February 19, 2018
The Boardroom Gap: Gender diversity = profits

Boardroom Gap: Companies with more women in leadership perform better

Photo | Matt Wright
Select members of Fidelity Bank's executive team (from left, back row) Connie Loveland, chief financial officer; James Notaro, vice president of deposit operations; Lisa Krywucki, senior commercial credit officer; Edward Manzi, chairman & CEO; Dee Sendrowski, senior vice president and human resources director; Christopher McCarthy, president & COO; Sheila Julien, senior vice president for strategic capabilities; (from left, front row) Laurie Benson, senior vice president and head of retail; Derek Beahn, vice president for marketing; Jennifer Ledoux, senior compliance & risk officer; Barry Bliss, chief commercial banking officer; Jennifer Conrad, senior cash management officer.
Danna Greenberg
Susan Adams

Jennifer Conrad didn't have high expectations when she interviewed for a management position at the Leominster headquarters for Fidelity Bank. After all, she was seven-and-a-half-months pregnant.

"I felt like it was such a wasted effort," Conrad said. But "when I stepped out of the bank that day, I said, 'I need to be here.'"

She was hired. And a decade later, Conrad, Fidelity Bank's senior vice president and senior cash management officer, serves as an example of a company's culture prioritizing having women in executive positions in equal numbers as men.

"She was a very talented person and culturally aligned with how we treat our clients," said Ed Manzi, the Fidelity Bank CEO who hired Conrad and still leads the 10-branch bank. "It just seemed like the right thing to do."

With nine women among its top 16 executives, Fidelity Bank is an outlier in the Central Massachusetts business community, as only four of the 42 local for-profit companies examined by WBJ had at least 40 percent women among their senior executives and board members.

Fidelity Bank has seen its total deposits more than double in a decade to $659 million in 2016, and in the past year has grown through acquisitions of Barre Savings Bank and Colonial Co-operative Bank in Gardner.

This type of financial success is a common thread among businesses with greater gender diversity in their leadership.

Companies with women in at least 15 percent of senior management positions have 18-percent more profits than companies where women comprise less than 10 percent of those seats, according to a 2016 study by Swiss multinational financial institution Credit Suisse. The best performance was shown in companies where women make up half of senior leadership positions.

"You don't get a diverse lens of what's happening inside and outside your company" without diversity, said Susan Adams, a Bentley University professor who's conducted research for the women advocacy group The Boston Club.

"Women live different lives than men," Adams said. "They can see things differently."

Woman-led profits

Companies with women in the top leadership position (i.e. CEOs) were shown in the Credit Suisse study to perform better than those led by men, with 19-percent better profits.

Among the 75 Central Massachusetts business organizations – including nonprofits – studied by WBJ, only nine led led by a woman, and none of those were public companies.

One of the most recent female publiccompany CEOs in Central Massachusetts was Carol Meyrowitz, who led TJX Cos. from 2007 to 2016.

The Framingham- and Marlborough-based owner of retail chains Marshalls, T.J.Maxx and HomeGoods touts relatively high levels of women throughout the business. Globally, 77 percent of TJX's workforce is female, as are 51 percent of assistant vice presidents.

In the past three years, women at TJX have earned 51 percent of promotions into senior vice president roles, 40 percent of promotions into vice president roles, and 58 percent of promotions into assistant vice president roles.

"At the board level and throughout the TJX organization, women are an important part of our workforce and represent an increasing percentage of our leadership team," Meyrowitz said in a statement.

TJX has been a force in retail at a time when many of its competitors have struggled against big box stores and online retailers like Amazon. From the budget year Meyrowitz's CEO term began through the latest budget year, the company's profit rose 161 percent to $2.3 billion, sales jumped 69 percent to $30.9 billion, and the store count rose by 51 percent to more than 3,800.

Meyrowitz said achieving goals at the company "relies to a great degree on our ability to continuously develop our next generation of leaders."

Female CEOs = gender diversity

Female-led companies have been found to have better gender diversity throughout their ranks, according to a 2017 report by Chicago-based executive leadership consulting firm Spencer Stuart. At female-led American businesses, 33 percent of directors are female. At male-led firms, that rate is 22 percent.

In Central Massachusetts, out of the 75 institutions examined by WBJ, the nine led by women have better records of appointing women to boards and executive offices. Their rate for boards is 43 percent, compared to 33 percent among all the organizations examined. Among executives, the rate is 57 percent at female-led entities compared to 36 percent among all.

Female business leaders also help companies in intangible ways.

Los Angeles-based executive recruiting firm Korn Ferry found last year in talking to 57 women CEOs at large national companies, female CEOs are more likely than male CEOs to be motivated by a sense of purpose and a belief their company could have a positive effect on the community and its employees.

New York City-based investment research firm MSCI in a 2015 study found fewer instances of governance-related controversies such as cases of fraud and shareholder battles at companies with better gender diversity.

Manzi, Fidelity Bank's CEO since 1997, said gender equality has never explicitly been the bank's objective.

"We didn't target a number," he said, adding of the qualified candidates the bank has chosen, "it just so happens that a lot of them are women."

On one wall in a Fidelity Bank meeting room is a message illustrating the bank's priorities with employees: "If you value the differences in people, the differences will provide value."

Female-inclusive firms remain the exception

Of Central Massachusetts's 17 public companies, women make up only 8 percent of executive positions. Twelve of the 17 companies don't have a female senior executive, and half of those don't have a female board member.

"Biases and misconceptions continue to linger," said Danna Greenberg, a professor of organizational behavior at Babson College in Wellesley.

Female candidates generally need to push for themselves for consideration more than a man does, Greenberg said, and a woman who might be seen as pushy could cause a different reaction than a man would.

"Women need to figure out much earlier in their career how they balance that pushback from being a strong self-advocate," Greenberg said.

Women held fewer high-level positions decades ago because they were less likely to have college degrees, but that's changed.

Women make up a higher percentage of college graduates than ever, outnumbering men for the first time in 2014, according to the U.S. Census Bureau.

"They're very highly educated, which has changed," Adams said of female candidates for high-level jobs. "You couldn't say that 20 years ago. You probably couldn't even say that 15 years ago."

At Fidelity Bank, Conrad said she's seen an environment not typical in finance.

"In my 20 years in banking, I hate to use this term, but it can be seen as a boys' club," she said. "It's so refreshing to go to chamber events with more women representing companies. I'd like to see more. Who wouldn't?"

CORRECTION: This story has been changed to reflect that it was Fidelity Bank's deposits, not assets, that rose to $659 million.

Read the entire Boardroom Gap series

Feb. 5 edition

– WBJ's Findings: Women vastly underrepresented in Central Mass. corporate leadership

The Pay Gap: Central Mass. male executives make $1.3M vs. $573K for women

Editorial Opinion: The importance of diversity

– Letter from the Editor: Can't keep doing the same thing and expect different results

Feb. 19 edition

- Feeling Marginalized: Central Mass. businesswomen who've sat in positions of power say they don't get the same automatic credibility as men

Gender Diversity = Profits: Companies with a greater mix of women in leadership perform better

March 5 edition

Narrowing the Boardroom Gap: Financial, legislative and cultural pressures are creating more gender diverse business leadership

The Best Candidate Gets the Job: Diverse candidate pools lead to diverse companies, leading local firms say

Letter from the Editor: Now comes the hard part

Viewpoint Opinion: Women of color need to break the concrete ceiling

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