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Advocates look to the board room

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It's well known that the CEO of General Motors is a woman.
But few likely realize that Mary Barra is one of five women on GM's 12-member board of directors, an equally rare distinction in an industry whose top ranks have always been dominated by men.
That compares with two women out of 15 board members at Ford Motor Co., three women out of 11 at Fiat Chrysler Automobiles and one woman out of seven at Tesla Motors.
Among the 50 largest publicly held suppliers operating in North America, 52 of the 537 board members are women -- 9.7 percent -- according to a tally by Automotive News.
Advocates of gender diversity say it's not merely a matter of being socially progressive. Studies increasingly show that having women on boards is good for the bottom line.
"To provide good governance, it really requires diversity of thought, to make sure they've considered all options," said Kathleen Ligocki, a board member at Lear Corp. and former CEO of Tower Automotive. "If everyone looks at things the same, you're going to miss opportunities."

Women onboard
Women make up a smaller percentage of board members at the top 50 publicly held auto suppliers than the average for companies in the S&P 1500 index.
- S&P 150016%
- Detroit 326%
- 50 top public suppliers9.7%
North America-based12%
Europe-based15%
Asia-based2.3%
  
Source: Ernst & Young, Automotive News research

Ligocki: "Not golf games"

In a survey published this year by Ernst & Young of 400 executives and managers at large companies, 66 percent of respondents said companies with women on their boards achieve better financial results. Sixty-five percent said companies with women in senior leadership roles perform better.
But with few exceptions, the auto industry is behind the curve in this area. Among all companies on the Standard & Poor's 1500 index, women accounted for 16 percent of the board seats, up from 11 percent in 2006, according to a study by Ernst & Young.
"It is edging up, but not quickly enough," said Ruby Sharma, principal at Ernst & Young's Center for Board Matters.
Whereas bankruptcy transformed GM's board of directors -- before bankruptcy, the board comprised just two women and 11 men -- most companies have much less turnover on their boards, which often makes changing their makeup a slow process. And companies also don't want to lose qualified, effective board members purely in the name of demographics, Sharma said.
"When the boards are not turning over, it's very difficult to replace a particular board member with a woman," she said. "It's about a balance. You want diversity, but you also don't want to throw out the experience and institutional knowledge that a long-term board member may have."
Data from the Inforum Center for Leadership, a professional organization for women in Michigan, show that women accounted for just 14 percent of the board members selected since 2013 at the state's 18 largest public automotive-sector companies. GM added two women, while BorgWarner, Visteon Corp. and Tower each added one. Thirty other seats were filled by men.
After those additions, 19 of the 165 seats at Michigan automotive-sector companies, or 12 percent, are now women, according to Inforum's Women's Leadership Index. Again, five of those 19 are at GM.
"General Motors has absolutely broken through the barrier from tokenism to critical mass," said Terry Barclay, Inforum's CEO.
A few European automakers do have relatively diverse supervisory boards; women account for six out of 20 members at BMW, five out of 20 at Daimler AG and four out of 20 at Volkswagen AG. But Toyota Motor Corp. and Honda Motor show just one female director each in their latest annual reports, and Hyundai Motor's board is all men.
Broken down geographically, the suppliers follow a similar pattern of diversity as the automakers. At North America-based suppliers, 12 percent of directors are women, while Europe-based suppliers have boards that are 15 percent female. But women account for just 2.3 percent of directors at Asian suppliers.
Germany-based Hella KGaA Hueck & Co. has five women on its 16-member supervisory board, while Plastic Omnium and Valeo, both French, have four women on their boards. Only 13 of the 50 largest suppliers have more than one female director, and 22 companies have all men, with 12 of those based in Japan or Korea.

Barclay: "At GM, "critical mass"

Because directors tend to be active or retired executives elsewhere in the business world, the increasing number of female leaders at many companies is creating a larger pool of board candidates to choose from.
"I think we could be a little more aggressive and potentially go a little bit lower in the organization to pick people who might be at executive vice president level or on their way," said Felicia Fields, group vice president for human resources and corporate services at Ford Motor Co. "You can get a lot of people with talent who are not yet CEOs or CFOs who might have the skills and experiences to help. In general, we need to get a little bit more courageous in casting the net more broadly to round out our boards."
The UAW's retiree health care trust has been on a campaign since 2010 to urge companies in which it has an ownership stake to add female board members, with the notion that it would help them perform better.
One of those companies, Visteon, added Joann Maguire, a retired aerospace executive, in January. She's the only woman on the 10-member board.
A Visteon spokesman, Jim Fisher, said the company has had female directors at various times in the past and already had been searching for new board candidates with diversity in mind when the UAW trust contacted it last November.
"Visteon's board of directors, and the company, agree there is great value in the ability to draw on a diversity of skills, experiences and backgrounds," Fisher wrote in an email. "When identifying and evaluating candidates to serve as directors, diversity is a part of the overall mix of factors that the board and its corporate governance and nominating committee have historically considered, and continue to consider. The board regards diversity as an important factor in the selection and nomination of director candidates."
Women account for a large portion of the customer base automakers and suppliers are trying to reach with their products. Various studies in recent years have shown that women make or influence a majority of vehicle purchases. That can leave companies with men in all the board and executive roles at a disadvantage as they map out marketing and product-development strategies.
Ligocki, now CEO of Harvest Power in Waltham, Mass., said boards can no longer afford to be "old boys clubs" in an era of global competition and consolidation.
"How can you be in the 21st century, trying to attract millennials, if you're not in this century?" she asked. "Boards' roles are really active governance now. It's not golf games a couple of times a year anymore. That changes who you need on boards now."

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