In one of the lowest estimates yet, women make up just 12% of board members of U.S. companies, a study has found.
Out of 55,037 corporate board members, 6,517 are women, says research by Director Search.
Additionally, 4,708 U.S. public corporations do not have a single woman on their board of directors. That’s more than half the public companies in the U.S.
“We were a little surprised,” said Ken Taylor, CEO of Director Search. “There is no good reason women should be held back.”
“In 2017 that’s disappointing to a lot of people,” Catherine Banat, institutional portfolio manager with RBC Global Asset Management, told FierceCEO. “There is a lot of momentum to do something about it driven by institutional investors who have the voting power to influence.”
The dearth of women board members “says the recognition that women make up a significant share of stakeholders—shareholders, customers, employees, suppliers—is not represented,” Banat said. “Customers who are mostly women would want a board that understood them.”
Also, if you’re not including women, “You are excluding some of the vast talent pool,” she said. “Gender equality in boards is important.”
And if you do want to go after a board seat, really think it through, said Dr. Patti Fletcher, Executive-in-Residence at Babson College WINLab:
- Do some homework about which board is best for what you bring to the table. Think very hard about what you could offer to a CEO and shareholders. Start by narrowing down your focus with a few key data points: industry, type of business, strategic challenges facing the CEO and board (i.e., turnaround, global expansion, risk management, etc.)
- Boardrooms are in place to choose, fire, govern, support, coach and hold the CEO accountable. The role has very clear fiduciary and governance accountability. It’s critical to understand the finer details of what you are held accountable for and to whom. There’s a reason boards are paid well—the risks to your brand, your purse, and in some cases your freedom, are significant.
- Do not think that focusing on a smaller board or an early-stage board as your entry point is a training ground for public company boards. CEOs and fellow board members are not there to train you. Your focus should be on what you bring to the table, how you can uniquely serve the board and help the CEO.
- Remember what a board does. Your job is not to work as an operational officer. Board work means rising above the daily operations, the P&L and strategic work at the senior executive level that got you to the board and focusing at a much higher level. You use your experience to consider movements in industry, implications of government decisions, and the opportunities that lay in the challenges. Your job is to inform your follow board members, to join the committees where your impact can be most made. And, when decisions don’t go your way, your job is to get behind the decisions made.
One way women may gain more footing on boards is as members age out. In the U.S., 19% of corporate directors are age 70 and older, compared to 7% for European companies, the study said.
This means that over the next 2 to 5 years, public companies, particularly those in the U.S., will replace many of these directors as they retire due to age or are not renominated.
“These factors suggest there is a significant opportunity for public company boards to consider female director inclusion and diversity,” Taylor said.