NEW YORK AND REDWOOD CITY, CA (March 14, 2017) — The KPMG Board Leadership Center and Equilar, the leading provider of board intelligence solutions, are partnering on a thought leadership series in 2017 to bring more awareness around the critical issues of corporate board composition and diversity.
“The partnership with KPMG underscores our efforts to provide comprehensive research and analysis on the changing boardroom landscape, particularly with respect to composition and diversity,” said Belen Gomez, Senior Director of Research and Board Services at Equilar. “Both organizations provide services to corporations of all sizes across business sectors, and therefore we share a common interest in bringing awareness to these issues from the top level down.”
“The correlation between diversity in the boardroom and strong financial performance is clear, yet the needle is not moving fast or far enough,” said Susan Angele, Senior Advisor, KPMG Board Leadership Center. “Given KPMG’s strong commitments to diversity and enhancing corporate governance, we look forward to working with Equilar on this important initiative.”
According to the Equilar Gender Diversity Index (GDI), a quarterly benchmark of women on boards, the percentage of females on Russell 3000 boards reached 15.1% in 2016, up from 13.9% a year earlier. While there has been progress on an annual basis, it would take until 2055 for boards to reach gender parity at the current rate of growth, the most recent report found.
A separate Equilar study found that just 12.8% of the S&P 500 disclose information about race or ethnicity in their board composition. Since there is not a requirement for board diversity disclosures, this information remains difficult to find and benchmark.
Gaps in board diversity underscore the focus from investors, boards and other corporate service providers to emphasize refreshment and succession planning. A recent KPMG global pulse survey found that 14% of 2,300 directors polled said they were not satisfied with the combination of directors on their boards, and nearly half of respondents, or 49%, said they were “somewhat satisfied.”
Meanwhile, respondents to the KPMG global pulse survey said robust board evaluations (87%) and a formal succession plan (77%) were the most effective ways to achieve better board composition, as compared to 22% who said age limits and 17% who noted expanding the size of the board as clearer paths to better composition.
“As the current and future needs of a company change, boards need to keep pace,” said Susan Angele. “Age limits, term limits and expanding the size of the board can be useful tools to open up space for new directors with different backgrounds and capabilities. But effective evaluations and succession planning are the best way to build and maintain a board that remains fit for purpose, high performing and committed to continuous improvement.”
To help support the efforts of those boards seeking diverse candidates for board succession, the Equilar Diversity Network (EDN) launched in 2016 within Equilar BoardEdge as the “registry of registries” for diverse director lists. Currently, EDN has more than a dozen partners featuring thousands of director candidates with diverse backgrounds, searchable within the BoardEdge database alongside more than 150,000 executives and board members.
The Equilar and KPMG partnership will include a quarterly webinar series as part of the Equilar Executive Network Series, in addition to articles in the Equilar Board Intelligence newsletter and the quarterly C-Suite magazine, designed to help board members understand and strategize director recruitment and succession planning.
The first installment of the webinar series, “Succeeding in Succession: Navigating Transition in Board Composition” will broadcast on March 30, 2017. The webinar will focus on how boards can develop recruiting and onboarding strategies that will maximize the ability of new directors to add value in the boardroom. KPMG is also a partner for “The Changing Face of America’s Boardrooms,” a recurring feature in C-Suite magazine that highlights the contributions of new directors who have joined their first boards.
About KPMG Board Leadership Center
KPMG Board Leadership Center champions outstanding governance to help drive long-term corporate value and enhance investor confidence. Through an array of programs and perspectives—including KPMG’s Audit Committee Institute and Private Markets Group, the WomenCorporateDirectors Foundation, and more—the Center engages with directors and business leaders to help articulate their challenges and promote continuous improvement. Drawing on insights from KPMG professionals and governance experts worldwide, the Center delivers practical thought leadership—on risk and strategy, talent and technology, globalization and compliance, financial reporting and audit quality, and more—all through a board lens. Learn more at https://boardleadership.kpmg.us/ .
Equilar is the leading provider of board intelligence solutions. Companies of all sizes rely on Equilar for their most important boardroom decisions, including 70% of the Fortune 500 and institutional investors representing over trillion in assets. Equilar offers data-driven solutions for board recruiting, executive compensation and shareholder engagement that bring together business leaders, institutional investors and advisors to drive exceptional results while ensuring sound corporate governance. The Equilar suite of solutions includes industry-leading board education symposiums, comprehensive custom research services and award-winning thought leadership. Founded in 2000, Equilar is cited regularly by Associated Press, Bloomberg, CNBC, The New York Times, The Wall Street Journal and other leading media outlets. Learn more at www.equilar.com.
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