More than two years into a pandemic which has disproportionately impacted working women, progress toward gender equality in America's boardrooms continues to move ahead, albeit slowly.
The average percentage of women on the boards of America's 1000 largest public companies — the Russell 1000 — increased from 23.8% to 28.2% between 2019 and 2021, new analysis from JUST Capital reveals. It's an important milestone because scientific research has found roughly 25% is the tipping point at which minority groups can sway the majority.
"There has been a big push from the business community more broadly, including investors and regulators at the state level, to really actually see the needle move in terms of diversification," said JUST Capital director of corporate equity Ashley Marchand Orme.
That said, equal representation for men and women in America's boardrooms remains a far-off proposition. Just 3% of companies in the Russell 1000 had boards comprised of at least 50% female directors, up 1% in two years, JUST Capital's analysis revealed.
There is also growing evidence of a correlation between corporate leadership diversity and profitability.
Among S&P 500 companies headquartered in California, those with 30% or more women board directors had 29% higher revenue than those with less than 30% female board directors, according to a new research published Friday by the California Partners Project. Companies with higher gender and ethnic diversity among board directors also delivered higher year-over-year revenue growth than companies with all-male all-white boards.
The California Project partners with The Office of Jennifer Siebel Newsom to track progress towards board gender equity at California-headquartered companies.
The California courts have struck down two state laws mandating greater diversity on public company boards, but most experts agree the steady march towards gender equity will continue.
"Some of the improvements that have been made in terms of processes around bringing on new diverse talent – those processes aren't going to go away," said Marchand Orme. "People have made new habits on boards to consider more diverse candidates so I think that's certainly a plus."
The JUST 100 ranks America's largest publicly traded companies on ESG issues that define 'just' business behavior and reflect the priorities of the American public. Five of those companies lead on board diversity with 40% or more women and at least one board committee chaired by a woman: General Motors, Citigroup, Procter & Gamble, Nielsen and Merck. These companies also all have at least one board committee chaired by a woman and a dedicated board committee for environmental, social and governance (ESG) performance, three of which are chaired by women.
"Perhaps those companies are thinking a little bit more strategically about their role and how just they are in terms of their practices," said Marchand Orme.
For example, General Motors — where 58% of its board composed of women – women also chair the majority board committees, including the Risk and Cybersecurity committee, the Executive Compensation Committee, and the Governance committee. At Citigroup, which increased its gender board diversity from 50% in 2021 to 58% in 2022, at least one female board member sits on each of its six board committees including the Nomination, Governance, and Public Affairs Committee. Both companies are helmed by female leaders — General Motors CEO Mary Barra and Citigroup CEO Jane Fraser.
The April jobs report revealed some positive movement for women across the U.S. workforce. Of the 428,000 jobs added 65% went to women, according to the Bureau of Labor Statistics. Still there's a long way to go for women to win back the hard won gains towards equal representation in the workforce – of the 1.2 million jobs lost since the start of the pandemic in February 2020, nearly 7 out of 10 were held by women, according to the National Women's Law Center.
Having more women in leadership and on boards — who have the experience of being female and climbing the corporate ladder — is critically important to addressing the challenges women face throughout the workforce, but that mandate should not solely fall on their shoulders, said Marchand Orme.
"It's also important that companies don't solely look to women to lead on these issues," she said. "Those are things that, certainly, women can speak to, but that the full leadership within the company should really be invested in."