Women currently make up more than 50 percent of the workforce and many have served in critical operational positions for years during their career ascendancy. With the looming retirement of more traditional white male board members, how many women who have earned their stripes will take the baton?

Frequently referenced studies showing that companies with women board members have generally performed better than those with all-male boards, which has led to an increased drive to recognize women of ability as potential or current board member candidates.

The search starts with the C-suite women executives. The higher their profile, the more they’re sought after. But to achieve a critical mass of capable female leaders going forward, the search has to go to the next layer – the up-and-comers.

Julieanne Thurlow, president and CEO of Reading Co-Operative Bank since 2006, said it’s necessary to “get through the corporate shell” to find them. As for the C-suite candidates, she said one recent recruit to the bank’s board had since approached by two other banks. “We’re all chasing after the same person,” she said. The bank’s 11-member board of directors includes four women.

Looking Beyond The Numbers

Arthur F. Warren, principal of Arthur Warren Assoc. (and no relation to family ownership of The Warren Group, publisher of Banker & Tradesman) noted that of the banks he serves as consultant on board membership and compensation issues, the better run banks have the highest percentage of females in board seats, as measured by return on assets, return on equity, efficiency, net income and the lowest incident of loan losses. From 2000 to 2002, 9 percent of board seats in top performing banks for which he consults were held by women; now it’s 22 percent.

That smaller number of board seats results in Warren’s caveat that while percentages of female board members may be higher, it’s because the number of board seats has shrunk, often due to an increasing number of non-stock banks considering merging due to regulatory costs.

But shrinking boards aren’t necessarily a bad thing. Research papers often set an ideal board size as eight to 12 members, with a concomitant reduction in the number of committees, which has shrunk by more than half, to five.

Warren also said the number of female bank CEOs “has gone up dramatically” and women leaders in other industries are also in high demand as board members. He’s now seeing an increasing number of women being interviewed for board positions, “and because boards are smaller, their input and value is even greater.”

Additionally, the professional designations of board members has diversified from the predominance of lawyers to other specialties such as engineers, psychologists and CPAs. Federal regulators want more oversight and different attitudes and skills, to ensure that policy settings and risks can be managed over a broader experience spectrum. Board fees are also increasing to attract more talent.

Robert Rivers, president and COO of Eastern Bank, confirmed the value of attorneys as board members because of their connection to their business clients. But increasingly, the bank seeks candidates with experience in fields in which its leadership feels it needs to get stronger; not only technology, but also higher education and financial services, which he describes as “the most ripe for disruption.”

The next management level down, he said, is more diverse but likely to be less visible to recruitment.

Mark Rogers, president, CEO and founder of Board Prospects, confirmed that publicly-traded companies are increasingly seeking industry expertise in new board recruits. While more boardroom diversity translates into better results, low turnover on corporate boards due to a lack of term limits constitutes a problem for those boards with no age limits for board members, he said.

Rogers also advises board candidates to understand what’s required on their end – how many meetings, how much preparation time – particularly for public companies. “Some find they don’t have the time or resources,” he said.

Our Customers, Ourselves

Warren said the board membership of community banks increasingly reflects the gender and ethnic makeup of banks’ customers. With an increasing number of loans being made to women and minorities, the demand is increasing for board members who understand the needs of the bank’s clientele. “It’s turning. It’s a dramatic improvement, but there’s [still] a lot of work to do,” he said.

Eastern Bank’s Rivers said changes in recruitment strategy don’t just happen. It’s human nature to affiliate with those with whom we’re most comfortable. But now that the bank has established certain professional criteria, it can devote more attention to recruiting women and minorities, reflecting not only its community but its business. “Unless you’re well-rounded and representative, you’re limiting yourself [in recruitment efforts],” he said.

Thurlow told B&T that female board members had been referred by their male peers, often through traditional collegial avenues such as golf. She also said that board members’ direct connection to their communities presents an advantage.

However, the bank is cautious in advising board candidates of the time commitments connected with board seats and fully disclosing to them the particulars of such specifics as, say, the number of evening meetings they’d be required to attend.

While women make up more than 50 percent of the workforce, there’s another number that sticks – Thurlow noted that 50 percent of men on boards are likely to have daughters.