April 24, 2019

The Wall Street Journal – What’s Keeping More Women From Board Seats: Little Turnover

By Vanessa Fuhrmans

New data show average director stays in the role more than a decade, creating few openings for new blood

A stubborn paradox reigns across U.S. boardrooms: Companies are appointing more women to board seats than ever, yet the overall share of female directors is barely budging.

The reason isn’t the pipeline, say recruiters and researchers. It is that board seats rarely become available in the first place.

More than a decade typically goes by before a director leaves a board seat, according to a new study from the Conference Board, a business research group. Examining Russell 3000 companies, which represent the vast majority of U.S.-traded stocks, it found the average director stays in the job for 10.4 years and about a quarter of them step down only after 15 years.

The upshot is that boardrooms remain the preserve of older, mostly white men: Only 10% of Russell 3000 directors are 50 or younger, while about one-fifth are older than 70, according to the Conference Board study. Just half of all Russell 3000 boards made any director changes in 2018, and 20% remain all male.

The data highlight a boardroom convention that has gone largely overlooked as shareholder pressure grows on companies to add more diversity of experience and backgrounds to their boards.

While investors have pressed companies to bring more ethnic minorities onto boards, the more concrete measures have revolved around boosting the number of women. A number of big investors—including State Street Global Advisors and BlackRock Inc. —have pressed boards with no women to change faster, pointing to research that links greater female representation on boards with better shareholder returns. In some cases, they have withheld proxy votes for some directors standing for re-election on all-male boards.

California, meanwhile, became the first state last year to mandate women on boards, requiring companies based there to have at least one female board director by the end of 2019, and at least two by 2021.

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