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The Honolulu Advertiser

Posted on: Sunday, July 25, 2004

Is shortage of talent result of gender bias?

By Bruce Meyerson
Associated Press

NEW YORK — "There's a shortage of qualified candidates." It's been an all-purpose argument for opponents to so many changes adopted or proposed in the backlash to corporate scandal:

• That's why the push for more independent directors on corporate boards is misguided.

• That's why the new standards for what qualifies as independent are too stringent.

• That's why top executives need to be paid so much.

• That's why it's OK to let the same person be CEO and chairman.

• That's why the new rule requiring an independent chairman on all mutual fund boards is off base.

By some accounts, the "existing" pool of qualified candidates may even dwindle as executives decide that the legal risks and time commitment of board service are too onerous or simply not worth the trouble.

So maybe it's time for companies and executive search firms to expand the pool of qualified candidates to include all qualified candidates, rather than the usual suspects.

Among 1,300 of the nation's biggest public companies, women hold 10 percent of the board seats and minorities account for 9.5 percent of the seats, according to a new tally by the Investor Responsibility Research Center based on the latest filings with the Securities and Exchange Commission.

Similarly, only about 8 percent of the top offices — posts including CEO, president, chief financial officer, chief operating officer, chairman, vice chairman — are held by women at the companies in the Fortune 500, according to Catalyst, an advocacy group for female executives. Overall, only eight of the 500 CEOs are female.

Viewed against such numbers, any complaints about a shortage of qualified executives shine a light back on the stubbornly insular nature of the corporate establishment. And if the members of this club look beyond their traditional ranks, they'll find legions of new talent ready to help companies work their way through new regulatory burdens.