Who's behind corporate America's next moves? Still largely men, as some of the industry's top female names — from Bonnie Hammer to Mellody Hobson to Shari Redstone — talk about how they got in, survive and thrive in the most exclusive power-soaked business of all.
This story first appeared in the Oct. 30 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
When Mellody Hobson sat with her six fellow DreamWorks Animation board members at a screening of the company's Megamind before it was released in October 2010, something struck her — and only her — immediately: There was no nonwhite character in the film other than an alien, and he was blue.
Hobson, who had joined the DWA board in 2004 and became its chairman in October 2012, spoke up in front of the group. "I said, 'Where are the people of color?' This was set in a major city in the United States. I said, 'How can this be?' " DWA founder Jeffrey Katzenberg was so struck by her remarks that after Hobson had returned to her home in Chicago, he asked her to come back to Los Angeles. Over lunch at The Grill, he promised the company never again would make such a mistake. Recalls Hobson, "He said, 'I just didn't see it.' That's the point, right?"
The point being that diversity on corporate boards brings fresh insights, as Hobson, 46, president of Ariel Investments, demonstrated. DWA's most recent movie, Home, also features an alien, but the main human character is a girl of color, voiced by Rihanna. The film grossed $386 million worldwide, and Katzenberg received moving letters of appreciation from parents happy to see a nonwhite character taking a central role. The only woman and person of color on the board, Hobson "has been an invaluable advocate for diversity and representation among our employees, our leadership and in our movies themselves, and she does it in a graceful and gracious way," says Katzenberg. "Our audience is global and diverse. The people who make our product ought to be representative of who our audience is."
Over the past few decades, boardrooms, under pressure both from shareholders and public perception, have evolved and no longer are quite the cigar-chomping collection of gray-faced men one might see depicted in a New Yorker cartoon. Barry Diller, whose 13-member IAC board includes Chelsea Clinton and NBCUniversal Cable chairman Bonnie Hammer, says he has no doubt about the benefits of diverse perspectives. "You'd think it would have been obvious from the get-go," he says. "But boards have moved from being somewhat clubby in terms of atmospherics to being more of a professional body."
Still, despite heightened hand-wringing within entertainment on pay inequity (with an assist from Jennifer Lawrence), an EEOC inquiry into systemic discrimination, and the number of women in the executive suites and behind the cameras largely unchanged in recent years, boards — governing bodies that monitor a company's long-term strategy, exposure to risk and by default, a company's decision-making leadership — remain overwhelmingly male.
Within these boards, the ultimate expression of power and achievement in corporate America, women comprise 16 to 19 percent of about 50,000 seats at public companies in the U.S. (the percentage is far lower for women of color), according to nonprofit group Catalyst, which is dedicated to expanding opportunities for women in business. Hollywood falls squarely within this spectrum, with women filling only 17.6 percent of the seats on boards of companies (Comcast, Sony, Viacom, etc.) that own major studios.
Corporate boards still are a place where the elite not only meet but make connections that can lead to the exchange of favors and ideas. But breaking in is not so easy; according to the National Association of Corporate Directors, about 75 percent of invitations to serve on boards come through existing members. The balance is made up of candidates recruited by search firms, which might have a mandate to help diversify a board. When a name is submitted for a board seat, says Brande Stellings, Catalyst's vp corporate board services, "The question around the boardroom still is, 'Who knows this person?' "
Still, Barbara Franklin, who was secretary of commerce during the George H.W. Bush administration and has served on 14 public-company boards, says she has seen considerable change in the clout that women have on boards since the '80s. In those days, "I was the only woman," says Franklin, now 75. "That was not the most comfortable place to be. Now there are several women on all the boards I serve on."
At the same time, the responsibilities also have increased. "In the old days, management would say: 'Here's our strategy. Stand up and salute,' " says Franklin. Now "it tends to be a much more dynamic, collaborative effort on strategy." And she has seen women become heads of committees on governance, audit and compensation.
"This is not your father's Oldsmobile, as that commercial goes," says Hobson (wife of George Lucas). "This is a new day." There may be an old-boy network at work on some boards, she says, but not the ones she's on. "I was a person in Chicago," she says. "I didn't have cronies. This idea that I'm a golfing buddy of [someone]? I don't even golf."
Says Hammer about serving on the IAC board: “Barry Diller chooses people who aren’t afraid to talk. He expects people to voice their opinions — if necessary, loudly.”
