REDWOOD CITY, CA (March 8, 2022)— The percentage of women on Russell 3000 boards increased from 26.1% to 26.7% during Q4 2021, according to the latest Equilar Gender Diversity Index (GDI). As a result of the slight growth, the needle on the GDI inched from 0.52 to 0.53 in the last quarter, where 1.0 represents complete gender parity on Russell 3000 boards of directors.
The progress of gender diversity on boards in recent years can be attributed to several factors. Most notably, the increase is due to the accelerating pace at which women fill open board seats. During 2021, 45.5% of open board seats were filled by women, up from 21.4% in 2016. At the current rate of growth of women on boards, Russell 3000 boards would reach gender parity by 2032. While this pace remained consistent since 2020, it has slowed—from 2016 to 2019, the anticipated date of parity decreased from 2055 to 2030.
As companies address the gender gap in the boardroom, it has become more evident that boards are looking outside of the traditional pool of candidates. “Boards are less frequently insisting on recruiting only from the ranks of CEOs and CFOs and instead are building boards with diverse sets of experiences to bring new lenses to the boardroom discussion, such as technology, culture, ESG, talent, crisis leadership, and public policy expertise, among others,” said Susan Angele, Senior Advisor of Board Governance at KPMG’s Board Leadership Center.
The Q4 2021 GDI also revealed that 103 companies have achieved equal representation of male and female directors. While this is still a meager figure in the grand scheme of the Russell 3000, it is a vast improvement from the 21 companies to have achieved this feat in Q4 2016. All-male boards also fell from 96 to 80 during the past quarter. As key stakeholders keep a close watch on diversity efforts, companies with male-dominated boards will certainly have to address the discrepancy going forward.
“These companies should prepare to explain the lack of female directors to their shareholders this coming AGM season,” said Brigid Rosati, Managing Director, Business Development and Corporate Strategy, at Georgeson. “Many of these companies will be deemed laggards and likely receive shareholder opposition to directors on the nominating committee.”
Read the full Q4 2021 Gender Diversity Index for more findings and commentary.
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