Women are making strides in gaining seats on corporate boards, at least according to one measure.
The percentage of women members on corporate boards in the Russell 3000 index, which includes the 3,000 largest U.S. public companies by market capitalization, has surpassed 20%, the governance data firm announced earlier this month in sharing the second-quarter 2019 results of its Gender Diversity Index.
The 20% goal was met a year earlier than Equilar dared to hope when the first index was released in January 2017.
“The current figure is no small accomplishment. Just a year ago the Equilar Gender Diversity Index for Q1 2018 indicated that the percentage of women directors among the Russell 3000 was 16.9%,” Susan Angele, a senior adviser at KPMG’s Board Leadership Center and founding Equilar Diversity Network partner, said in a statement. “Among other reasons for the increase, investors are most certainly having an influence. Reflecting back, the level of progress to get this far has been tremendous. There is much to celebrate, but of course there is still a very long way to go.”
Also in the second quarter, Equilar said:
- More than 41% of new directors to corporate boards were women.
- For 53% of the women filling an open seat, it was their first time serving on a corporate board.
The importance — and benefits — of reaching gender parity (50% male and 50% female representation) on corporate boards in senior living and other industries was noted by Juniper Communities founder and CEO Lynne Katzmann said when she accepted the inaugural McKnight’s Women of Distinction Lifetime Achievement Award in May.
“Gender-balanced boards are imperative, and gender-balanced boards get results,” she said at the time.
Katzmann pointed to a recent report for Credit Suisse that found that companies with women directors, compared with those without, had higher growth, higher value and higher return on equity. “In addition, last year, a study in the [Harvard Business Review] noted that gender-balanced teams achieved greater customer satisfaction and enhanced employee engagement,” she said.
The gap in representation on the Gender Diversity Index “is closing more quickly than we have seen in the past,” said Belen Gomez, vice president of strategic initiatives and communications at Equilar. “Staying laser-focused on this issue in terms of consistent data reporting has been a critical step in managing progress.”
Back in 2017, 15% of board seats in the Russell 3000 were held by women, according to Equilar. If the growth rate remained the same, the company said at the time, then Russell 3000 boards would not reach gender parity until the fourth quarter of 2055.
Perhaps meeting the 20% mark a year earlier than anticipated means that the 50% mark will be met before 2055. But women won’t just sit back and watch to see whether than happens.
“It’s essential to take a step back and recognize the collective efforts across the industry to reach this point,” Gomez said. “However, there is still more work to be done to reach parity.”