Yet the number of women on corporate boards still remains very low considering women’s long and successful track record in the workforce, the fact that they make up half the population and that diversity in the top ranks has been shown to be good for the bottom line.
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Today, women hold an average of 25% of board seats at S&P 500 companies, up from 15% a decade ago, according to data from BoardEx. Women now account for at least a third of the board seats at each of 122 companies on the index. Five years ago, that was only true at 40 companies.
Looking more broadly at the 1,056 companies combined between the S&P 500 and the Fortune 1000, which also includes big private businesses, a total of 26 companies have boards that have reached gender parity, meaning at least half their members are women. Among those companies are Amazon (AMZN), Best Buy (BBY), CBS, General Motors (GM), Navient (JSM) and Tupperware Brands (TUP).
That’s certainly progress. But 26 is still a very small number. And the fact remains that, in 2019, women still hold fewer than a third of board seats at the majority of large public and private US companies.
The answer to bringing more women onto corporate boards: Directors, CEOs and shareholders need to be deliberate about it and demand a diverse slate of candidates.
The Women’s Forum of New York, an organization for executive women that advocates for gender balance in leadership, recommends that boards make every effort to appoint a woman to every other seat opening until they reach gender parity.
“It’s not about women vs. men. It’s about companies achieving a competitive advantage by reflecting their employees, their consumers, their communities and their shareholders and tapping into not 50% of the talent pool, but 100% to build the best boards and the best C-suites,” said Janice Ellig, a past president of the Women’s Forum and CEO of the Ellig Group, an executive search firm.
That theme of intentionality and stronger performance through diversity was echoed by several CEOs at a recent Women’s Forum event celebrating companies where women represent at least 30% of all directors on their boards.
“Diversity in any regard always leads to the best, most robust discussions and outcomes for the business,” said Michele Buck, chairman and CEO of Hershey (HSY), where women make up 42% of the board.
Susan Story, CEO of American Water Works (AWK), said women make up 55% of the board at her company and chair three of the four board committees, to investors’ benefit. Total shareholder return over the past five years has far exceeded the S&P 500 average, Story noted.
Shareholders are also playing a crucial role in making sure diversity is a priority in the boardroom.
Roger Ferguson, chief executive of TIAA, a large institutional investor, is pushing companies to step on it when it comes to gender balance. He has said that TIAA will vote against directors at companies when there is no progress being made on gender and other forms of diversity.
“It’s about intent and focus. Shareholders have to make their voices heard,” Ferguson said. “The No. 1 issue facing our boards is performance. We know diverse boards with different voices lead to better outcomes. It’s not just the morally right thing to do … it’s the financially smart thing to do.”