Is the "Fearless Girl" Crying?

Report Shows Decline in Woman Board Appointments

By April Hall

As corporations and investors are pushing for more gender diversity on boards, it seems that progress has stalled.

According to a report by executive search firm Heidrick & Struggles released Tuesday, the number of new director appointments who were women fell 2% in 2016, to 27.8%.

At this rate, gender parity won’t happen in the boardroom until 2032, six years later than it last reported.

Douglas Chia, executive director of The Conference Board Governance Center, said he found the numbers discouraging, but not entirely surprising.

“Had it gone down quite a bit it would have been surprising, I would have thought it would have still gone up slightly,” he says. “This shows that boards are not taking this seriously, they’re not making this a priority. The don’t see it as a real issue, but see it as being forced upon them by a women’s movement and they don’t acknowledge any of the studies or any of the reports on why it’s beneficial to have more women—or any women—on their boards.”

(Related Article: What the Fearless Girl is Really About)

Heidrick & Struggles’ Board Monitor study examined the class of independent directors who filled vacant or newly created board seats at Fortune 500 companies in 2016. It also analyzed trends including gender, ethnicity and industry experience on boards.

Part of the stall may be because the boards that are aware of gender disparities and do take them seriously have already taken action, Chia says. There will be some boards where the thinking will never change, or it will take a huge movement to change.

Part of the stagnation, he notes, is only going to the C-suite for potential board members. Finding women CEOs of Fortune 500 companies severely limits the pool of candidates.

“People are not expanding the pool of potential candidates they are looking at, they’re trotting out the same types of candidates they have before,” Chia says. “And search firms are not being successful in finding new candidates or are not being instructed by clients to do so. It has to be a real concerted effort. You have to take affirmative steps to change the makeup of your board just like you would to find an expert in a field or particular skill set.”

These old mindsets, he adds, may never change and there may not be gender equity until aging male board members “cycle out.”

“It’s a matter of getting the laggards to put even one woman on their boards,” he says.

In 2016, Fortune 500 companies filled 421 vacant or newly created board seats with independent directors, a new high since the inception of Board Monitor in 2009.

Though the overall number of female appointments is down, women serving on boards for the first time jumped 10 points to 37%. The tech industry is also taking notice of female talent by filling 40% of their board seats with women, up 13.5% in 2016.

"When companies place more value on a candidate's unique set of skills and experiences than on his or her previous board experience, there is more opportunity for women and people from other underrepresented groups to gain greater representation in the boardroom," says Bonnie Gwin, vice chairman and co-managing partner of the global CEO & Board Practice for Heidrick & Struggles.

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