Women in the Global Corporate Elite: Evidence from the 2006 Global Fortune 500

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Women in the Global Corporate Elite Evidence
from the 2006Global Fortune 500

• Clifford L. Staples
• Heather Jackson
• Department of Sociology
• University of North Dakota, USA

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Purpose of Research

• Study the rise of the Transnational Capitalist
  Class or Global Corporate Elite
• Explore the role of women in the Global Corporate
  Elite
• Specifically, explain variation in the presence,
  or absence, of women on FG500 boards

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Previous Research

• Most work has been descriptive and/or normative
• No studies specifically of the FG500
• Need to understand and explain diversity in the
  global power elite and its consequences

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Data

• Fortune Global 500 (498) for 2006
• Director names from company web-sites collected
  in late 2006-early 2007
• Sex coded from name, photos, press coverage,
  web-searches, etc.

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Descriptive Findings

• 6,633 directors, 5,743 individuals
• Consistent with previous research on top
  corporate boards, we find only a small minority
  are female. Of the 5,743 individual directors
  584, or 10.2 are women
• There are, however, differences by the country in
  which the corporation is headquartered

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Descriptive Findings
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Descriptive Findings

• On average, there are 1.38 women per board as
  compared to 11.94 men per board
• Proportionally, women represent from 0 to 50,
  with an average of 10.55 per board.

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Royal Ahold Netherlands 50.00
Statoil Norway 46.15
La Poste France 42.85
Albertson's United States 42.85
Nordea Bank Sweden 36.36
Sysco United States 36.36
Sara Lee United States 36.36
ATT United States 35.29
CFE Mexico 33.33
Aetna United States 33.33
J.C. Penney United States 33.33
Merrill Lynch United States 33.33
Xerox United States 33.33
McKesson United States 33.33
Office Depot United States 33.33
Wellpoint United States 31.25
Electrolux Sweden 30.76
Johnson Johnson United States 30.76
Washington Mutual United States 30.76
TIAA-CREF United States 30.76
Norsk Hydro Norway 30.00
U.S. Postal Service United States 30.00
Cigna United States 30.00
3M United States 30.00
Accenture United States 30.00
UnitedHealth Group United States 30.00
Coles Myer Australia 30.00
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Descriptive Findings

• The correlation between number of women on the
  board and proportion of women on the board is
  quite high (.908), suggesting that the boards
  that do include women are replacing men rather
  than simply adding women and increasing board
  size
• Consistent with this interpretation, the
  correlation between board size and proportion of
  women is relatively low (.190)

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Accounting for Women on FG500 Boards

• While in the aggregate the proportion of women in
  the Global Corporate Elite is quite low (10-15),
  there is considerable variation in the
  proportion of women on FG500 boards
• How can we explain this variation?
• How might the Global Corporate Elite become less
  male-dominated?

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Accounting for Women on FG500 Boards

• Proponents of increasing the number of women on
  corporate boards stress the importance of
  networking, but there is little empirical
  research on how, or if, social networks might
  play a role.
• While we do not have data on personal networks,
  because of director interlocks we do have network
  data for the corporations and directors of the
  FG500 (ex. Anne Mulcahy)

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Accounting for Women on FG500 Boards

• Corporate boards are interested in minimizing
  uncertainty and discomfort and maximizing comfort
  and predictability (Kantor)
• Women in the heretofore all-male world of the
  corporate elite are seen as a threatening and
  potentially disruptive to this world
• Given that women on corporate boards are few and
  far between many boards and most male directors
  have little or no experience with female
  colleagues on boards

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Accounting for Women on FG500 Boards

• Thus, knowledge of what it is like to serve on a
  diverse board is a bit of social capital that is
  unevenly distributed across this community
• Given that possession of this knowledge will tend
  to reduce uncertainty, we would suggest that the
  inclusion of women on corporate boards within the
  community will generally follow the diffusion of
  such knowledge

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Accounting for Women on FG500 Boards

• And given that the diffusion of such knowledge is
  likely to be transmitted via both formal and
  informal connections, we would predict that,
  other things equal, the most connected firms the
  firms with the most ties to other firmswill be
  more likely to have any women directors as well
  as a greater proportion of female directors.

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Accounting for Women on FG500 Boards

• First we treat both independent and dependent
  variables as dichotomous (interlocks/no
  interlocks by women/no women)

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Chi-Square 90.71, 1df, sig. .000
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Accounting for Women on FG500 Boards

• Shifting to measuring the dependent variable as
  the proportion of women on the board, and
  controlling for the size of the company a
  variable thought to be important by some the
  results are substantively the same, with a
  substantively and statistically significant
  effect (.313) for having any connections.
• Though smaller (.216), the effect when using the
  number of links as the independent variable holds
  up.

