Uncommon Women

At a time when boardroom diversity is a priority for many companies, growth in the number of women serving on the boards of publicly traded companies has not kept up with demand or with investor sentiment, which claims that when it comes to good governance, women matter.

In 2006, women held just 14.6 percent of board seats at Fortune 500 companies, down from 14.7 percent in 2005, according to Catalyst, a consulting firm that researches and consults on gender leadership. Black, Hispanic, and Asian women held just
3.1 percent of all Fortune 500 board seats, down from 3.4 percent in 2005. The number of companies with no women board directors increased from 53 in 2005 to 58 in 2006.

While women seem to be making fewer inroads into boardrooms at public companies, a new survey indicates that investors favor gender diversity among directors. Research by Pepperdine University’s Graziadio School of Business and Management found that more than half of those surveyed said that having women on corporate boards is relatively important in their decision to invest in a company. “The results support the contention that many investors value a broader range of perspectives on the board,” says Dean Linda A. Livingstone.

Looking at the year-to-year change in women directors doesn’t show the whole picture, says Deborah M. Soon, vice president of executive leadership initiatives at Catalyst. Since Catalyst began tracking the number of women in top corporate positions a decade ago, the percentage has increased from 9 percent to nearly 15 percent, she says. “A better question to ask is why it’s not moving faster,” Soon adds.

A number of organizations have cropped up to help companies attain that goal, including the Alliance for Board Diversity, Corporate Women Directors Intl., and, most recently, the American Bar Assn.’s DirectWomen Institute.