By Eve Tahmincioglu
The number of women on corporate boards may still be scant, but data on newly minted directors bodes well for gender equity in the nation’s boardrooms.
A report released by the EY Center for Board Matters this week found that nearly 40% of the new independent directors elected to Fortune 100 boards for the first time in 2016 were women. That compares to less than 25% of incumbent directors and less than one-fifth of exiting director who are women.
"Investors and directors increasingly see the importance of gender diversity in the boardroom as an opportunity to further enhance their cognitive diversity and alignment to forward-looking strategies, helping to improve performance and 'see around corners' with regards to risk management," says Stephen Klemash, a director at EY who directs the Center.
The report looked at a host of criteria for new directors including age and previous CEO experience.
Here’s a breakdown of some of the key findings:
- Newly appointed women directors also are slightly younger than male counterparts (age 57 compared to 59).
- Only about half are current or former CEOs: About half (49%) have non-CEO backgrounds as corporate executives or have non-corporate backgrounds (e.g., scientists, academics and former government officials).
- 10% worked at an institutional investor, an experience which was highlighted to communicate the company’s interest in shareholder perspectives.
- It’s also notable that 17% of the entering class appear to be joining a public company board for the first time.
- New directors are mainly being added to audit committees: 40% of entering directors joined the audit committee during their first year on the board, followed by nominating and governance (34%) and compensation(26%).
- The Fortune 100 Class of 2016 tends to be younger than their director counterparts: The average age of entering directors was 58, compared to 64 for incumbents and 68 for exiting directors.
- When it comes to top skills, expertise in accounting/corporate finance rank first: Accounting and international business skills were the top cited skills, ahead of skills such as strategy, technology and risk oversight.
"As companies face a confluence of business issues - including technological disruption, regulatory change, new consumer behaviors and changing workforce demographics – investors are paying closer attention to the skills and qualifications of directors in the boardroom, including whether they may provide additional levels of diversity through age, gender, race, ethnicity and nationality," explains EY's Klemash.