In 2007 Water Utilities stepped up to become fully participating members of the California Utility Diversity Council and now provides financial support on a level equal to that of other utility segments that are far large. Water has also stepped up in the area of philanthropy, committing $75,000 over the next three years to the pipeline project Parent Institute for Quality Education. 

France A. Cardova Joins Edison International And

Southern California Edison's Board Of Directors

   May 20, 2004 - Edison International (NYSE: EIX) and Southern California Edison today announced that France A. Cardova, Chancellor of the University of California, Riverside, has joined the board of directors of each company.

     John Bryson, chairman of Edison International and Southern California Edison, stated, "We are very delighted to welcome France Cardova.  She will bring valuable experience, excellent judgment, and demonstrated leadership to our boards."

     Chancellor Cardova, age 56, has served as the seventh chancellor of the University of California, Riverside since July 2002.  Prior to joining UC Riverside, Cardova, a nationally recognized astrophysicist, served as professor of physics and vice chancellor for research at UC Santa Barbara.

     Before joining UC Santa Barbara in 1968 she was chief scientist at NASA from 1993 to 1996, serving as the principal interface between NASA headquarters and the broader scientific community.  Cardova headed the department of astronomy and astrophysics at Pennsylvania State University from 1989 to 1993 and served as deputy group leader of the Space and Astronomy and Astrophysics Group at the Los Alamos National Laboratory from 1979 to 1989.

     Cardova received her B.A. degree in English from Stanford University and her Ph.D. in Physics from the California Institute of Technology.  An expert in multiwavelength observational astronomy and space instrumentation, Cardova is the author of more than 140 scientific papers and is the winner of NASA's highest honor, the Distinguished Service Medal.  She was recognized as a 2000 Kilby Laureate, a prestigious award honoring an individual for contributions to society through science, technology, innovation, invention and education, which was named for the internationally acclaimed inventor of the integrated circuit, Nobel Laureate, Jack St. Clair Kilby.

     Cardova lives in Riverside, California with her husband and family.

Corporate Governance (A Special Report)

Casting a Wider Net: Diversity in the boardroom is gaining

as a way to improve governance -- and business decisions

By Andrew Blackman
21 June 2004
The Wall Street Journal
(Copyright (c) 2004, Dow Jones & Company, Inc.)


FOR YEARS, corporate watchdogs have pushed the idea that corporate boards should be more diverse because it was the right thing to do and because it was good for business. But lately, the idea is getting a fresh impetus from efforts to improve corporate governance.

The idea is simple: The more homogeneous a corporate board is, the more likely its members will move in lock step -- and the less likely they will be to challenge management. Directors from different backgrounds, in terms of profession, industry, gender and race, are more likely to ask probing questions than are a CEO's friends and professional peers.

"Diversity is increasingly important at the board level," says Virginia Clarke, leader of the diversity practice at executive-search firm Spencer Stuart in Chicago. "Exclusivity and homogeneity breed problems; we've seen that."

In terms of race and gender, certainly, progress is still limited. A 2003 study by the Investor Responsibility Research Center found that women held 14% of directorships at companies in the Standard & Poor's 500-stock index, up from 12% in 1999; minorities held 12%, up from 9% in 1999. Efforts in other countries are even further behind. Ethical Investment Research Services, based in the U.K., found that fewer than 7% of European and 0.4% of Japanese company directors are women.

"Board members tend to recruit other board members from their networks," says Karen Stinson, co-founder of Minneapolis-based ProGroup, a diversity consulting firm. "That's either their social network or from other boards they've been on. It's kind of comfortable to have people they know and trust, like-thinking people. That's why it keeps being a bunch of white males." While companies are diversifying their work force and even their management, Ms. Stinson says, "The final frontier seems to be the boardroom."

For that reason, some institutional investors are pressuring companies to diversify their boards. The state of Connecticut launched a "board diversity initiative" in 2002 using as its instrument of change the $20 billion in assets in the Connecticut Retirement Plans and Trust Funds. Fund officials push for diversity through dialog with the companies in which they invest, shareholder resolutions and proxy votes.

"My first priority as treasurer is the bottom line," says Connecticut State Treasurer Denise Nappier. Greater diversity leads to better corporate governance, which is good for Connecticut's investments, she says. "I regard diversity as key to the functioning of an effective board. In a complex global market, you need to pick from the largest pool of talent available to you," says Ms. Nappier, who is African-American. "There's a growing body of knowledge showing that diversity affects the bottom line."

To be sure, the exact impact can be hard to pin down. "The problem with measuring the bottom-line impact of boardroom diversity is that nothing happens in a vacuum," says Luke Visconti, co-founder of DiversityInc Media LLC, a publisher and consultant on diversity issues in New Brunswick, N.J. Nevertheless, Mr. Visconti firmly believes that there are strong business reasons for diversifying the board of directors beyond improving governance.

