm, before moving to South Carolina. The former first lady of South Carolina was politically appointed as a board member for the Charleston County Aviation Authority last year.

“Any good company, whether a public entity or privately held, is well-served by a board with a variety of perspectives on it,” Sanford said. “Whether they are serving constituents, shareholders or employees, boards need different points of view and business experiences.”

Experts say there’s a strong business case for including more women on corporate boards. Credit Suisse researchers looked at the performance of more than 2,000 global companies for several years through 2012. Their study found that companies with women on their boards had higher average returns on equity, as well as higher growth.

Two local women — Julie Medich, a shareholder with Haynsworth Sinkler Boyd law firm, and Jennet Alterman, the former executive director of the Center for Women — worked with Perrault to gather data for the college’s study.

Their goal is to add enough diversity in boardrooms to broaden the conversation. They want every private and public company in South Carolina to have women holding more than 20% of their board seats.

“It’s no longer just a feel-good reason for having women on boards,” said Medich, who focused her Liberty Fellowship project on increasing the number of women on public boards. “There’s lots of data that shows it’s better for their bottom line.”

To change the status quo in South Carolina, Alterman and Medich advocated for CEOs and board chairs to get educated on the value of having women on boards. They said women also need to seek out these positions by networking and voicing their interest.

“It’s up to us to say, ‘Here’s what we can do. We want to be a part of making a company successful.’ We need to get out there and network with men, not just other women,” said Alterman, the S.C. delegate to Vision 2020.

Alterman said a bias still exists among some in the South regarding women in executive positions. She hopes the younger generation will shift that culture.

Thornley has been shifting that culture since she took the helm at Trident Technical College in 1991. She said gender has not factored into her work much at all.

“Diversity is age, gender and ethnicity. If you don’t bring those things to the table, you don’t know if you’ve walked in their shoes,” Thornley said. “Diversity and inclusion are opportunities. Not threats. The benefits of representing the entire workplace far outweigh the shortcomings of not doing so.”

Reach staff writer Liz Segrist at 843-849-3119 or @lizsegrist on Twitter.

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