More Women Join Corporate Boards, Reveals New Study

Now occupying around 30% of S&P board seats, more women are joining corporate boardrooms, according to a new Pay Governance report.

That figure is projected to grow in the coming years, confirmed the board-level executive compensation advisor, which advises the boards of many prominent publicly traded companies. “Board gender diversity has become a major corporate governance objective globally,” highlighted Olivia Wakefield, Partner at Pay Governance. “In the US, we have achieved substantial progress on gender diversity at many large publicly traded companies. In fact, over the past five years, the number of women board members has increased by 2,700. That represents an 18% increase from five years ago. At the same time, more than 1,900 men have departed these boards. As a result, 30% of board members at the S&P 500 are women. While there is more work to do, this is a significant shift in boardroom demographics.”

To understand the progress of women serving on boards, Pay Governance examined unique information from the DirectorMoves database. “We created this unique database to highlight the evolving dynamics of gender diversity in the boardroom,” stated George Fleck, Publisher of DirectorMoves. “The ongoing progress that women are making in joining major company boards is indisputable. We appreciate the analysis by Pay Governance in telling this important story.”

INCREASING NUMBER OF WOMEN ON BOARDS

“In a 2021 annualised forecast, more than 1,400 men are projected to be recruited to join boards; while more than 1,800 men will depart,” explained Pay Governance Managing Partner Ira Kay. “By contrast, approximately 1,200 women directors are projected to join boards, and only 460 will depart.”

While the projected total number of men joining boards will remain slightly higher than women in 2021, the departure levels for men will be substantially higher than that of women, noted the report. Wakefield attributes the increase of women on boards within the US to a number of factors. This includes legislation, regulatory efforts and shareholder focus; as well as the hard work of groups and leaders focused on the criticality of diversity issues.

“To continue diversity progress, companies should re-evaluate the skills and capabilities they need from their board members; as well as facilitate that evolution of skills to match strategy and culture via board succession planning,” advised Kay. “The increased representation of women in the boardroom over the past five years is promising. While boards have made progress on gender diversity, there is more to do to increase both gender and minority representation on boards as part of diversity, equity, inclusion and belonging priorities. This means that we can expect to see more change in board composition in the coming years.”

Companies appointed a record number of CEOs in the first half of 2021, with more women securing top roles, according to a new report. However, the top leadership ranks still lack gender and racial diversity, confirmed the Global 2021 Route to the Top report. Click here to read more.