For starters, Mr. Visconti cites data tracking the growth of minority purchasing power compiled by the Selig Center at University of Georgia's school of business. In 1990, according to the center's research, the purchasing power of blacks, Asians and Native Americans accounted for 10.7% of the total. In 2003 their share grew to 13.1%, and it's expected to hit 14.3% by 2008. The corresponding figures for Hispanics, respectively: 5.2%, 7.9% and 9.6%. Companies that figure out how to market effectively to
diverse consumer groups will have a strong competitive advantage, Mr. Visconti says, and highly diverse directors can ensure that management is aware of and pursues these opportunities.

Conversely, a homogeneous board can be slower to recognize potential problems that may arise regarding other ethnic or minority groups, or even cause problems. "By having a diverse board, you're going to make fewer bad decisions," Mr. Visconti says. "You're going to get not only a capable board member, but someone who can navigate between cultures."

Few companies have stumbled as badly on matters of race -- or worked as hard to fix the problems -- as Denny's Corp., which in 1993 was hit with a series of lawsuits filed by black customers who claimed they were being denied service at Denny's restaurants because they were black. The Spartanburg, S.C.-based chain ended up paying a total of some $54 million to settle the suits, but the actual cost of the controversy was far greater. The company's image was tarnished for years, many minority customers stayed away and sales plunged. In 1996, Denny's estimated it was losing $100 million a year in sales by failing to attract black customers.

By then Denny's was already working hard to win back customers by introducing racial diversity at every level of the company -- from the board and senior management to corporate employees and franchise owners. One of the first steps was the 1993 appointment of the board's first African-American and woman: Vera King Farris, a former president of Richard Stockton College in Pomona, N.J. Up until then, the board had consisted of eight white men and one Asian-American man.

Ms. Farris, who is still a director at Denny's, says the board at that time was made up of decent people who simply were not aware of certain things -- like the problems that led to the discrimination suits. To win over alienated customers, she says, Denny's needed a "critical mass" of minorities in top management and throughout the company to demonstrate that it was truly committed to diversity and not simply making surface changes. Indeed, other minority directors soon followed Ms. Farris, and thanks in part to a training program started by her, minorities began to fill key management positions as well, including Rachelle Hood, who in 1995 became the company's diversity officer.

Today more than half of the seven board members at Denny's are minorities or women; 49% of managers are women and 29% are racial minorities; and 45% of Denny's franchises are owned by minorities -- compared with only one in 1993. In 2000, Denny's was ranked No. 1 on Fortune magazine's list of "50 Best Companies for Minorities," and last year it won third place. Meanwhile, the NAACP has honored the company with awards, and black customers are returning, too.

In explaining just how much the company has benefited from a diverse board, former Denny's CEO James Adamson says that the contributions of Ms. Farris, for one, went beyond her simply being an African-American or a woman. "Much more important than diversity of race or religion or background is diversity of ideas," Mr. Adamson says. Thanks to her background in education, he says, Ms. Farris was always asking "what I was doing for the staff, what training I was giving them, making sure I understood that all we were as a company was based on our people."

Mr. Adamson also recalls the time Raul Tapia, the only Hispanic member of Denny's board, raised a question concerning a major marketing plan being prepared for the company's El Pollo Loco chicken restaurants about five years ago. The advertisements were presented to the board, most of whom approved. But Mr. Tapia asked why the ads featured only white meat. The reason was that most consumers prefer white meat, he was told. But Mr. Tapia pointed out that most Hispanic consumers prefer dark meat, and that El Pollo Loco, which was founded in Mexico and offers many Mexican dishes, depended heavily on Hispanic customers. The ad campaign was swiftly modified to emphasize dark meat instead.

Nelson Marchioli, who succeeded Mr. Adamson as CEO in 2001, agrees that having a diverse board has been good for business at Denny's. A diverse board "provides a richness and a quality of information that you just don't have if everyone is of like mind," he says.

Pushing board diversity beyond race and gender, Denny's has recruited financial experts and professionals from other backgrounds as well. The company in 2003 recruited Vada Hill, a senior vice president at Fannie Mae, and Debra Smithart-Oglesby, a former chief financial officer who sits on the editorial advisory board of CFO Magazine.

Elsewhere, some directors who sit on several boards are starting to limit the number of companies they join, as the focus on good corporate governance makes them more aware of the time commitment and potential risks of serving on a board. "The stereotypical 63-year-old recently retired CEO is already on five boards," says Kerry Moynihan, a managing partner at executive search firm Christian and Timbers in Tysons Corner, VA. "He doesn't want to take on a sixth." All of this helps to broaden the pool of talent from which boards are selecting new directors.

Mr. Adamson, for one, hopes that growing diversity will help other companies learn from Denny's example. He says it shouldn't have taken a crisis of such magnitude to convince him and others at Denny's of the need to be more inclusive. "I didn't get to this point of view on what diversity can provide naturally," he says. "I wish I had. I was forced by the situation Denny's was in.

"But what I found in the end," says Mr. Adamson, "was that a diverse board helped us to have a much more finely run company, to be more intelligent about our decisions, and to be better attuned to the needs of our customers."

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Mr. Blackman is a staff reporter for The Wall Street Journal in South Brunswick, NJ. He can be reached at andrew.blackman@wsj.com.