Story at a glance
- A new report reveals the pace of women joining corporate boards has slowed in 2022, declining by 8 percentage points in the first six months of the year.
- Nearly two-thirds of the board seats held by women were also added, not requiring a man to leave or replacing a man either.
- Though women now hold 28 percent of the country’s corporate board seats of the Russell 3000 Index, only 6 percent are held by women of color.
Women in the U.S. experience a serious wage gap and now they are also less represented in corporate America, with a new report revealing 2022 saw a drop in the percentage of new board seats going to women.
The pace of women directors joining corporate boards has slowed this year, declining by 8 percentage points in the first six months of the year, compared to the last six months of 2021, according to a report by 50/50 Women on Boards, an advocacy group for gender balance and diversity on corporate boards.
Nearly two-thirds of the board seats held by women were also added, not requiring a man to leave or replacing a man either.
That’s in addition to the Department of Labor revealing that women are paid on average 83 percent of what men are, with women of color only earning about 57 percent of what white non-Hispanic men earn.
There are some industry sectors where women are more represented, with utilities, consumer cyclical, including automotive, housing and entertainment industries, and consumer defensive, companies in manufacturing of food, drinks, household and personal products, all exceeding 30 percent women on their boards.
Energy has the least percentage of women on boards at 23 percent and financial services, which is the largest sector with 514 companies, has little less than 5 percent gender-balanced boards.
Though women now hold 28 percent of the country’s corporate board seats of the Russell 3000 Index, 6 percent going to women of color, the pace of diversity has been slow.
“At the current pace, U.S. companies would not reach gender parity of diversity on boards for another decade,” said the 50/50 report.
Diverse boards are critically important, advocates say, as they can reflect an enlightened organization and can solve many issues companies face, like economic, environmental and social shifts.
Harvard Business Review has also noted that having women on boards results in better acquisition and investment decisions and in less aggressive risk-taking, which can yield benefits for shareholders. One potential reason for that: having female board members helps temper the overconfidence of male CEOs which can improve overall decision making for a company.
Some states are taking the issue head on, like California which passed a corporate board gender diversity law in 2019 that required more women directors on the boards of publicly held corporations —no later than the close of the 2021 calendar year.
The law required corporations to increase the number of women on boards depending on the makeup of its directors, if the corporation has five directors, at least two must be female. If the corporation has six or more directors, at least three must be female.
Thanks to that law, 50/50 found California is now leading the way nationally with 34 percent of boards including seats held by women — a nearly 5 percent increase from 2021. Washington state is following closely, with 30 percent of women on boards.