The share of women on corporate board seats among hundreds of the country’s biggest corporations has doubled over the last 17 years. But even if the rate of change significantly increased, it will take decades until women reach equality.
In 2014, women made up about 16 percent of board seats among companies in the S&P 1500 index, according to a report from the Government Accountability Office (GAO) to be published on Monday afternoon and shared with ThinkProgress. That’s up from just 8 percent in 1997.
CREDIT: Government Accountability Office
The increase was partly driven by women claiming new board seats that opened up. Yet the GAO also found that even if women filled every single future board seat vacancy, they won’t be equally represented for another decade. Given how unlikely that scenario is, the GAO also looked at what would happen if women and men simply joined boards in equal numbers each year, which would still be about twice what the current rate is. At that rate, women would only get to 30 percent of board seats in 10 years and won’t see equality for another 40 years — until 2065.
CREDIT: Government Accountability Office
Board seat turnover is already very low, one obstacle that may be in women’s way. Since 1998, only an average of about 4 percent of board seats among these companies have been filled by new people. In 2014, just 614 seats of the more than 14,000 total were filled with someone new.
The report tried to piece together why women are making such slow progress beyond a low turnover rate. One troubling answer seems to be that once a company appoints one or two women to a board, it seems to feel that its mission of diversifying is accomplished. In 2014, nearly 30 percent of S&P 500 companies with no women on their boards added a woman. Compare that to just 15 percent of those that already had one woman and only 6 percent that had two women. The median number of women at small and medium-sized companies is just one, but it only increases to two at larger companies where women tend to be better represented.
Interviews the GAO conducted with people on boards also found that many believe boards don’t prioritize diverse candidates, that they tend to pick people from their existing networks or those who “fit” with the current makeup of the board, and that there is a lack of women in the traditional pipeline to pick candidates. Current and former CEOs made up nearly half of the new board seat appointments in 2014, yet women make up 4 percent of CEOs in the S&P 1500.
In response to the report, Rep. Carolyn Maloney (D-NY), who originally requested that the GAO look into the issue, is promising legislation in the coming weeks modeled after policies in Canada and Australia, which would make the Securities and Exchange Commission (SEC) recommend strategies for increasing the share of women on boards and require companies to either comply with them or explain why they haven’t.
She will also urge the SEC to update its current diversity disclosure requirement. Public companies are required to disclose whether they consider diversity when picking new candidates and, if so, how. But the requirement doesn’t define diversity, so only half take it to mean gender, race, or ethnicity. And companies can meet the requirement by simply saying they don’t consider diversity.
“At a minimum the SEC should update its deeply flawed diversity disclosure requirements, so that corporations have to report gender diversity,” Maloney said in a statement.
There are many more direct interventions the government could take to increase board diversity. A number of countries have instituted quotas, requiring public companies to have a certain share of female board members by a particular date. But even less strict approaches can be effective. In 2011, the UK government issued a voluntary target for the largest companies to have boards that are at least 25 percent female by the end of 2015. By March of last year, there were no all-male boards among the 100 largest companies and women held 23.5 percent of seats.