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Accounting for Women on FG500 Boards

• The extent to which firms with women are
  connected, and to each other in particular, can
  be seen from two contrasting network diagrams
• The first diagram shows the connections, or lack
  of connections, between firms that no women on
  the board. Of the 155 firms without women, only
  57 have a tie to another firm, the majority
  (63.2) are isolates. And as is evident, the
  network is very fragmented.

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Companies with no women on Board
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Accounting for Women on FG500 Boards

• The second diagram shows the network produced by
  corporations who have women on board. Of the 343
  firms with women, all but 49 are connected to
  another firm, and, in fact, 291, or 84.8, are
  connected in one network. Thus, it is not only
  the case that connected firms are more likely to
  have a woman on the board most of the firms with
  women on board are connected to each other.

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Companies with women on Board
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Interlocks and Networks

• An interlock occurs when an individual corporate
  director serves on the boards of two or more
  companies
• Such an interlock connects the companies and
  individuals involved into a network.
• Anne Mulcahy, for example, as of 2006 served on
  the boards of Target, Xerox, and Citigroup

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Interlocks and Networks

• Probably the most connected corporate director in
  the world is a Frenchman by the name of Louis
  Schweitzer. He serves on the boards of 8
  different corporations from 4 different
  countries.

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Two Kinds of Networks

• From corporation by director networks you can
  create corporation-corporation networks and
  director-director networks
• Both kinds of networks are of interest to
  researchers

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FG500 corporate network 2006
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FG500 directors 2006
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Women in the FG500

• Also consistent with previous studies, we find
  that women constitute a very small proportion of
  CEOs
• There are just 8 women CEOs out of 505 (some
  companies have dual CEOs).

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Women CEOs of FG500 2006
Name Nationality
Hayashi, Fumiko Japan Daiei
Lund, Helge Norway Statoil
Sammons, Mary F. U.S. Rite Aid
Woertz, Patricia A. U.S. Archer Daniels Midland
Barnes, Brenda C. U.S. Staples Sara Lee
Idrac, Anne-Marie France Dexia Group SNCF
Mulcahy, Anne M. U.S. Citigroup Target Xerox
Lauvergeon, Anne France Suez Total Vodafone AREVA
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Women in the FG500

• On the other hand, women are just as likely to
  serve on multiple boards as are men (men 1.15
  boards on average women 1.18 boards on average)
• Just as likely to serve on a foreign board (men
  11.4, women 10.8)
• And just as likely to link two boards from
  different countries (men 3.0, women 3.3)

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Women in the FG500

• The emergence of a transnational corporate
  network, or community, that transcends both
  company and country is a notable feature of
  globalization
• We are not aware of any studies, however, that
  explore the position of women within the
  transnational corporate director network
• A critical question is whether the women who have
  made it into the network have access to each
  other and to positions of power within it.

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A Mans World

• As the two previous graphs show, the women are
  largely superfluous to the network most men are
  connected to other men in the network whether or
  not the women are present.
• In contrast, only some women are connected to
  each other without going through men. Their
  network is much more fragmented, and many women
  are cut off completely from the other women in
  the network.
• In short, in the world of the global corporate
  elite, women need men far more than men need
  women.

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A Mans World

• This is also evident in the brokerage scores
  for the men and the women
• Brokerage (number of pairs not directly
  connected). The idea of brokerage is that ego is
  the "go-between" for pairs of other actors. In an
  ego network, ego is connected to every other
  actor (by definition). If these others are not
  connected directly to one another, ego may be a
  "broker" if ego falls on a the paths between the
  others. One item of interest is simply how much
• potential for brokerage there is for each actor
  (how many times pairs of neighbors in ego's
  network are not directly connected). In
• our example, actor number 5, who is connected to
  almost everyone, is in a position to broker many
  connections.
• Brokerage scores
• Sex of Individual Mean N Std. Deviation
• male 349.08 584 618.118
• Female 230.21 81 201.204
• In contrast, only some women are connected to
  each other without going through men. Their
  network is much more fragmented, and many women
  are cut off completely from the other women in
  the network.

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Power in Networks

• Power is based on the possession or control of
  resources
• In networks, information is a resource, and so
  whoever has access to information has power
  relative to other actors in the network
• In networks, not all actors have equal access to
  other actors, creating inequality in resources
  and thus inequalities in power.
• Independent of the number of women in the
  network, are they positioned in a way that gives
  them less power than men?

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Sisterhood

• Since women are
• In networks, information is a resource, and so
  whoever has access to information has power
  relative to other actors in the network
• In networks, not all actors have equal access to
  other actors, creating inequality in resources
  and thus inequalities in power.
• Independent of the number of women in the
  network, are they positioned in a way that gives
  them less power than men?

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Brokerage in Networks

• B is acting as a coordinator between actors A
  and C, because all three actors belong to the
  same group.

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Brokerage in Networks

• B is acting as a consultant between actors A
  and C, because B does not belong to the same
  group as A and C.

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