Even as times change, former Disney Media co-chair Anne Sweeney was advised by friends to be wary about becoming a token when she was choosing which boards to join after she left the company in January. (Before that, Disney policy precluded her from serving on boards of other public companies.) "There were a lot of boards that approached me that clearly just wanted to get a woman fast," she says. When Netflix CEO Reed Hastings invited her to join his company's board, she asked him why. "He said, 'Because of the company you've been running and because of your track record.' I thought, 'That's the right reason.' " In March, Sweeney became one of three women on the nine-person Netflix board.
Shari Redstone was the only woman director when she joined the board of National Amusements, her father's theater chain and the holding company for Viacom, in 1992. She also was the only woman when she joined the Viacom board in 1994 (before Viacom and CBS split into two companies). It was daunting, and not only because of her gender and because her background was in law and not in business. "I had to prove myself because I was my father's daughter," she says. Without speaking specifically about Viacom or CBS, the 61-year-old Redstone adds: "I do think in many instances there's a higher standard for women. It may not be forced upon us, but we take it on ourselves."
Yet according to Catalyst's Stellings, studies have found a correlation between the presence of women on boards and enhanced financial performance: Companies with sustained high female representation (three or more women in at least four of five years) outperformed those with low representation by 84 percent on return on sales, 60 percent on return of invested capital and 46 percent in return on equity. "I strongly believe that a diverse group of people around a table leads to a better outcome, and all the data suggests that," says Hobson, who also serves on the boards of Starbucks and Estee Lauder.
"Women have an instinct for what the market is," says NBCU's Hammer, who serves on the board of eBay as well as IAC. "We have tremendous insight in terms of understanding products and consumerism." She adds that women who have been successful enough to be offered board seats are likely to have honed skills that make them valuable to any company. "You develop opinions because you have to, because these guys aren't going to respect you unless you're an equal, and you get to the point where you do have a voice because your feet have been on hot coals. Women who get there — their voices are strong and powerful," she says. Diller confirms that Hammer has just such a voice. "She's not shy, which means she's willing to engage," he says. "We're always seeking real engagement from our directors, which means debate, argument and passion."
Women who find their way onto boards of directors don't have one unified vision of the board's role. Sherry Lansing, the 71-year-old former chairman and CEO of Paramount Pictures and founder of The Sherry Lansing Foundation, has served on several boards including Qualcomm and the Dole Food Co. (and was cited by Redstone and Sweeney as a source of advice and inspiration). In her view, boards "should provide oversight, not interference." Redstone sees the board's job as not just oversight but looking toward the future: "You not only respond to issues that management is raising, but you take a look at the broader picture. You have to know what the issues are, going above and beyond the immediate agenda that you're presented with."
Hobson says her priority as a board member is to be a fiduciary for shareholders, monitoring a company's management and growth. "That is first and foremost in my mind every day," she says. "You are one person in a seat that embodies thousands or hundreds of thousands of shareholders." She says she comes to meetings well-prepared — generally, meetings are held quarterly — and her goal, if she poses a question, is for it to be thought-provoking and not obvious. "I purposely force myself in every meeting to have one unique idea," she says.
Board membership is paid: According to the NACD, compensation for members ranged from $145,000 a year at a small company to $258,000 a year for a top 200 corporation. (Members are given cash as well as stock, but Hobson admonishes that it is unacceptable to sell.) But most women invited to serve on boards already are so well off that the compensation isn't a motivation. As Lansing puts it: "People who serve on boards don't do it for the money." Instead she says being on a board offers a different vantage point on corporate life. While running Paramount, for example, Lansing was serving on the Los Angeles Times board in 2007 when the company was being sold to real estate tycoon Sam Zell. The board had to gather in secret after a Paramount premiere. Lansing told husband William Friedkin, "I have to go to a meeting at 10:30 p.m., and I can't tell you where. I'm not having an affair." Once the deal was done, she thought, "I'm usually the one who wakes up and sees who the new boss is and now I'm seeing it from the other side."
Sometimes boards review numbers; other times, there is drama. In recent years, Rupert Murdoch's board has had to cope with a hacking scandal that — combined with the weight of his publishing assets on the company's stock — led to the 2013 split of his conglomerate into News Corp and 21st Century Fox. In 2014, the board of Time Warner had to take quick measures to fend off an unwanted Murdoch bid. One of the most dramatic examples of directors being forced into action came in the wake of a stunning 2004 Disney shareholder uprising that led to Michael Eisner being stripped of his chairman of board title and, ultimately, his departure from the company.
