Diversity in U.S. Boardrooms
August 13, 2003
The governments in Norway and Sweden have instructed public companies there to increase the number of women in their boardrooms or face quotas for female representation. Such quota systems have been ruled unconstitutional in the United States, but companies here are still striving to fill more board seats with women and minorities.
According to the Investor Responsibility Research Center in Washington, D.C.:
- Women held about 13 percent of board seats at S&P 500 firms last year and only 10 percent at S&D 1500 firms.
- Minorities hold 8.8 percent of 7,500 board seats at S&P 1500 companies.
- Some 94 percent of boards in the United States with three or more women had drafted conflict-of-interest guidelines, compared with 68 percent of all-male boards.
- About 72 percent of boards with two or more women conducted formal board-performance evaluations, compared with 49 percent of all-male boards.
- Around 86 percent of female board directors and 82 percent of minority directors are "independent," coming from outside the company's highest ranks, compared with 70 percent of directors overall.
The key to boardroom diversity, says Rakesh Khurana, is to attract several women and minorities with different experiences and opinions. If you just have a token sole female or minority, he or she is more likely to embrace the thinking of the dominant group, explains Khurana.
Source: Carol Hymowitz, "'Glass Ceiling' Barely Shows A Crack in U.S. Boardrooms," Wall Street Journal, July 2003.
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