Microsemi, a major chipmaker, has no women among its highest-paid executives. And none on its board of directors.
Until recently, that wasn’t an issue. “Tech companies convinced ourselves, ‘Oh, there are so few engineering-minded females,’” says James Peterson, chairman and chief executive of the Aliso Viejo-based corporation. “But today in engineering, the best-in-class students are often female.”
Now, he acknowledges, “I feel guilty there are no females on my board of directors. As I look at the boards of other companies, I think it’s time.”
Businesswomen may be “leaning in,” or pushing to get ahead, as Facebook’s Sheryl Sandberg famously advised them to do. But in Orange County, even more so than in California and the nation at large, they’re only beginning to crack the glass ceiling.
At a time of increased scrutiny of corporate diversity, 9.5 percent of the highest-paid executives at the county’s major publicly held companies were women, and women held 10.5 percent of board seats, according to an analysis of their most recent proxy statements by UC Davis’ School of Management.
Only one of those O.C.-based companies had a female chief executive: Lauralee Martin, CEO of HCP, an Irvine real estate investment trust.
Nine had neither a woman in any of the top positions nor on the boards of directors that oversee operations. That’s a larger proportion ranked zero by UC Davis than the statewide average.
“We need to move faster,” said Lucy Dunn, president and CEO of the Orange County Business Council, which represents large local corporations.
“The case for women at the top is compelling. If companies want to be stupid and not have women as a competitive advantage, it is at their own peril.”
The UC Davis study examined the state’s 400 biggest companies by market capitalization – defined as the number of shares multiplied by their price – including 37 in Orange County. Seventeen of these big California companies, or 4.3 percent, had female CEOs, including such high-profile giants as Hewlett-Packard, Yahoo and Sempra Energy.
Ninety-two did not have a single woman among their highest-paid brass or on their boards – including such high-profile consumer brands as Skechers USA in Manhattan Beach, Habit Restaurants in Irvine and Stamps.com in El Segundo.
“Southern California has not seen a lot of change in the percentage of women leaders relative to Northern California,” said Amanda Kimball, the study’s chief researcher. “Orange County is toward the bottom of the list.”
Microsemi may have begun to scout for a female director – Peterson says he has one in mind.
Russ Bendel, president and CEO of Habit Restaurants, which has 140 eateries in nine states, says his company, too, “will be working to become more diverse. We think about it all the time. Over 45 percent of our consumers are women.”
Bendel attributed his Irvine chain’s lack of female leadership to having been a public company only for about a year. “So most of our board members are insiders and private equity partners which still own 40 percent of the shares.”
Clean Energy Fuels, a Newport Beach company that builds natural gas stations for trucks, is another with no women at the top. “Gender diversity is relevant,” said President and CEO Andrew Littlefair. “People with different backgrounds make for better management.”
But he added, “When you think about trucking, fuel stations, oil and gas, you can run into women with expertise, like my friend Debbie Reed, CEO of Sempra. But there aren’t too many.”
Similarly, Greg Stapely, president and CEO of CareTrust REIT, based in San Clemente, cited a dearth of female experts in his field.
“Women are underrepresented in our industry,” he said. “It is fairly specialized. You have to understand health care operations as well as real estate.”
Nonetheless, a growing number of women executives have the expertise to serve as chief financial officers, often a steppingstone to the top job. Fifty-two of California’s 400 top companies have a female CFO.
Three are in Orange County: at Opus Bank in Irvine; the Ensign Group, a Mission Viejo-based chain of nursing homes and health care companies; and QLogic, an Aliso Viejo-based technology infrastructure company, where CFO Jean Hu is, for the moment, serving her second stint in less than three years as an acting chief executive, after top management upheaval.
The gender gap persists even as a raft of studies show higher shareholder returns, better decision-making and more innovation among companies whose leadership includes women.
In the latest report, MSCI, the global financial analytics firm, found that corporations with “a strong female leadership” – defined as either three or more female board members, or a female CEO plus a female board member – generate a 10.1 percent return on equity per year, compared with 7.4 percent for those that don’t.
In California, UC Davis found that the 25 firms with the highest percentage of female executives and board members had a median return on assets and return on equity at least 74 percent higher than for the 400 companies overall.
UC Davis has analyzed California’s corporate gender diversity for about a decade, and its annual reports show improvement – albeit at a glacial pace.
“The ‘lean in’ movement has highlighted the need to encourage and assist more women to take a seat at the table,” said Ann Huff Stevens, dean of UC Davis’ Graduate School of Management. “Corporate leaders need to change their thinking, moving beyond close circles to find talent.”
Among top companies statewide, the female proportion of highest-paid executives rose to 10.5 percent in 2015 from 7.8 percent in 2007, the first year those data were collected.
The percentage of women directors grew somewhat faster, to 13.3 percent from 8.8 percent in 2006.
In 2009, CalPERS and CalSTRs, the giant California public pension funds, launched the Diverse Director DataSource, a clearinghouse of qualified director candidates. The database includes 800 profiles, two-thirds of them female.
The two funds are part of the Thirty Percent Coalition, a national group of businesses, investors and nonprofits seeking to boost female board seats in public companies to 30 percent. In the past two years, the California, Massachusetts and Illinois legislatures passed nonbinding resolutions calling on public companies to adopt similar targets.
In California, 36 of the biggest public companies had three or more women directors on their boards, according to the UC Davis study. In Orange County, two did: Ingram Micro, an Irvine-based tech giant, and Kaiser Aluminum, a Foothill Ranch aerospace manufacturer.
The UC Davis report, with a searchable database, lists the state’s top corporate women by name, offering an easy-to-access Who’s Who in the upper echelons of such global powerhouses as Apple, Chevron, Walt Disney, Intel, Visa, Google and Oracle.
And it lays out a road map for consumers who might want to comparison shop based on gender equity. San Francisco-based Williams-Sonoma, for instance, ranks No. 1 on the UC Davis list, with more female leaders than any other company: 57 percent.
Wells Fargo, with 41 percent, has more than any other California-based bank, while Irvine-based Banc of California has none.
The proxy statements on which UC Davis bases its tallies are mostly filed in the spring, reporting on leadership in the previous fiscal year. The U.S. Securities and Exchange Commission requires disclosure of the compensation of CEOs, CFOs and the three other most highly paid executives.
Despite the California Legislature’s 2013 resolution, the latest UC Davis report shows that only 17.5 percent of the state’s 400 largest public companies met the resolution’s goal of boosting the number of women directors.
By 2016, the resolution declared, California public companies with more than nine members on their boards should have at least three women directors. If a corporate board has five to eight seats, at least two should be held by women. If fewer than five, at least one should be female, the resolution stated.
“Women have a different life experience,” said Dunn, whose OCBC board includes executives from Experian, the Boeing Co., the Irvine Co. and other local giants. “We are major spenders. The demographics with two-income families are clear. The more of us you bring into the boardroom, it will help folks see beyond their same-old, same-old vision.”
Dunn added that if Orange County companies think they can’t find qualified women, “I am ready and available to suggest some.”
Contact the writer: mroosevelt@ocregister.com; Twitter @MargotRoosevelt
