There is a woman sitting in only one of every 10 chairs at the boardroom tables and executive desks of California's 200 largest publicly traded companies, and that means a missed opportunity for business, according to a groundbreaking study released today (Feb. 9) by the University of California, Davis.

In the first study of its kind to take a critical look at the participation of women in corporate leadership in California, researchers from the Graduate School of Management found women hold only 10.2 percent of the combined board seats and highest-paid executive officer positions. Specifically, they occupy only 202 seats, or 11.4 percent, of the 1,771 board seats and, at 8.2 percent, an even smaller proportion of the 1,006 executive slots.

Importantly, the report comes as corporate leadership is being held to a higher level of accountability, and the study's authors say greater representation of women makes good business sense.

"We believe that bringing more women into the boardroom and the executive ranks will lead to stronger relationships with customers and shareholders and result in more diverse and profitable businesses," the authors wrote.

"The 2005 UC Davis Study of California Women Business Leaders" was prepared by Nicole Woolsey Biggart, dean of the management school, and professors Kim Elsbach and Katrina Ellis. The school released the results at a gathering of business leaders and elected officials in downtown Sacramento.

State Sen. Jackie Speier, D-San Francisco/San Mateo, said that the study sets a new benchmark for advancing both women and California business itself. "This report lets the CEOs of the world know that women are business leaders in California -- they are not only up to the task, they set the task," said the outspoken advocate for women's issues and women in business.

"A diversity of thought and experience in leadership is good business strategy," added Virginia Hinshaw, provost and executive vice chancellor at UC Davis. "We need to encourage companies to tap into all that women can bring to the table."

Role models

The study identified 25 companies that have more than 20 percent women directors and executive officers. The study's authors said the 25 can serve as role models for more fully utilizing the talents and skills of women, and the management school recognized those companies with awards at today's event. Topping the list is Golden West Financial Corp. of Oakland, a holding company in the financial services sector with seven women in 14 board and executive positions.

The researchers used Standard & Poor's data to identify the top 200 companies headquartered in California by net revenue for fiscal year-end reporting from June 2003 through May 2004. Then they compiled information about directors and the top five executives from the companies' filings with the Securities and Exchange Commission, including proxy statements and annual reports.

The study found 55 companies, or more than 25 percent of the top 200, have no women board members and no women executive officers. In the boardroom, 34 percent of the top 200 companies have no women, and nearly 38 percent have only one woman director.

In addition, nearly 68 percent of the companies have no woman among their top five executives, and only 8 percent have two or more women in those positions. Women are chief executive officers of only six of the companies.

Comparison to other regions

A comparison to similar studies for seven other states and cities showed California ranks second to Chicago in the percentage of board seats held by women and sixth in the percentage of women executives, ahead of only Florida and Michigan.

"As the epicenter of innovation, the eighth largest economy in the world in its own right, and a trailblazer in social trends, California should be on the forefront of women's leadership in the corporate arena," the authors wrote. "The truth is, it is not."

By industry and size

In conducting their census, the researchers found that industry sector makes a difference. For example, the health care sector -- at 16.1 percent -- has the highest percentage of women directors, and the financial sector ranks second with 15.6 percent. The semiconductor industry has the lowest percentage of women directors with 5.5 percent.

Retail has the highest percentage of women executive officers, at 15.1 percent, and health care follows at 14.8 percent. The consumer goods sector has no women executive officers.

Company size also matters. Larger companies have a greater number and greater proportion of women board members than do smaller companies. More than 90 percent of companies with annual revenues of $5 billion or more have at least one woman director, and companies with annual revenues less than $750 million have the greatest percentage of women executives.

Good business sense

The authors said that having women well represented in corporate leadership is more than playing fair -- it makes good business sense.

"California companies aren't taking advantage of the opportunities to use the talents and unique perspective of half of our population," Biggart said. "It's a missed opportunity."

Ellis, an assistant professor of finance, pointed to two recent studies that show businesses do better when women share in the key leadership positions. In a 2004 study, Catalyst, a nonprofit organization working to advance women in business, found a connection between gender diversity and strong financial performance and good corporate governance. In other research, published in The Financial Review in 2003, three researchers from Oklahoma State University found that board diversity is related to higher shareholder value.

Corporate governance under scrutiny

The report comes as a recent wave of American business scandals has put corporate governance under increased scrutiny. "At a time when public companies are suffering from lapses in corporate governance and failures in leadership," the researchers wrote, "they cannot afford to ignore the talent and perspective available in half the population and close to half the work force."

Biggart, a professor of organizational behavior who studies economic networks, said government reforms, including the 2002 Sarbanes-Oxley Act, are compelling businesses to include external directors who are independent and who add to the diversity of perspectives on their boards. "It's critical and it's good policy," she said. "Business is just too important an institution."

Leading the way

The researchers say the study will be conducted annually to measure how women's roles in corporate governance and executive leadership change over time.

Elsbach is a professor who studies leadership and organizational behavior and is director of executive education for the management school. She said the top 25 companies offer examples to follow for including women in leadership. "The good news is that we have some role models for what a company can do in attracting and mentoring women in leadership," she said.

Among the companies receiving special recognition, Golden West Financial stands out as the only company with women equally represented in the boardroom and executive suites. Four other companies have more than 35 percent women directors and executive officers, and the report highlights them for their commitment to placing women into key leadership roles: Hot Topic, City of Industry; Westaff, Walnut Creek; Gymboree, San Francisco; and Providian Financial Corp. (since acquired by Washington Mutual Bank), San Francisco.

Among the other 20 are: Autodesk, San Rafael; Calpine Corp., San Jose; Cost Plus, Oakland; Jack in the Box, San Diego; Knight Ridder, San Jose; McKesson Corp., San Francisco; Wells Fargo & Co., San Francisco; WFS Financial, Irvine; the Gap, San Francisco; Advanced Medical Optics, Santa Ana; Guess, Los Angeles; Hewlett Packard, Palo Alto; Molina Healthcare, Long Beach; Restoration Hardware, Corte Madera; Ross Stores, Pleasanton; Sharper Image, San Francisco; Catellus Development (since acquired by ProLogis), San Francisco; Davita, El Segundo; Safeway, Pleasanton; and Williams Sonoma, San Francisco.

The complete report is available at http://www.gsm.ucdavis.edu/census.

About the Graduate School of Management

The UC Davis Graduate School of Management provides management education to nearly 400 students enrolled in full-time and working professional programs offered in Davis, Sacramento and the San Francisco Bay Area. The school also offers an undergraduate minor in technology management and a program in which doctoral students in the sciences and engineering work with MBA students to develop skills for commercializing research. Celebrating its 25th anniversary, the school has been ranked among the nation's top 50 MBA programs for 10 consecutive years.