- Country-wide: 36% of companies have no women on their boards of directors. While the average corporate board has 8.8 members, only 8% of corporate boards have three or more women.
- Regional: The Midwest region leads the nation in boardroom gender diversity. The Northeast ranks second across all measures. The West and South regions lag somewhat, and the Mountain region ranks last on all measures.
- State Rankings: Among states with more than 50 companies, Texas has the highest percentage of companies (52%) with no women on corporate boards, compared with 15% for Minnesota. Connecticut has the highest percentage of boards (15%) with three or more women.
- Industries: Energy companies have the highest percentage of boards with no women (61%). By contrast, among industries with more than 100 companies represented, Consumer Staples companies have the highest percentage of boards (20%) with three or more women.
- Earlier Findings: In March 2012, GMI Ratings published the Women on Boards Survey, which analyzed gender diversity on the boards of directors of S&P 1500 companies. The survey found that an average of 12.6% of board members at these companies were women. Based on this statistic, the U.S. ranks 11th in boardroom gender diversity out of 45 countries.
Michelle Lamb, the lead author of the current study, noted: “Gender diversity often sparks deeply politicized rhetoric that misses the practical significance of the issue – namely, its impact on the performance of corporate boards. Multiple academic studies have concluded that diverse corporate boards exercise more diligent oversight. They have better attendance records than homogenous boards, and they invest more effort in auditing when the complexity of the business warrants heightened scrutiny. Diverse boards also have more rigorous and multifaceted discussions, avoiding groupthink. As the continuing woes of companies as varied as Chesapeake, Facebook, and JP Morgan demonstrate, many firms would benefit from more conscientious board leadership. As a result, institutional investors are increasingly pressing on many fronts to improve board diversity, including the representation of women.”
Kimberly Gladman, who co-authored the study, added: “The study confirms that the representation of women on U.S. boards remains low. But we caution readers not to assume that these statistics only reflect the impact of cultural attitudes or biased approaches to recruiting. For example, the regional variations detailed in the findings are almost entirely explained by the concentration of male-dominated industries in various regions. The representation of women on the boards of technology companies lags the national average. Despite a few high-profile women like Marissa Mayer at Yahoo, Silicon Valley is mostly a man’s world when it comes to the boardroom. Similarly, energy companies negatively impacted the numbers for the Mountain and Southern regions, where oil and gas companies play a major role. On the other hand, consumer products companies, which tend to have more women than average, accounted for the Midwest’s outperformance.”
Earlier this month, GMI Ratings announced the launch of the Diverse Director DataSource (www.GMI3D.com), a database of diverse director candidates commissioned by the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS). The database is designed to help companies and recruiting firms identify and recruit candidates sometimes overlooked under traditional search processes.
About GMI Ratings
GMI Ratings is an independent provider of research and ratings on environmental, social, governance and accounting-related risks affecting the performance of public companies. The firm’s ESG ratings for nearly 5,500 companies worldwide incorporate 120 ESG KeyMetrics™ to help investors assess the sustainable investment value of corporations. The firm also provides Accounting and Governance Ratings (AGR®) for approximately 18,000 public companies worldwide. AGR metrics reflect the accuracy and reliability of a company’s financial reporting. Clients of GMI Ratings include leading institutional investors, banks, insurers, auditors, regulators and corporations seeking to incorporate accounting and ESG factors into risk assessment and decision-making. A signatory to the Principles for Responsible Investment (PRI), GMI Ratings was formed in 2010 through the merger of GovernanceMetrics International, The Corporate Library and Audit Integrity. In the 2012 Independent Research in Responsible Investment (IRRI) Survey conducted by Thomson Reuters Extel and SRI-CONNECT.com, GMI Ratings was named “The Best Independent Corporate Governance Research Provider”. For more information please visit www.gmiratings.com.
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