When Ellen Costello started out in the financial industry, she was often the only woman in the room. “Especially the times I was in the capital markets business, there were very few women,” she told ThinkProgress. When she served on BMO’s board for seven years, she was one of three women out of 15 seats.
That could be uncomfortable when she was in the early stages of her career. “Sure there were times… I have to think back to the early days, especially when I was really young in my career, when it was uncomfortable,” she said. “But you adapt to it, and people are good at…looking beyond your gender, at what you can contribute.”
She eventually became president and CEO of BMO Financial Corp. and was recently appointed to the board of DH Corporation. And she says times have changes. “I’m happy to say that over the years, that group of women [in finance] has grown.”
The latest numbers released today by the research group Catalyst show that women make up 19.2 percent of board positions on U.S. companies in the S&P; 500. Perhaps more impressive is that 131 companies, or 26.2 percent of the S&P; 500, have boards that are a quarter or more female. Just 18 companies, or 3.6 percent, have failed to appoint any women to their boards at all.
While Catalyst can’t judge progress because it has shifted this year from tracking numbers in the Fortune 500 to the S&P; 500, so the previous eight years of stalled progress in raising women’s share of board seats aren’t comparable to current figures, Brande Stellings, vice president of Catalyst Corporate Board Services, thinks there’s reason to be optimistic. The number of companies without any women on their boards “is very low and indicative at least of a shift toward companies realizing it is no longer acceptable to have no women board directors in this day and age,” she said. And some companies are actually at or close to parity. Avon’s board is nearly two-thirds female, while Xerox is at exactly 50/50 and 10 companies are in the 40-plus percent range.
The challenge is getting all companies to gender equality. “The critical question is how we get past 19 percent for the S&P; 500…to something more approaching critical mass,” Stellings said. “The thing we have to next pay attention to is to make sure companies don’t stop at one and see having one on their board as a safe harbor.”
That’s where the U.S. falls behind international peers. Catalyst found that Norway’s boards are 35.5 percent female, on average; Finland and France are just under 30 percent while Sweden clocks in at 28.8 percent; and the United Kingdom’s boards are 22.8 percent female. Even our northern neighbors beat us: Canada’s boards are 20.8 percent female.
What’s the difference? “When you look at the Europe numbers, you do see many of those tracking higher than the U.S. do have regulatory frameworks in place,” Stellings said. Norway instituted the world’s first gender quota in 2008, requiring boards to be at least 40 percent female, and a number of other European countries have since done the same. The United Kingdom hasn’t put a quota in place, but in 2011 it released the Davies Report that set a target of FTSE 100 boards being 25 percent female by the end of this year, and women’s representation has been at record-breaking levels ever since.
The chances of a quota in the U.S. are slim. But there are ways to prod progress along. Currently, the only requirement in regards to corporate diversity in this country is a Securities and Exchange Commission (SEC) rule that companies disclose whether they consider diversity when picking board members in their proxy statements and, if they do, how the policy is implemented. But the SEC doesn’t define diversity, so just half take it to mean gender or race. Most often, they define it as experience or viewpoint. And complying with the disclosure rule can simply mean a company saying it has no diversity policy on its books. Changing that rule to define diversity and to make it a “comply or explain” rule in which companies either report they have a policy or have to explain why they don’t could have more of an impact.
In the meantime, Costello has some ideas about how companies can increase board diversity on their own. They can “make sure the slates that come forward are representative of a diverse slate, women and people of color, so they can consider others rather than maybe the traditional, those who they know in their network,” she said. Part of that comes down to mentoring and sponsorship. Mentorship “has certainly helped me,” she noted. “The board I recently joined in October came about as a result of a network contact of mine who knew me pretty well and made an intro.” The appointment may not have happened without that connection.
This post has been updated to reflect that Costello was not the only woman on BMO’s board, but one of three.