Women hold just 16 percent of board seats on the largest American companies, which is a smaller share than those held by men named John, Robert, James and William, according to an analysis from accounting firm EY.
As of their 2014 annual meetings, S&P 1500 companies’ boards had made progress since 2006, when they were just 11 percent female. But that progress is just inching along: the share of women on boards has increased by just 5 percentage points over the last decade. This large group of companies also had a smaller share of female directors than the smaller group of S&P 500 companies — 19 percent — and Fortune 100 companies — 22 percent.
And while 98 percent of Fortune 100 companies and 81 percent of S&P 500 companies have at least one woman on their boards, only 54 percent of the larger S&P 1500 do. More than a quarter of S&P 500 companies’ boards are 25 percent female or more.
The EY report also notes that while more women are being added to boards, it’s often done by expanding the number of seats, not by diversifying the ones they already have. Just over half of those that added more women did it by increasing board size last year.
Adding more women to leadership positions isn’t just a matter of social justice. It is a matter of smart business. This has been found to be particularly true of gender diverse boards. A study by Credit Suisse last year found that around the world, companies with more than one woman on their boards have seen a 3.3 percent bigger stock market return since 2005 than those without any women. Those with an above average number of women also outpaced those with a below average number by 3.7 percent. A Thompson Reuters study from 2013 found the same thing. The same held true in a study of Israeli companies with gender diverse boards. Having more women on boards also leads companies to make decisions that protect company value and performance.
But the United States lags behind other countries in policies meant to prod progress along. The only rule here is from the Securities and Exchange Commission (SEC), which requires companies to disclose information about how they consider board diversity in their proxy statements. But it doesn’t define “diversity,” so most don’t look at gender or racial diversity. On the other hand, many European countries have significantly increased board diversity with quotas, and other countries, such as the United Kingdom, have stated public goals that have resulted in big jumps in diversity.