Modern Governance 10.0: The Few Women Who Make it to the Board Room Outpace Men in the Race for Top Spots, Diligent Institute Report Shows
New study of nearly 6,000 public companies reveals that while gender imbalance persists in board rooms, women directors take board leadership roles faster than men
[March 9, 2020 - New York, NY] Despite occupying only 22% of board seats, for the few women who make it onto public company boards, taking on leadership roles - including board chair, lead director, and committee chair positions - happens at a faster pace than it does for their male counterparts, according to new research released today by the Diligent Institute. The Diligent Institute is the research arm of Diligent Corporation, a leader in modern governance and a trusted provider of board insights to over 17,000 organizations and 650,000 leaders worldwide. According to the report, women directors assume corporate board and committee leadership roles up to two years faster than men, despite occupying only 7% of Board Chair and Lead Director roles, globally.
The report, titled A Few Good Women: Gender & Inclusion in Public Company Board Leadership, examined data from 5,911 public companies around the globe to determine women directors' participation in board and committee leadership roles after they join public company boards.
When it comes to board leadership, the data show men (45%) and women (40%) are nearly as likely to directly join a board as the Chair or Lead Director. For directors who did not join the board in a Chair or Lead Director role, but eventually achieved one, the report found female directors reach those leadership positions faster than their male counterparts. It takes women board members 6.31 years on average to be elevated to a leadership role, as opposed to 8.02 years for men. This twenty-month difference provides some evidence that companies are actively seeking fresh perspectives in leadership roles and working to build a more inclusive culture.
'This report falls on the heels of International Women's Day, and the findings mark some encouraging signs of progress that should be celebrated,' said Diligent CEO Brian Stafford. 'Obviously, there's still a lot of work to do in bringing more diversity to boards and corporate leadership, but it's inspiring to see the number of women who are joining boards are taking critical leadership roles. Diversity brings unique perspectives and expertise companies need to thrive - and diverse candidates represents a still largely untapped talent pool for corporate leadership roles. Diligent encourages companies to take note of this modern governance best practice and expand their networks - there are thousands of women board candidates who are absolutely ready and able to assume leadership roles.'
The report also suggests a growing number of companies are willing to onboard women candidates who do not bring previous CEO or public director experience to their board roles. Rather than penalizing women for this, these companies are recognizing the specialized skill sets and perspectives diverse candidates bring, including digital technology expertise, specific legal or HR knowledge and experience in implementing ESG and sustainability programs, as one study participant commented.
Today, women occupy 24% of all board committee seats and 21% of board committee chairs. According to Dottie Schindlinger, Executive Director of the Diligent Institute, 'While the total number of women on boards is still small, women directors are highly engaged in committees - including the Audit Committee, which is often thought of as a 'power center' for the board. It will be interesting to see if this trend continues as women begin participating in public company boards in greater and greater numbers.'
To view the full report findings, please visit: https://www.diligentinstitute.com/gender-inclusion-board-leadership
About Diligent Institute
Diligent Institute provides publicly available, industry-leading research on global board governance. The Institute equips board directors and corporate leadership teams at organizations around the globe with the information to make forward-looking decisions that leave a meaningful mark on the world. The Institute was founded in 2018 and serves as the global governance research arm of Diligent Corporation. Please visit diligentinstitute.com to learn more and subscribe to stay updated on research.
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