The Magazine of Corporate Responsibility

Women Lack Numbers and Influence on Corporate Boards

by Michael Connor

Females still have a long way to go before being represented in equal numbers and equal responsibility in corporate boardrooms, according to a new report from The Corporate Library, a corporate governance research firm.

Board RoomCiting “uneven progress” in increasing female participation in governance, the report found that while almost 90 percent of S&P 500 companies have at least one woman board member, there are far fewer female directors at smaller companies.  Only 60 percent of the companies in the Russell 3000 index have at least one woman director.  And among “small cap” companies in the Russell 2000 Index (a subset of the Russell 3000), half have no female directors at all.

Board diversity is one focus of new Securities and Exchange Commission rules announced in December 2009 requiring that a company disclose how its board nominating committee considers diversity in assessing nominees and how the committee implements the effectiveness of the company’s diversity policy.

The latest report echoes the findings of a December survey by Catalyst, a non-profit organization that focuses on issues related to women in business, which found that in both 2008 and 2009, almost 90 percent of Fortune 500 companies had at least one women director, but less than 20 percent had three or more women serving together. Catalyst found that in 2008 women collectively held a total of only 15.2 percent of board seats among Fortune 500 companies.

Corporate Library found that “even among the S&P 500 companies with female directors, women are typically a small minority and hold few positions of responsibility,” with only 57 percent having at least two women directors, and only 19 percent with more than two women.

Among S&P 500 companies, the report found that only 14 have female board chairs, and of those 11 are also the CEOs of their companies.  Corporate Library said: “Only 45 S&P 500 companies have women chairing their compensation committees; 58 have female audit committee chairs; and 75 have a woman leading their nominating committees. Very few companies have women in two or more of these positions of responsibility.”  Xerox Corporation is the only company in the S&P 500 that has a woman serving as chair of the board and another woman serving as CEO.

The report concluded that “gender parity—measured both by absolute numbers and by the levels of responsibility given to women—is still far out of reach” and recommended that a broader pool of female director candidates be developed, so more women are ready and willing to serve on corporate boards. “Once women are on boards, they must be given equal opportunity to serve in positions of leadership and influence, such as chairing the board or key committees,” Corporate Library said.

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2 Responses »

  1. Our position at sphinxx is that it's time for quotas. We surveyed 200 women in leadership roles last year and found that 74% of respondents support the use of quotas or targets or both to improve female representation on boards and in leadership roles, and 47% specifically supported the adoption of quotas.

    Women have been politely taking on board the feedback about the experience, expertise and networking they need to do to get into the top jobs for decades now... to little effect. Macchiavelli said all those years ago that those with the power will never voluntarily give it up. So why would the men who dominate business step aside for women? We know that organizations with more women in leadership roles produce financial results up to 35% stronger - so why don't the shareholders insist on diversity? Because the Institutional Investors are dominated by men at the top who are threatened by the idea of diminishing their power. Organisations have also spent millions on womens programs in the past... again with little result. Targets won't do it; we need quotas like Norway to force the shift (in Norway the quotas were only enforced by Government after boards failed to meet and work towards targets). And like Norway, we'll find that there are in fact plenty of women qualified for board and executive positions. And we'll also see that getting more women into leadership roles encourages more women to get there too.

  2. Network 2000, Inc. is a nonprofit organization based in the greater Baltimore region that promotes the advancement of women in professional, executive, and board positions. Two key goals of Network 2000 are to:

    * heighten the awareness and critical importance of women on corporate boards

    * establish itself as a source for corporations seeking board-ready corporate directors.

    Research shows that "companies with the highest representation of women on their top management teams experienced better financial performance than companies with the lowest women’s representation. This finding holds for both financial measures analyzed: Return on Equity (ROE), which is 35 percent higher, and Total Return to Shareholders (TRS), which is 34 percent higher." (Catalyst)

    Network 2000 has been measuring the representation of women in the boardrooms of public companies based in Maryland for the last five years. Our 2009 Census of Women Board Directors in Maryland shows some progress. We are pleased that between 2007 and 2008 the percentage of women holding board seats of the 92 companies headquartered in Maryland has increased from 8.8% to 9.2% compared to 15.2% nationally. Among Fortune 500 companies, Maryland exceeds the national average for the percentage of women directors since 100% have at least one woman director compared to 90% nationally (2009 Catalyst Census).

    Nevertheless there is room for improvement. Only seven companies had 20% or more women directors and women executives. Thirty of the 92 public companies headquartered in Maryland had NO women on their boards and NO women executives.

    We encourage you to read our report, reflect on the progress made and the progress yet to be made, and then seek qualified women for open board seats and executive suite positions.

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