Maria Contreras-Sweet, who led the U.S. Small Business Administration under President Obama, has submitted a bid to acquire the Weinstein Co., the embattled film studio grappling with multiple allegations of sexual harassment or assault against its former co-chairman, Harvey Weinstein. It includes a group of investors with female leaders from private equity, venture capital and Hollywood, according to a source familiar with the deal. It proposes retaining the company’s employees and has the blessing of lawyer Gloria Allred, who is representing some of Weinstein’s accusers.
But one aspect of the bid is getting the most attention: Its proposal to install a majority-female board of directors, with Contreras-Sweet as chairman.
“I believe we have now reached a crossroads where it is imperative that a woman-led board acquire control of the company and create content that continues to inspire audiences around the world, especially our young girls and boys,” Contreras-Sweet wrote in her proposal letter. Women, she wrote, would be “significant investors in the new company and control its voting stock.”
If the bid is successful, it would represent a major overhaul for an all-male board that has faced multiple resignations and questions regarding what was known about the allegations. (As part of a statement published in media reports in October, the board called the allegations an “utter surprise;” a spokesman for the Weinstein Co. declined to comment on Contreras-Sweet’s bid. Weinstein has apologized for some of his behavior; in a separate statement, a spokesperson said that “any allegations of non-consensual sex are unequivocally denied by Mr. Weinstein.”)
And, advisers and researchers on women in leadership say, packing the board with women could send a big signal from the new owners about what will change. ‘The company has to do something to signal that it is changing in a fundamental way,” said Marianne Cooper, a sociologist at the Clayman Institute for Gender Research at Stanford University. “It would take something on the order of a complete cleaning of house, and putting more diversity in key powerful roles. Starting with the board is not a bad place to start.”
That’s partly because, some researchers argue, having more women in leadership roles is a better answer to solving sexual harassment problems than installing more training programs or anti-harassment policies. Research has shown that having male-dominated management teams can lead to the tolerance of a sexualized environment, said Alexandra Kalev, a professor at Tel Aviv University and the co-author of a recent Harvard Business Review article on the topic. “Having more women in management increases the share of women who can work to promote women and create a working environment that allows women to flourish,” she said.
Moreover, Kalev said, having more than just one or two token women on the board is important for female board members’ contributions to be heard and for them to not be viewed as outsiders who represent a woman’s point of view. She said research has shown that companies are actually more likely to adopt a diversity program when they have no women on the board than when 5 percent of the board is women. Having a single woman makes boards feel as though they’ve taken some action, and they “feel less of an urge to adopt programs that increase diversity.”
It’s not until they get to 15 or 20 percent of directors that they start to make a difference, Kalev said. “They’re not seen as representing their gender anymore, but representing the board,” she said. “It mainstreams women in positions of power.”
Frequently cited research from 2006, based on interviews with female directors, also found that it seems to take at least three women for them to create “a critical mass where women are no longer seen as outsiders” and can influence decision-making.
At many companies, women on boards are still absent or in the distinct minority. Only 21 percent of directors at companies in the S&P 500 are women, according to research from Catalyst. More than 600 companies in the Russell 3000 still have no female directors. Just 27 companies in the Russell 3000 have reached “gender parity,” with at least half of directors being women, or have majority-female boards, according to data from Equilar.
More boards are giving sexual harassment, discrimination and broader cultural issues more weight, particularly in recent months as a wave of allegations have surfaced, said Brande Stellings, who leads advisory services for Catalyst, a research and consulting organization focused on women in leadership.
“We now see very squarely that issues of sexual harassment and gender discrimination are investor issues, and really are board issues,” she said. “All of that is up for play in a way that feels quite different than it did just a few months ago. It feels like a watershed moment in terms of having conversations [on these issues] at the level of the board.” (Stellings is a member of the newly named Fox News Workplace Professionalism and Inclusion Council, which will serve as an oversight panel and provide written reports to directors at 21st Century Fox, which also has grappled with sexual harassment allegations.)
Researchers cautioned, however, that boards need both men and women of different racial and ethnic backgrounds to be diverse, and that putting a majority-female board in place is only a first step, particularly at a company facing as big a crisis as the Weinstein Co.
“It’s a perfectly reasonable place to start and it does signal that massive changing is on the horizon but you have to move from the board to inside the organization and make sure the board holds the leaders accountable,” Cooper said.
If successful, Contreras-Sweet, who was not available to answer questions, would be executive chairman, taking on management responsibilities. And her background suggests a leader who would be attuned to diversity issues: She founded ProAmerica Bank, which focused on serving small- and medium-size businesses in the Latino community, and served as a U.S. Senate appointee on the Federal Glass Ceiling Commission in the 1990s.
Although it may be encouraging for those who research or advise on board diversity to hear about another majority-female board, some noted the irony that it was the part of the bid getting the most attention. Said Sukhinder Singh Cassidy, a former Google executive who founded the BoardList, which manages a directory of female board members: “Nobody comments on a majority-male board.”