The number of board members of companies in the Standard & Poor’s 500-stock index who are women is on the rise. According to an article in the Washington Post, “After being stuck at 16 percent for several years, the percentage of women-held board positions in the S&P 500 now reaches nearly 27 percent.”
Currently, there are ten companies in the S&P index where women comprise at least 50% of the board. They are Ulta Beauty, Viacom, CBS, General Motors, Omnicom Group, Best Buy, American Waterworks, Progressive, Capri Holding, and Amazon.
The article by Jena McGregor highlights the story of Kathy Higgins Victor, who was the first woman on Best Buy’s board 20 years ago. What had an impact at Best Buy was a commitment to increasing diversity – in gender, race, and skill sets – that the company made five years ago. Since then, Best Buy has added six board members, five of whom have been women. Also during that period of time, Victor was the chair of the board’s nominating committee.
She calls the pace of progress over the years “glacial,” but the numbers are now increasing at a “steady march.” Also interesting is the fact that in 2009, there were 56 firms in the S&P 500 that did not include any women. As of June 2019, there was one.
Here are possible explanations for the increase in women on boards:
- Shareholders are placing greater scrutiny on the composition of board membership, in some cases demanding more diversity.
- Watchdog groups are calling out companies with no women or too few women on their boards.
- Some groups are acting as a “talent marketplace,” helping companies and potential female board candidates find each other.
- It is now commonly understood that organizations with more diverse leadership perform better. (Although the article quotes researchers cautioning that the connections between board diversity and performance are not as conclusive as some say.)
- Legislators in several states are considering taking action similar to what California has done: require public companies to include females among their board membership. (California requires one to three women per board, depending on the size of the company.)
Best Buy’s Victor says the goal of working toward diversity is this: “The people making decisions should look like the people affected by those decisions.”