Warren Buffett let me down.
The longtime Berkshire Hathaway CEO, regarded as one of the savviest investors around,
could have made big headlines recently by challenging the dearth of women as directors
on public company boards.
As it was, his highly anticipated annual letter to shareholders, released late last month,
mentioned the under-representation only in passing: “This year, it should be noted, marks
the 100th anniversary of the 19th Amendment, which guaranteed American women the
right to have their voices heard in a voting booth. Their attaining similar status in a board
room remains a work in progress.”
C’mon, Warren, you can do better than that.
A few days later, in an appearance on the cable business network CNBC, Buffett was
pressed for his view on mechanisms now being used to add women to boards – a law in
California mandating they be allocated a certain number of seats; a pledge by investment
bank Goldman Sachs that companies it helps take public will have at least one female
board member.
But Buffett disappointed again, dancing around the question. He indicated there could be
a shareholder proposal that “relates to this” put before Berkshire Hathaway’s annual
meeting in May, but was not more specific. “I want directors that represent the
shareholders,” he stated.
That’s admirable, of course. But women still comprise less than a quarter of public
company directors, according to Him For Her, a group focused on adding women to
boards. Its way of doing so is unique: organizing “curated” dinners hosted by well-known
CEOs, to which “board-ready” women are invited.
Never mind that gender-balanced boards can also help the bottom line.
According to the Credit Suisse Research Institute, a “material correlation” exists between
companies with a higher participation by women in decision-making roles – on the board
and in management – and stock market and corporate performance.
Around the globe, more than a dozen countries are requiring or urging public companies
to give women a seat at the board table. California became the first state to do so,
mandating that public companies headquartered there have at least one woman on the
board by the end of 2019 and as many as three by next year.
While neighboring Massachusetts is pondering similar legislation, I couldn’t find any
pending bills in New York specifically aimed at gender balance on public company
boards.
So Buffett saying more could have gone a long way.
In his letter, Buffett cited as his “credentials” for talking about corporate governance his
service on 21 public company boards over the past 62 years. (Buffett is 89.) And because
he had a “substantial holding of stock” in most of the companies on whose boards he sat,
he noted that “in a few cases, I have tried to implement important change.”
This should one of those times, too, Mr. Buffett.
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her
own and not necessarily the newspaper’s. Reach her at [email protected]