All the women interviewed by THR have come to boards through different routes. Lansing says she was recruited by a search firm in every instance. Hobson was recruited by a headhunter for Starbucks, but for her first-ever position with the Chicago-based company Tellabs, the invitation came through an introduction by her boss John Rogers, the CEO of Ariel. "I remember being very surprised," says Hobson. Serving on a board was an ambition she thought would be fulfilled later in her career. As for her assets, "I was known to not be a shrinking violet" and already was an expert in finance, she says. "I had opinions, and I expressed them." She also acknowledges, "I obviously bring diversity."
In what may reflect differences of not only generation but background, Hobson and Redstone don't offer the same advice to those who want to try for board membership. To Hobson, the first rule is "do good work. It's not about networking," she says bluntly. "Cream rises to the top." But to Redstone, who says she has worked to include women on the boards of CBS and Viacom, networking is key (Linda Griego also sits on the CBS board, and Deborah Norville is among four women on the Viacom board). So is speaking up. "Let people know what it is that you want," she says. "In the right situations, you have to be really vocal." Vocal, maybe, but Hobson says it's a mistake to lobby directly for a board seat. "You don't ask — that's for sure," she says. "You have to be invited." Even when asked, says Hobson, don't appear overeager. When a recruiter approached her about being on the Starbucks board, she says, "I made it very clear that I wanted to be on the board, but I said, 'I'm young. Take the time you need.' "
“You want to be in a room with people you like, respect and admire, where you can add value, where you’re excited to be there,” says Hobson about board commitment. “I’m flying to Seattle four times a year [for Starbucks board meetings]. I’ve got to really want to be there.”
Franklin, the former commerce secretary, suggests maybe both approaches are right. Women should find ways to meet people who can open doors, for example, by serving on the board of a nonprofit that has other directors who might be valuable to know. But it may be best to express interest diplomatically. Consider how Hammer, 65, found her way onto the IAC board. She had known Diller since 1998, when he was running USA and she was vp current programming. Though their paths had diverged, she and Diller continued to meet for lunch. On one such occasion, Hammer told Diller she had been approached to serve on some boards and asked his advice on which to accept. That led straight to her seat on the IAC board.
Not every invitation to serve on a board should be accepted. Hammer says she chose to serve on the boards of both IAC and eBay in part because both exist in the digital space, which is relevant to her job and the television industry in general. (In the case of eBay, Hammer also admits: "I'm a chick. I like shopping.") As the television world grapples with disruption, she says, her service on boards gives her ideas even on technical issues, such as search functions. Hammer, Lansing and Hobson all agree that no one should accept an invitation to become a corporate director unless the company issuing the invitation is of genuine interest. Says Redstone: "Being on a board is not something you do because you have nothing better to do with your time. You really want to make sure you have the time to put in to understand what's going on with the company and the industry." According to the NACD, the average board member of a public company spent nearly 250 hours on board matters in the past year. Lansing, who now is running her own foundation, still feels it's not really possible to serve effectively on more than two or three boards at a time.
Aside from the workload, there is the risk of sitting on the board of a company as it hits a bump in the road or even winds up in a scandal. "You're talking about serious people whose reputations mean a lot to them," says Lansing. Hobson concurs, "Your name and reputation are on the line." When DWA went through difficult times, she says, "I felt as accountable as Jeffrey." When a Starbucks initiative to spark conversations about race in coffee shops post-Ferguson sparked unpleasant backlash, she says, that also was "painful," prompting her to ask herself, "What is the universe supposed to be teaching me?"
Henry Stoever, chief marketing officer of the NACD, believes the next few years could be a time of opportunity for women to boost their numbers on boards. "Over the last five to 10 years, boards have extended term limits and age limits to get them through the financial crisis," he says. "If your company's in crisis mode, you want to minimize churn, so what you saw over the last 10 years was a slowdown in board transition." (According to NACD data, about 50 percent of companies impose age limits, mostly at age 72 or older, while nearly 40 percent have no term-limiting mechanism at all.)
But Stoever's organization anticipates a boost in diversity in the boardroom over the next five years, and that will have to be achieved by looking beyond the usual criteria. "In the old days, the traditional source was, who is a public-company CEO?" he says. "There's not a ton of public-company female CEOs. But there are tons of presidents, vice presidents, general managers, CFOs. Think broadly, not narrowly. You need to expand the candidate profile."
Franklin, who formerly served as chairman of the NACD board, agrees that any company should have a nominating committee that can find good women candidates. If the company is using a headhunting firm that doesn't produce them, she adds, "Find another headhunting firm."