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Latest Numbers
Alliance for Board Diversity: reported only slight gains for diverse board members (women and minorities) on Fortune 500 boards over the past four years, from 26.7% in 2012 to 30.8% in 2016. That's basically a gain of a percentage point for each year. [LINK] Also of note: white men still hold nearly 82% of the lead director positions & 90.5% of board chair seats. [LINK]
From The Street: the most diverse boards in S&P 500 by industry sector, with data for both gender and race/ethnicity. [LINK].
Egon Zehnder: found gains in 36 of the 44 countries included in their global study of women on boards; unfortunately the US & UK were among the eight countries going backwards, with a drop in the portion of new appointments that went to women. [LINK] One observer suggested that director ego (viewing an exit from a board as a failure) might be to blame for the lack of turnover and opportunity. [LINK]
Canadian Board Diversity Council: women hold 21.6% of the board seats in Financial Post 500 boards, up from 19.5% in 2015. In spite of the gain, observers expressed concern that the year-to-year gain was smaller than the 2.4 percentage-point gain reported in for 2015. [LINK]
Board Matters
Activist investors often overlook women in board nominations; since 2011, five of the largest activist funds have nominated at least 174 board candidates, and only seven have been women. [LINK]
- Want a winning hand? Investors should take note. Women won five of their seven nominations (71%), men won 103 out of 167 (62%).
A recent study found that women often bring much needed (and otherwise missing) skills to boards, including expertise in risk management, human resources, policy, corporate governance, and compliance. [LINK]
From PwC's Annual Corporate Directors Survey: current board members are still the primary source for new board candidates, but boards report an increase in the use of investors and public databases for new directors. [LINK]
- Also from PwC: 10% of the directors surveyed think the optimal percentage of women on boards is 0 to 20%; over half are OK with 40% or less. [LINK]
Positive signs from the Investor Responsibility Research Center's Board Refreshment Trends: average board member tenure has dropped from 9 years to 8.7 years since 2012 for the S&P 1500 companies included in their study. Also: more than half of the companies added a new director in 2016. [LINK]
- The not-so-good news: 38% of the directors in these companies have served for 10 years or more and more than 20% are in their seventies and eighties. The average age of the directors rose, and the percentage of directors aged 50 or less has declined.
Liftstream recently looked at board gender diversity in the biotech industry, focusing on 177 biotech companies that conducted an IPO between 2012 and 2015. There's a great deal of detail in this study; it's definitely worth a read. [LINK]
- Among their findings: women hold around 10% of the seats on the boards of the companies they studied, but 42% of the companies still have all-male boards. They also found that men are being appointed to biotech boards at twice the rate as women, giving them cause for concern regarding the ability to sustain current levels of gender diversity in corporate leadership.
Snap came under fire recently for the gender pay gap in the board compensation included in their original IPO filing. What jumped out to many was the significant compensation differences between Snap's single female board member, Joanna Coles, and her male counterparts. [LINK]
- Snap has since submitted an amended filing that reflects a previously undisclosed agreement from January with Coles that brings her compensation in line with the two newest board members (both males). [LINK]
No surprises here: directors are downright hostile to the idea of quotas to drive board diversity. [LINK]
- To those who don't want ''people who are only on the board because they are in a specific category," I always want to ask one question: then why do you keep appointing white men?
Executive Ranks
Hedge funds are apparently yet another industry where ''hiring only the best'' equals white men only. [LINK]
- The good news: one hedge fund, Ides Capital, is headed by Dianne McKeever, who targets poor board practices, including lack of women on boards. [LINK]
Where the women are: in the top corporate governance roles at largest mutual and pension funds, where they decide how fund votes on proxy matters. [LINK]
Worth Noting
One Chinese investor recommends avoiding companies with female CEOs & women on boards: ''what else do women do better than men except give birth?'' [LINK]
Glamour magazine used all-female visual design teams for their photos in February issue after discovering that most of their photographers, stylists, makeup artists, and hair stylists were men. The magazine has made a commitment to more gender equality in their visual design teams. [LINK]
Companies likely to be the targets of diversity activists in 2017 includes Goldman Sachs, Citigroup, Bank of America, Wells Fargo, and American Express. [LINK]
Could better board diversity (and less groupthink) have stopped Japanese auto-parts maker from ignoring a deadly air-bag defect? [LINK]
Lack of experience working with a diverse board could lead to new CEO's downfall, director loss & lower firm performance. [LINK]
By age 6, girls start shying away from games/activities/professions where ''brilliance'' is required. [LINK]
Women are well-represented in analytics industry except on the speaker circuit and conference panels; here's eight women you should know. [LINK]
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From ION's Member Organizations: Research Updates
The Forum of Executive Women:
- The Forum's Women on Boards 2016 report documents minimal progress in 2015 in bolstering the ranks of corporate women leaders in the region according to an analysis of 2015 year-end SEC filings of the 100 largest public companies in Philadelphia. Women only held 14 percent of board seats (a slight change from last year) and 14 percent of executive positions at these companies (a one percent increase from the year before). Also, of 60 board openings, one third of those went to women (20 positions, for a 33 percent share). [LINK]
The Boston Club
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The Boston Club's most recent census of women directors and executive officers reported increases in the percentage of seats held by women on boards (18.6%) and the number of companies with three or more women directors (19), as well as a decrease in the number of companies with no women on their boards (17). The census found essentially no change in the executive officers category, which decreased from 12.1 to 12.0%. [LINK]
Also see: From the Boston Club President, 28 ways to Empower Women
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Conference Spotlight: Skytop Strategies
Potential vs. Performance: Do Boards Expect More from Female Board Candidates?
This roundtable discussion focused on the differences in potential vs. performance as it relates to how board candidates are evaluated by search firms and nominating committees. It drew on the research that shows that women and men are often held to different standards in corporate settings, where women are evaluated on past performance while men are evaluated on future potential (Barsh, 2011; Catalyst, 2011).
There is some research that would suggest that women board members are held to a higher standard than their male counterparts. Consider the following:
- Women were more likely to have served in the top job in their organization (CEO or equivalent) (68% of the female board members vs. 51% of the male board members) and to have operational experience (76% of the women vs. 68% of the men). [Link]
- Women board members possess more types of expertise (measured in terms of unique skills) than their male counterparts. [Link]
- Women (and minority) board members typically "had deeper resumes" with respect to qualifications and experience than their non-minority, male colleagues.[Link]
We came to no conclusion regarding the issue of potential vs. performance; to do so would really require access to search firm and nominating committee discussions. What we did do is generate a list of actions steps for getting more women on boards that included:
- Find sponsors for women board candidates - a sitting board member who will actively advocate for their consideration.
- Encourage women to serve as advisors for start-up organizations in order to position them for board service as the organization grows.
- Look for opportunities for women to serve on the boards of significant national boards as a way of building experience, network, & visibility, such as the regional boards of the Federal Reserve and Federal Home Loan Banks.
- Present credentials of board candidates with no gender data – get buy-in regarding qualifications before identifying the gender of a candidate.
- Engage men in all of our initiatives and discussions.
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