Article originally posted by Buffalo Business First
The board of directors of Evans Bancorp Inc. is an anomaly in Western New York.
That’s because there are three women on the board, more than any other public company headquartered here with the exception of Financial Institutions Inc., whose board also has three women.
Two of the three women sitting on the Evans board were elected last month. But the Angola-based parent company of Evans Bank N.A. has a long history of including women in the boardroom.
The top executive said the focus on diversity is an effort to make sure bank leadership looks like the people it serves.
“Our thought process was: If we are going to have seats open, we are going to broaden the perspective,” President and CEO David Nasca said. “This work is being done at the whole-bank level, too. We think it extends beyond the board and needs to be top-of-mind every day.”
That’s not the way of thinking at some public companies in Western New York that have long been dominated by men in the executive ranks and around the board table.
It’s starting to change at several firms whose boards pay more attention to diversity in general, but the change is slow.
A review of annual proxy statements filed in 2007 shows that women held 5 percent of board seats at the region’s publicly traded companies that year. By 2017 that figure had crept up to about 10.5 percent.
Sheri Scavone, executive director of the WNY Women’s Foundation, called the figures “abysmal” and said there are several factors that contribute to the low numbers. They include subtle bias, historical views on women’s roles in the workforce and an element of the old-boy network in local business.
“If women are not in your circle, then you don’t know what they can bring to the table,” Scavone said. “And then you’ll say, ‘There’s no woman that’s qualified.’ ”
Lots of white men
The lack of women on public boards is not a Western New York-only issue. According to a December report by Director Search, U.S. public companies average just 12 percent female representation, the same percentage as all public companies around the world.
The figures are slightly better among the 3,000 U.S. companies listed on the Russell 3000 index. A 2017 report by Equilar shows that women occupy 16 percent of board seats in that index, which includes 624 companies that have no women at all sitting on their boards.
The reality is that boards of large and small U.S. public companies are filled with white men, and that’s a problem when it comes to revenue generation.
Simply put, research shows that businesses with more women in leadership roles are more profitable than their peers.
2020 Women on Boards is a nonprofit organization that started a campaign eight years ago to get more women in boardrooms. The group aimed to get at least 20 percent of board seats at Fortune 1000 filled by women by the year 2020.
That goal was achieved ahead of schedule, but there’s still work to do, especially given the Russell 3000 stats.
“Twenty percent should be the baseline,” said Malli Gero, co-founder of the group. “In a perfect world, you would look at parity. I don’t know how realistic parity is, but certainly we want to look at something better than 20 percent.”
Expand search criteria
In Western New York, seven public companies in 2017 had boards comprised entirely of men. That number will drop to four this year: Astronics Corp. in East Aurora, Columbus McKinnon Corp. in Amherst, Servotronics Inc. in Elma and Taylor Devices Inc. in North Tonawanda.
Douglas Taylor is the soon-to-be-retired president and CEO of Taylor Devices, which manufactures a variety of shock absorption and damper products. He also is chairman of the board.
To date, the only woman who ever sat on the board was Taylor’s mother, but she left when the company went public. The board currently has five directors including local businessman Fritz Armenat, who was appointed May 3 to fill the seat of the late Reginald Newman II, who died in April.
Prior to Armenat’s appointment, Taylor said he had “no idea” if any women were being considered for the seat. He said he thinks it’s difficult to find qualified women from the manufacturing field.
“We’re a manufacturing company so we have to look for people who have manufacturing backgrounds. And like it or not, in today’s makeup of the workforce, there aren’t that many women in manufacturing at a high level who have been doing it for a long time,” he said.
Some boards might find female directors if they expanded their search criteria, said Nora Sullivan, a director on the boards of Evans Bancorp and 22nd Century Group Inc., based in Amherst.
As president of Sullivan Capital Partners LLC, she provides investment banking and consulting services to closely held private businesses. She said there are plenty of women who could fill open board seats, but considering women hasn’t been the norm at some firms.
“The traditional way of finding board candidates was to just go through your network,” Sullivan said. “There were prominent men on these boards and they just kind of fed on themselves, so they went through their contacts. It’s not that those were bad candidates, but they were just not looking at female candidates.”
Shareholders want change
Some public companies might be forced to consider women directors in the future. Shareholders including large institutional investors such as BlackRock Inc. call for more diversity in gender, race and ethnicity.
Earlier this year, BlackRock – the largest money manager in the world – stated in a regulatory filing that it would expect to see at least two women on the boards of all companies in which it invests.
Such pressure might be the catalyst for change, according to Gero of 2020 Women on Boards. She said too many companies of all shapes and sizes follow the outlook of “If it ain’t broke, don’t fix it.”
“Unless someone is demanding change, things don’t change,” Gero said. “You really need to have people paying attention to this, looking at this and saying, ‘You know what? This no longer reflects our constituency, our shareholders or what’s happening in the world.’ ”
The WNY Women’s Foundation is tapping into those feelings. Last month, the advocacy group launched All In, an initiative to address the disparity of women in leadership roles in Western New York.
All In aims to increase the number of them in leadership positions. One component involves collecting data from individual companies to get a sense of how many women actually work in leadership roles in this area.
The ultimate goal is to “change the culture” of the region, Scavone said.
“We don’t want to just take a bite,” she said. “We’re looking at a long-term cultural shift and really positioning Buffalo as a national model (for gender diversity).”