The stakes are high for today’s public company boards. In an increasingly challenging regulatory landscape, they are being called upon to provide forward-looking strategic counsel and rigorous oversight, while facing greater public scrutiny from a variety of stakeholders and grappling with a volatile economic climate. A “check-the-box” compliance approach from directors who think, act and look alike simply will not meet the complex challenges facing today’s companies.
There is a distinct need for diversity in skill sets, expertise, experience and viewpoints on boards, driven by evolving strategic goals and market challenges. Board effectiveness demands robust debate in which norms are challenged and a breadth of perspectives inform board strategic discussions and actions. Indeed, a high-performing board is now, by definition, diverse.
In this report, Ernst & Young reviews the progress made to increase gender diversity on US corporate boards by comparing board composition of S&P 1500 companies at the time of the 2012 annual meeting to the 2006 annual meeting. The report focuses on a broad universe of companies to tell a more complete story since the boards of large companies tend to be more diverse. The report is also unique in that it looks at the roles women have once they join boards, and reviews the backgrounds and qualifications of women directors. Overall, Ernst & Young finds that the rate at which women are joining boards as a percentage of new board members isincreasing and that boards that already have at least one female director are most likely to add more.
