Half of companies on the Russell 3000 Index (R3000) have no women directors or only one woman on their boards, according to this years Gender Diversity Index (GDI) published by 2020 Women on Boards, the national education and advocacy campaign whose mission is to increase the number of women who serve on corporate boards of directors. New IPOs are lagging even further behind, where 80 percent of the top 25 IPO companies in 2017 went public with no women directors or only one woman on their boards. Despite these disappointing findings, some progress has been made. Women now hold 17.7 percent of the board seats in the R3000, up from 16 percent last year.
Shareholders are paying close attention to this slow progress and registering their dissatisfaction with boards. They know that when women serve on boards, a greater return on their investment is highly likely, according to independent studies. The pipeline is overflowing with exceptionally qualified women, but corporate boards and search firms must look beyond their own immediate circles to find those women candidates, said Betsy Berkhemer-Credaire, CEO of 2020 Women on Boards.
2020 Women on Boards will share its 2018 research with over 5,000 attendees at its annual National Conversation on Board Diversity, on November 14th and 15th in cities across the U.S. The key findings of the 2018 GDI report include:
Big Companies Get It “ Small Companies Dont. The percentage of women directors among R100 companies is 25.3 percent. Among smaller R2000-R3000 companies its 13 percent, demonstrating that smaller companies are less diverse. In all, women hold 4,477 seats of the 25,250 board seats in R3000 companies, or 17.7 percent.
Women Directors Scarce in Half of Russell 3000 Companies. Forty-three percent of the R3000 companies have 20 percent or more women on their boards, up from 37 percent of companies in 2017, however half of the companies still have no women directors or just one.
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Women Gained Board Seats, Men Lost Them. Women gained 469 board seats (net) in 2018 while men lost 382 board seats (net) in companies that were on the R3000 in both 2018 and 2017. Sixty-three percent of the companies that added women did so by actually increasing the number of seats on their boards, rather than waiting for men to give up seats to make room for women directors.
Board Diversity at IPOs Continues to Disappoint. Women hold just 9.2 percent of the board seats in the largest 25 IPO companies in 2017, up from 8.2 percent women in 2016, but below the 4-year average of 9.4 percent. Twelve of the 25 companies went public with no women, and 80 percent went public with none or only one woman on their boards.
While we continue to see womens advancement to board seats in larger companies, smaller companies are not keeping pace, said Stephanie Sonnabend, 2020 Women on Boards Co-founder, Chair of the board, and lead researcher for the report. Clearly, our work is not done. We need to provide greater transparency so individual shareholders and institutional investors have the information they need to call upon companies to change.
The R3000 includes 3,000 public companies in the U.S. rather than just 1,000 in the F1000. 2020WOB analyzes and interprets trends from raw date received from Equilar, a leading provider of board intelligence solutions.
About 2020 Women on Boards: Founded in Boston in 2010, and now headquartered in Los Angeles, 2020 Women on Boards is the national campaign to increase the percentage of women on U.S. company boards to 20% or greater by the year 2020. Known nationwide for its research on the gender composition of corporate boards of directors, 2020 Women on Boards publishes its proprietary 2020 Gender Diversity Directory, which ranks over 3000 companies on a W (Winning) to Z (Zero) scale. The 2018 Gender Diversity Index, the complete Gender Diversity Directory and information on this years National Conversation on Board Diversity can be found on www.2020wob.com.