There is now at least one woman sitting on every S&P 500 company board, and women made up 47% of the incoming class of new directors, the highest percentage to date.
That’s according to the 2020 Spencer Stuart Board Index, which is based on proxy statements filed by companies between May 24, 2019, and May 20, 2020.
After accounting for those gains, however, women still only represent 28% of all S&P 500 board directors, according to Spencer Stuart’s study.
Currently, the average S&P 500 board has just under 11 directors on it. But the average board only has three female directors.
But pressure from lawmakers wasn’t the only reason for the uptick in gender diversity.
“What we think really made an impact on increasing the number of women in the boardroom was pressure from institutional investors, and the promise of accountability and measurement from that audience,” said Julie Daum, who leads Spencer Stuart’s North American Board Practice.
That push will continue, but further gains may not come as quickly as advocates hope because board openings don’t arise that frequently.
There are, however, ways to boost turnover, such as setting term limits and mandatory retirement ages for directors and even increasing the size of a board by a couple of seats.
“It will be difficult for boards to make meaningful progress in improving diversity unless they embrace more frequent turnover,” Daum said. “It should be noted that year-over-year, we find that companies with new, independent directors and more significant diversity in the boardroom benefit from a business performance standpoint.”
When it comes to running boards, women are few and far between. Spencer Stuart, for instance, reports that among independent board chairs, only seven women — just 4% of the total — hold that title.
The gender diversity numbers are slightly better when it comes to the directors who run individual board committees (e.g., audit, compensation and governance). Spencer Stuart found roughly a quarter of S&P 500 board committee chairs are women.