Automotive News - November 9, 2015 - Supplement - 17W

20151109-Sup1--0017-NAT-CCI-AN_--

11/3/2015

10:12 AM

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NOVEMBER 9, 2015 * 17W

L E A D I N G

W O M E N

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BOARD BARRIER
GM is a leader with 5 female board members,
but other companies have work to do, advocates say
Nick Bunkley

nbunkley@crain.com

t'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.
Ligocki: "Not
"To provide good
golf games"
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."

Better financial results
In a survey published this year by EY 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

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 1500
16%
■ Detroit 3
26%
■ 50 top public suppliers
North America-based
Europe-based
Asia-based

9.7%
12%
15%
2.3%

Source: EY, Automotive News research

from 11 percent in 2006, according to a
study by EY.
"It is edging up, but not quickly
enough," said Ruby Sharma, principal at
EY'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, ac-

cording 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 Americabased 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.

Larger candidate pool
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 Barclay: At GM,
and nomination of di- "critical mass"
rector 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." c

Automotive News - November 9, 2015 - Supplement

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