The proportion of women nominees for the boards of large cap companies in the U.S. reached an all-time high in 2014, according to new research by proxy advisory service Institutional Shareholder Services.
An ISS report, “Gender Diversity on Boards: a Review of Global Trends,” illustrates that board diversity is steadily increasing year-on-year. In 2014, nearly 30 percent of new board nominees at S&P 500 companies were women, up from 15 percent in 2008. New nominees to Russell 3000 companies were 22 percent female in 2014, up from 11 percent in 2008. In terms of sitting directors, women comprise on average 18.7 percent of S&P 500 boards thus far in 2014, up from 16.3 percent in 2011.
The report draws upon ISS QuickScore data, which tracks gender, tenure, and other director characteristics across 4,100 companies in 25 markets.
“While women still make up less than 20 percent of U.S. boards on average, movement toward greater gender parity is evident with the proportion of new nominees that are women nearly doubling over the past seven years at larger firms,” Edward Kamonjoh, ISS’ head of environmental, social, and governance research, said in a statement. “Investors' calls for greater gender diversity appear to be nudging nominating committees to find more women to serve on boards at U.S. firms.”
The report analyses 24 industries in the Global Industry Classification Standard (GICS). The Household Goods and Personal Products industry consistently had the highest proportion of women on boards of S&P 500 companies, averaging 33 percent. Other industries that topped the list for female representation on boards include food, beverage, and tobacco (21.2 percent), media (19.6 percent), health care equipment and services (19.5 percent), food and staples retailing (19.5 percent), retailing (18.6 percent), insurance (18.5 percent), banking (18.4 percent), and telecom services (16.3 percent).
Globally, boardroom diversity is increasing as well, ISS says. In looking at countries without quotas to increase women on boards, female representation has increased measurably. Female representation on boards of the London Stock Exchange FTSE 350 firms grew to 18.5 percent in 2014 (up roughly 8 percentage points from 2008), while that for Canada’s TSX Composite index increased by roughly 4 percentage points to 14.6 percent.