Gender Diversity in the Boardroom

A grassroots movement to increase the number of women on boards has taken way. Corporate, professional, and investor-driven initiatives have been put into place to increase gender diversity. Having more gender diversity in boardrooms is essential for this country and its progress toward gender equality for all. 

PRWeek

Certain US states and municipalities have taken up ways to progress towards gender diversity as investors. For example, in Deloitte’s “Women in the boardroom”, Rhode Island announced a proxy voting initiative, which made companies accountable for adding more women and minorities to boards if they were to benefit from state pension fund investments. 

An initiative based in the United Kingdom called the 30% Club is an international organization with chapters around the world that work to achieve 30 percent representation of women on boards. Members of the group include CEOs and chairs of large US companies who are dedicated to achieving gender equality in their own organizations and among their peers. 

In 2018, California became the first state to demand that publicly-traded companies put at least one woman on their Board of Directors by the end of 2019. Gov. Jerry Brown signed this landmark legislation despite opposition from more than two dozen business groups. The minimum requirement will increase to two by the end of 2021. If a company doesn’t comply, they could face fines of $100,000 for a first violation and $300,000 for the next violation. 

Not many other states have passed similar legislation, but several are approving resolutions with an aim to move towards gender equality. Studies have shown that when companies have at least one female director, they perform better than their all-male counterparts, but progress toward gender equality in the boardroom is still slow. 

California state Sen. Hannah-Beth Jackson, a Democrat from Santa Barbara who co-authored the bill, pointed out the percentage of women in California corporate boards had barely moved up from 15.5 percent in 2013 to 16 percent in 2018. This bill presented statistics from 2017 showing that one-fourth of California’s public companies in the Russell 3000 index had no female directors. In addition, nationally only half the 75 largest IPOs from 2014-16 were launched by companies with no women on their boards. In an article by USA Today, Sen. Jackson states, “There are plenty of qualified women who are ready, willing, and able to serve on corporate boards.” Also, Sen. Jackson is confident that companies will see that they are better off opening up their boardrooms to the other 52% of the population, which is also 70% of consumers. 

Fortune 500 findings from the Missing Pieces Report show that women gained 187 seats between 2012 and 2016, representing a 20.5 percent increase. Greater gender diversity in boardrooms is possible. With strong leadership willing to change the board’s composition, qualified minorities and women will have a seat at the table. While achieving gender diversity is imperative, companies are also increasingly seeking full diversification of their boards across gender, age, race, and sexual orientation. 

Sherry Smith serves on the board of directors of Deere & Company, Realogy Holdings Corporation, and Tuesday Morning. Smith thinks that companies are responding to research and are beginning to understand the importance of gender diversity in the boardroom. In addition, in Fortune 500 findings from the Missing Pieces Report, Smith notes that companies can be encouraged to expand their candidate searches to bring on next-generation board members. This is important because candidates who can relate to the challenges that companies are facing in a global competitive environment and can offer insight will be able to advance the diversity of boardrooms as well as companies. 

Deere

The corporate boardroom has been dominated by white men for way too long. I think that companies who don’t recognize that women are equally as smart, driven, and capable as their male counterparts are doing a disservice to society, as well as their company. Companies have the ability to diversify the boardroom and with the California law, as well as other initiatives, we will see this happening more often.