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EDSR INFORMATION #2 10-13-2003 • Women increase presence on state,national boards - 2003-09-22 - The Business Journal (... Page 1 of 3 The Business Journal(Minneapolis/St.Paul)-September 22,2003 http://twincities.bizjournals.com/twincities/stories/2003/09/22/focus6.html (,41,)kfrii.V.A • 11! #E LI a St PAUL TIE S JM i IN DEPTH: LAW: CORPORATE GOVERNANCE Women increase presence on state, national boards Nicole Garrison Staff Reporter When John Pillsbury Jr. asked Luella Gross Goldberg to serve on the board of Northwestern National Life Insurance Co. in 1976, it took her less than 24 hours to decide to take him up on his offer. "It was a fascinating opportunity for me," Goldberg said. In addition to the doors the position would likely open for her, Goldberg believed her work with Northwestern National could open doors for other women as well. Perhaps it has. When Goldberg joined Northwestern National only about 40 women served on the boards of Fortune 500 companies, she recalled. According to Catalyst for Women, a New York based nonprofit research and advisory organization working to advance women in business, in 2001, 12.4 percent of all directors at Fortune 500 companies were women. • "I don't think the progress has been as fast as it should be, but at least it's evolving in the right direction," Goldberg said. As of 2002, there were only six female CEOs at Fortune 500 Companies, Catalyst found. Five out of 50 Goldberg is one of five women on The Business Journal's list of the 50 Hardestworking Board Members at Minnesota public companies. While 10 percent seems small, it is considerably higher than the percentage of women serving as CEOs at Minnesota public companies. In fact, according to our Top 100 Public Companies list, only four of the CEOs at the state's largest public companies are women. Goldberg ranks 12th on the board members list. She sits on the boards of four Minnesota public companies: Communication Systems Inc. and Hector Communications Corp., both of Hector;Hormel Foods Corp. in Austin; and TCF Financial Corp. in Wayzata. She also is the first American to serve on the supervisory board for the ING Group in The Netherlands. She was the first woman to ever sit on the board of Northwestern National, TCF and Communications Systems. Goldberg also has been a director at Personnel Decisions International in Minneapolis and NRG Energy Inc. in Minneapolis, among other companies, as well as at a number of nonprofits. She was the first woman to sit on many of those boards as well. Like Goldberg,the other four women on the Hardest-working Board Members list cite personal and 0 professional development as motivation for their board involvement. "I often ask myself why I sit on three boards when I have a CEO job that is extremely timeconsuming," said http://twincities.bizjournals.com/twincities/stories/2003/09/22/focus6.htrrll?t=printable 9/22/2003 ' Women increase presence on state, national boards - 2003-09-22 - The Business Journal (... Page 2 of 3 Linda Hall Whitman, CEO of QuickMedx in Minneapolis. "But every time I come back from a board meeting, I come back with new ideas for my business. It's a wonderful opportunity to continue to grow in my business • knowledge." Whitman is the 35th hardest-working director, according to Business Journal research. For the past eight years she has served on the board of MTS Systems Corp. in Eden Prairie. She also is a director at Health Fitness Corp. and August Technology Corp., both in Bloomington; she is the only female director at both companies. Despite having to commute to her Minnesota board meetings from Denver, Barbara Grogan, chair and president of Western Industrial Contractors Inc., said her board involvement is well worth the time. "It's been an extraordinary opportunity to be involved with these companies during a time when all companies have had to cope with significant challenges," said Grogan, who ranked ninth on the 50 Hardestworking Board Members list. Grogan sits on the boards of Apogee Enterprises Inc. in Bloomington, Deluxe Corp. in Shoreview and Pentair Inc. in Roseville. She became involved with Twin Cities companies through her position as chair of the Federal Reserve Bank in Denver. The chair of the Minneapolis branch sat on the board of Deluxe and when a director position opened, he recommended Grogan for the position. Making a difference The hardworking women directors said in addition to what they have gained by serving on corporate boards, they, like Goldberg, felt they were advancing the cause of women who want a larger role in corporate America. • "I always felt that because I was a woman and there were very few of us, I had better do a good job," Goldberg said. "If not, they are likely to conclude that all women make bad directors. Therefore, I will spoil the opportunity for future women. I don't think that's a burden men carry around." *, Marti Morfitt, CEO of CNS Inc. in Eden Prairie, agreed: "If you talk to those of us who are old enough,you'll find that many or us were the first women to 'fill-in-the-blank.' In those cases, you do feel a certain amount of opportunity and responsibility to clear the path for others." Morfitt raed 42nd out of the 50 Hardest-working Board Members. She's served on the board of Minneapolis. based Graco Inc. for the past eight years. She also serves on CNS'board and is a director at rip yately held SoftPac Industries Inc. in Elk River. She is the only woman serving on both the boards of Gracoand S. Janet Dolan, CEO of Tennant Co. in Golden Valley, rounds out the female members of the top 50 directors list at No. 16. In addition to serving on the board of her own company, Dolan has served on the board of Bloomington-based Donaldson Co. Inc. for seven years and The St.Paul Cos. Inc. in St. Paul for two years. Chipping away at the glass ceiling The reasons for the steady increase in the number of female board members are many. First and foremost, boards are limiting the number of boards their own CEOs can serve on. Some CEOs are not allowed to sit on any boards but their own. This creates a need for a new pool of eligible candidates. "Logically, that opens the door to more women and to people of color," said Whitman of QuickMedx. This makes all the more sense when one considers the strides women have made among leadership positions in http://twincities.bizjournals.com/twincities/stories/2003/09/22/focus6.html?t=printable 9/22/2003 • Women increase presence on state, national boards - 2003-09-22 - The Business Journal (... Page 3 of 3 companies, said John Stout, an officer and shareholder at Minneapolis-based Fredrikson&Byron and the president of the National Association of Corporate Directors (NACD)Minnesota Chapter. • "While women may not have the representation that you would expect in the CEO ranks, they are clearly gaining representation in the senior executive ranks,"he said. "Because CEOs are serving on fewer and fewer boards ... boards and search committees ... are starting to look in these ranks,too." The increase also may be proportionate to the increase in women investors, said Paul Conley, a principal with Towers Perrin, a New York-based management consulting firm. Conley cites an April 9 NACD article that found that women make up 47 percent of all U.S. investors, purchase 81 percent of all goods and services in the United States and own 38 percent of all U.S. firms. "Boards of directors exist to represent the interests of shareholders," Conley said. "When you look at 47 percent of investors being women, you understand why it is important that they serve on boards." Sarbanes-Oxley, a federal law passed last year that governs corporate disclosure, requires at least one financial expert to serve on each public company board, said Dolan. According to the April 2003 NACD article,women account for 52.1 percent of all financial managers and 58.8 percent of all auditors and accountants. "Coming up through the finance track is where women have had more success than coming up through some other tracks," Dolan said. More can be done While the number of women serving on corporate boards certainly has increased, the numbers are not quite what they need to be. • "We're 51 percent of the population, but are we 51 percent of the CEOs or board members?" Grogan asked. The answer is a resounding no, but there are efforts to change that. Female directors, including Moffitt, said they themselves are trying to encourage diversity on the boards where they serve. "[At Graco] we are always trying to build and put forward great candidates of diverse gender and race," she said. "I'm also looking to build an increasingly diverse board at my company." The Minnesota NACD chapter is working on a list of women and people of color eligible for board service to be distributed to Minnesota public and private companies. ngarrison@bizjournals.corn1 (612) 288-2112 ©2003 American City Business Journals Inc. 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