Almost Half Directors Appointed to US boards in Q3 Were Women

The number of women in director positions at the largest US companies continues to increase, with 47.7% appointed as Directors last quarter, confirmed Equilar. However, progress remains too slow.

Equilar’s latest edition of the Gender Diversity Index (GDI), revealed that as of Q3 2021, 26.1% of Russell 3000 directorships were held by women, up from 25.2% in Q2 2021. As a result, the needle on the GDI inched forward from 0.50 to 0.52 in the past quarter, where 1.0 represents gender parity on boards of directors.

Among the leading factors driving this acceleration is the fact that almost half (47.7%) of new board seats were filled by women in Q3 2021. During Q3 2020, that figure was much lower at 40.9%. Additionally, in Q3 2021, there were 92 Russell 3000 boards with at least 50% women, up from 84 in Q2 and from 73 one year earlier. Meanwhile, boards with female representation between 40% and 50% jumped from 208 to 232 in Q3 2021.

ENCOURAGING STATISTICS

“The progress continues to be encouraging, but moving from a homogenous board to a diverse board requires intentionality,” stated Susan Angele, Senior Advisor of Board Governance at KPMG’s Board Leadership Center. “Whether driven by the nom/gov chair, lead director or another board member, a leader with a strong commitment is often the key to board diversity.”

Legislative efforts, such as those in California, Illinois and Washington, have added pressure on boards to accelerate the pace of electing women directors. More recently, Nasdaq’s SEC-approved board diversity listing rules have altered the way companies approach the topic of board diversity. The requirements ultimately do not require boards to meet the diversity minimums to remain listed, but they do require companies that fail to reach stated minimums to explain why they do not comply.

“The Nasdaq proposal has fundamentally shifted the conversation around board diversity,” said Brigid Rosati, Managing Director, Business Development and Corporate Strategy at Georgeson. “This non-compliance disclosure will undoubtedly open the floodgates to further scrutiny around broader workforce diversity, which was a key issue in the 2021 proxy season.”

PROGRESS STILL TOO SLOW

That said, while the numbers for women in leadership are moving in the right direction, progress is still too slow and not reflective of the nation, according to another new report. While the numbers for women in leadership are moving in the right direction, with the Fortune 500 up to 8.2% from 6.6% in 2019, progress is still too slow, according to the 2021 Women CEOs in America: Changing the Face of Business Leadership report.  

The report, released by Women Business Collaborative (WBC) with Ascend, C200 and Catalyst, revealed that women currently in CEO roles stands at 8.2% in the Fortune 500; 7.3% in the Fortune 1000; 6% in the S&P; 5.6% across the Russell 3000; and 7.4% at private companies with revenue over $1 billion. And women of colour hold only just 1% of CEO positions across the Fortune 1000. In 2021, the number of women running businesses on the Fortune 500 hit an all-time record of 41, with six more women joining the ranks of Fortune 500 CEOs. 

ACCELERATING ACTION FOR PROGRESS

Drawing on data from Fortune 500 and 1000, S&P, Russell 3000 and private companies, the report is a comprehensive look at women running public and private companies, as well as women-led start-ups and female entrepreneurs with more than $500 million in revenue. It also spotlights the status of diverse women CEOs and provides an assessment of the women in the executive suite pipeline, a critical piece of the puzzle for elevating more women to the CEO role.

“WBC members share two abiding principles: a belief in the transformative power of business to effect change, and the imperative to create more diverse leadership teams who can meet the moment of a rapidly evolving world,” said Edie Fraser, CEO of WBC. “Reporting on the hard data, sharing the facts and telling the real stories is critical to accelerating progress toward advancing more women – and more women of colour – in business.”

In fact, companies with women CEOs make a huge difference for other female executives as it means those firms tend to have significantly more women in leadership roles and on the board, confirmed another new global study released by Corporate Women Directors International. Click here to read more.