By Ally Marotti
WWR Article Summary (tl;dr) A new report released this month by the Alliance for Board Diversity shows women and minorities held 30.8 percent of board seats among Fortune 500 companies in 2016, compared with 25 percent in 2012. An uptick, yes, but one that is increasing as slow as a glacier moves.
The CEO didn’t want to hire a woman, and he let Carla Carstens know it.
In fact, it was the first thing he told her when she came in to interview for a board position at his private company.
“He started the conversation out saying, ‘I really wanted somebody just like me, but my board said I needed to hire a woman,'” she said.
That was over a decade ago, but Carstens, who lives in Chicago and now serves on the board of an Ohio-based trust, said things haven’t changed much, at least not “as much as we would have liked.”
Women and minorities are occupying more seats at corporate boardroom tables than they were four years ago, but their presence is still severely lacking, according to a new report released this month by the Alliance for Board Diversity, a collaboration of four diversity organizations.
At this rate, it’ll take almost a decade before women and minorities occupy 40 percent of those decision-making seats, the report found.
That’s a major missed opportunity in connecting with consumers and expanding operations, said Ronald C. Parker, chairman of the Alliance for Board Diversity.
“What company do you know (that) would be willing to wait 10 to 15 years to take opportunities for growth?” he said. “They’re not moving fast enough … in changing the composition of their boards.”
The report reviewed Security and Exchange Commission data submitted as of June 30 from 492 Fortune 500 companies. Women and minorities held 30.8 percent of board seats among those companies in 2016, compared with 25 percent in 2012.
An uptick, yes, but it’s increasing about as slow as a glacier moves, said Deb DeHaas, chief inclusion officer at Deloitte, which collaborated on the report. Slow turnover on boards partially contributes to that tepid growth, as well as failure to go outside normal business circles to tap talent.
Fortune 100 companies are doing a little better than the Fortune 500 group: Women and minorities represented 35.9 percent of board members in 2016. But up from just 32.1 percent in 2012, the gains are still “minimal,” the report stated.
Planning could help accelerate that growth, DeHaas said. Companies could keep an eye on which board member will retire next, and start priming someone for the role, like they do with other C-suite positions.
Having someone on or affiliated with the board to push minority and women hires helps too, said Carstens, who was not affiliated with the report.
“To get a women on the board, there had to be somebody in there,” Carstens said.
The number of director seats at publicly traded U.S. companies held by women is ticking up at about 1 percent a year, according to an unrelated study by corporate research firm Equilar. As of Dec. 31, that number was just over 15 percent, up from 14 percent in 2015.
Equilar found that 738 companies still have no women on their boards. Unless something changes, parity won’t happen until the end of 2055. That’s about the same time girls being born today will start taking seats on corporate boards.
A board lacking women and minorities often fails to reflect the diversity of the company’s workforce, and can be misaligned with the consumers it serves, said Cid Wilson, president and CEO of the Hispanic Association on Corporate Responsibility, one of the member companies of the Alliance for Board Diversity
Imagine the buying power Latinos have in America, Wilson said. If a company’s board lacks a Hispanic member, that company will have a much harder time tapping into that buying power.
“It could have a business impact on you,” he said. “Without a diverse board, you are handicapping your company.”