(Originally published on LinkedIn)
There's good news and bad news about the gender diversity of corporate boards.
The good news: in 2016, nearly 40% of new directors at the nation's 100 largest companies were women, according to the EY Center for Board Matters. The bad news: the proportion of women-held directorships across a broader measure (the S&P 1500) grew by just 1% -- a rate of progress that, if it continues, will put gender parity out of reach for another 30 years.
Clearly, it's time to speed things up.
Today, women make up 50% of the workforce, and they earn more bachelor's and master's degrees than men. Women are critical stakeholders in every business in America, as consumers, employees, and shareholders. Yet they hold just 19.9% of board seats, according to Catalyst, which has tracked what it calls the "glacially slow" progress of women's representation on S&P 500 boards since 1995 (when women held fewer than 10% of all board seats).
Improving diversity and inclusion – on boards and across the corporate workforce as well – is not just a "nice to have" but a business imperative. Research is clear about the benefits that diversity brings to firms, in terms of better decision-making and better financial performance. Promoting a diverse and inclusive corporate culture is also just the right thing to do. That's why TIAA has made diversity and inclusion a corporate priority – and why I was pleased to join more than 100 of my peers in signing on to the recently launched CEO Action for Diversity and Inclusion™. The initiative is the largest-ever CEO-driven pledge to advance diversity and inclusion in the workplace.
One way that companies can powerfully affirm their commitment to diversity and inclusion – and also attract the talent that can drive superior long-term performance – is by having more women directors on their boards. TIAA's first woman board member was appointed in 1940, and while we still have work to do, we have been honored by The Women's Forum of New York as a corporate champion of gender-diverse boards. We believe the diversity of our boards is a strength that helps drive our success and enables us to better serve our clients.
Our experience at TIAA shows that getting more women onto boards doesn't happen by accident. Rather, boards must take a proactive approach that includes:
- Explicitly and proactively declaring their commitment to having a diverse slate of candidates to choose from when filling open board seats.
- Adopting clear processes and targets to ensure a diverse slate of candidates.
- Insisting that their search firms present expanded slates that include qualified women director candidates. A recent study showed that simply increasing the number of women candidates improves the chances that a woman will be selected to a board seat. To identify potential women directors, boards can ask their search firms to examine databases like the one created by The Women's Forum of New York, which lists CEO-sponsored, board-ready women. The Committee for Economic Development – whose Every Other One initiative aims to get corporations to replace every other retiring director with a qualified woman – also has a number of helpful resources on its website for identifying women candidates.
- Voluntarily report on their targets and progress against them.
Without focused and thoughtful action, we won't achieve gender parity in the boardroom for generations to come. We can't let that happen. Making corporate boards more diverse is simply too important to the vitality of individual companies – and to the competitiveness of our nation as a whole.