Board "diversity's" 7-year low: Board of it.
"The share of board appointments going to women has declined steadily since 2021 and hit 7-year low in Q1 of this year, according to new report from 50/50 Women on Boards. In first 3 months of 2024, 30.7% of board appointments across Russell 3000 index belonged to women-- lowest share since 2017.
In 2021, women made up 45% new directors; in 2022, stat was 39% and in 2023 38%. This early 2024 measure of 30.7% (of a total of 587 seats) represents even steeper drop-off.
The 7-year low arrives as women still hold only 29.7% of board seats across the Russell 3000, a 0.3% increase from last year. Women of color hold only 7.8%. While there has been progress over past decade to diversify boards, that progress hasn’t achieved anything near parity.
Heather Marie Spilsbury Women on Boards’ CEO, identifies reasons for decline. Economic uncertainty leads companies to revert to existing networks rather than broaden board searches for wider pool of candidates, she says. Election years bring more risk aversion, she argues. Some boards lack clear succession plans, slowing down process of bringing on new directors, she says. Meanwhile, companies are watching wave of conservative legal efforts against corporate diversity and inclusion efforts. And California’s SB826, which required boards in that state to have at least three female directors, was struck down in 2022, eliminating a strong motivator for businesses to maintain board diversity.
Across the Russell 3000, 41% of companies still have boards with 2 or fewer women. And some of those businesses are clearly focused on other pressures; companies with less diverse boards were more likely to exit the Russell 3000 because of sales, mergers, or bankruptcies, the report found. The financial services sector was least diverse at the board level.
Expanding boards has led to the most successful diversification efforts; 87% of newly filled seats belonging to women were additions, not replacements."
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