Lizanne Thomas joined the Krispy Kreme board as an expert in corporate governance and board responsibility. (John Disney/Daily Report)
When the doughnut maker Krispy Kreme hit tough times in the early 2000s, attorney Lizanne Thomas was approached to join the company’s board of directors.
Krispy Kreme was struggling to manage its rapid expansion—while taking a hit from a low-carb diet fad—and its stock price and performance were dropping. The company then came under investigation for possible wrongdoing.
“The board determined that they needed to add a couple of independent directors to come in and do that investigation and help them clean house, if that was necessary,” recalls Thomas, partner-in-charge at Jones Day in Atlanta. An expert in corporate governance and board responsibility, Thomas was a clear choice for the board.
Although women have made strides in the corporate environment, their numbers still lag behind when it comes to corporate boards.
Women hold only 16.9 percent of the seats in Fortune 500 boardrooms, according to a 2013 study released by DirectWomen, a nonprofit organization founded in 2007 as a project of the American Bar Association in an effort to increase the representation of women on corporate boards. There was no increase from the previous year, with the same percentage of women holding seats in 2012.
Fewer than one-fifth of Fortune 500 companies had 25 percent or more women directors, while one-tenth had no women serving on their boards, according to the study. Women of color hold even fewer seats, with only 3.2 percent of board seats.
“Unfortunately, the numbers, at least over the last eight years, have been relatively stagnant by percentage,” says Kathleen Franklin, senior counsel at Sony Corp. of America and an inaugural member of DirectWomen.
In Georgia, the numbers are bit more promising.
All of the state’s 16 Fortune 500 companies have at least one woman on their boards and more than half of those boards have at least two women directors, according to the board listings on each company’s website.
Seven companies in Georgia–Coca-Cola Enterprises, The Coca-Cola Co., EarthLink, United Parcel Service, AGL Resources, State Bank Financial Corp. and The Home Depot—have more than two women board members, according to a 2013 study by OnBoard, a Georgia-based nonprofit that works to increase the number of women on corporate boards and in leadership positions.
Franklin says the primary reason more women aren’t on corporate boards is networking.
Board members typically are looking for a specific type of candidate; someone who “looks like them,” says Franklin.
“In other words, there are fewer women in these executive roles for them to choose from. When someone is picking a director, they do want to pick someone they know for various reasons,” she says. “So if you’re looking in that particular network, I think that suppresses the chances of a woman being appointed on a board.”
Catharine Arrowood is a senior partner at Parker Poe in Raleigh, and sits on the board of directors of Rex Healthcare. She says when women are overlooked for board positions it’s a subconscious action by most men. “I don’t think it’s willful or deliberate, but serving on a board you are in fairly tight relationships,” says Arrowood, “so it’s not surprising that people want to pick people that they are really comfortable with, socially and otherwise.”
Most women board members emphasize strategic networking as essential in gaining a seat at the corporate board table.
“The first thing is that you’ve got a skill set that matches a board’s particular needs,” says Thomas. “Second is what I gracefully call ‘seasoning.’ You really have to be somebody who’s been in the corporate world or in a relevant space for a long time and you are at the top of your game,” she says.
“And then the third thing they look for, in terms of quality, is somebody who’s really going to be a peer … you’re going to be a constructive member of the group because the most important thing to remember about a board is that they make decisions as a group and they have power as a group,” says Thomas.
Madame Director, Esq.
What do women, particularly women lawyers, bring to a board? “Lawyers, in general, make valuable contributions to boards,” says Franklin.
Franklin backs up her statement with a 2013 University of Arizona Law School study that shows having a lawyer on a board contributes to increased company value and a more informed perspective on both regulatory and litigation risks.
Franklin says women lawyers bring a diverse perspective. “Eighty-five percent of purchasing decisions in the U.S. are made by women, ” she says. “ A company should have some perspective on its demographics. So if your consumers are women, doesn’t it make sense to have a woman on the board?”
Thomas says lawyers also bring unique skills to a board.
“I think the thing I respect most about my profession is that lawyers are unafraid to step in the breach of a complicated issue and see if they can figure it out,” she says. “It’s what we do. It’s what we’re trained to do. So I think that really adds value at the board level.”
As a litigator, Arrowood says she is in the business of risk management and problem solving, which can be a great asset for a board. “You have a really good point of view,” she says, “maybe a little bit outside the box than what management might have with regard to the options to solve the problem.”
Rona Wells, executive director of OnBoard, says it’s not simply about
appointing a woman to a board, but it’s about the diversity.
“There’s been a ton of studies done around the world and they say that when you have diverse perspectives in the room your discussions are richer, they are broader and you have the opportunity to make better decisions,” Wells says. “I think that applies to gender diversity as much as any other kind of diversity.”
But serving on a board can also help an attorney in her practice.
“It has made me a better adviser to our clients, there’s no question,” says Thomas.
Thomas points out that serving on the Krispy Kreme board has taught her to give clear and concise answers as well as to offer her clients the benefit of her judgment. “I understand now that part of what a CEO or general counsel pays me for as their outside lawyer is the fact that I do have a lot of road miles behind me and they want that judgment as much as they want the legal niceties,” she says.
If there is a liability or downside, most say it seems small in comparison to the rewards.
“It’s a huge time commitment,” says Thomas, “but I think the trade-off is well worth it because it makes me a better lawyer.”
For Arrowood, serving on the Rex Healthcare board has allowed her to use her skills in a different context and she has learned from other board members. “I’ve had the good fortune when sitting on boards to be working with really talented businesspeople, and I’ve learned a huge amount from them, generally, about how to manage things,” she says.
Arrowood remembers her time as a new lawyer in 1976 when there were few women lawyers in North Carolina and her presence often made men uncomfortable. “They didn’t know what to do with me,” she says.
Times have changed and Arrowood thinks women’s presence on boards will too.
“I think it’s sort of the same thing in the boardroom,” says Arrowood. “As the courtroom has gotten more used to seeing women in all roles, the boardroom is getting there. It’s just subject to a little slower change.”