The number of women board directors on Fortune 500 company boards has increased over the past 10 years, but the rate of growth is sluggish, according to the 2005 Catalyst Census of Women Board Directors of the Fortune 500 released today. Catalyst, the leading research and advisory services organization working to build inclusive environments and expand opportunities for women at work, has monitored the progress of women in board director positions since 1995 and reports on trends in its milestone 10th anniversary report on women board directors.
In its 2005 Catalyst Census of Women Board Directors of the Fortune 500, Catalyst found that women held 14.7 percent of all Fortune 500 board seats, up from 13.6 percent in 2003 and 9.6 percent in 1995, when Catalyst began its census. The rate of progress over the past decade has been, on average, one-half of one percentage point per year.
“Our research reveals that if we continue at this pace, it could take 70 years for women to reach parity with men on corporate boards!” said Catalyst President Ilene H. Lang. “Increased globalization and shifting demographics dictate that diversity and the advancement of women on corporate boards are strategic business imperatives that 21st-century companies cannot afford to ignore.”
Key findings from the 2005 Catalyst Census of Women Board Directors of the Fortune 500 are:
The Good News
- Since 1995, the number of Fortune 500 companies without any women directors fell by almost 50 percent, from 96 to 53.
- The number of Fortune 500 companies that had 25 percent or more women board directors increased almost six-fold, from 11 in 1995 to 64 in 2005.
- Since 2003, the average number of board seats held per woman decreased from 1.4 to 1.3, indicating that more new women are being recruited into the boardroom.
The Bad News
- From 1995 to 2005, the average rate of increase in women’s representation on Fortune 500 corporate boards was, on average, one-half of one percentage point per year.
- At that rate of growth, it could take another 70 years for women to hold approximately 50 percent of Fortune 500 board seats and reach parity with men.
- Women hold only 14.7 percent of all Fortune 500 board seats.
- Women of color hold only 3.4 percent of all Fortune 500 board seats.
- One in nine Fortune 500 companies has no women on its board.
- Women on boards are significantly underrepresented as chairs of the most powerful board committees, including audit, compensation, and governance, which may exclude them from key leadership, agenda-setting, and decision-making opportunities.
“To ensure long-term sustainability and to represent all company stakeholders, corporate boards must adapt to today’s realities and anticipate tomorrow’s marketplace,” said Lang. “Companies must position their boards in the same way they position their businesses. Diverse boards yield a crucial breadth of perspective and expertise, provide role models for future talent, and promote good governance.”
Catalyst research reveals there are many qualified women in the pipeline who are excluded from the key leadership positions and development opportunities that lead to corporate board selection. Companies must, therefore, strategically and operationally address the issue of board diversity by assessing broader business needs and looking beyond the traditional candidates. More diverse representation on corporate boards requires direct commitment and intervention.
In its report, Catalyst suggests the following steps:
- Position the company for the future: Identify board diversity as part of the overall diversity strategy and a business priority.
- Understand the business case for board diversity: Recognize the advantages of more representative boards, including a greater diversity of thought, better stakeholder representation, increased independence and better governance, role models, and longterm sustainability.
- Shift the profile and broaden the field: Expand leadership networks to identify talented women in other industries and regions. Do not rely solely on the same sitting CEOs and traditional candidates.
- Expand leadership opportunities for women on boards: Appoint women to lead and serve on powerful committees, such as auditing, compensation, and governance.
- Commit to diverse slates and diverse outcomes: Acknowledge that the status quo is insufficient and direct action must be taken to recruit qualified women candidates.
- Seek critical mass and not tokenism: Understand the potential danger of marginalization and isolation when women serve solo on boards.
- Do not overlook women of color: Recognize that women of color represent a growing pool of talent and reflect the shifting demographics of the global marketplace.
DuPont and Heidrick & Struggles are the sponsors of the 2005 Catalyst Census of Women Board Directors of the Fortune 500.
FULL REPORT AVAILABLE AT www.catalyst.org.
Catalyst is the leading research and advisory services organization working with businesses and the professions to build inclusive environments and expand opportunities for women at work. As an independent, nonprofit membership organization, it conducts research on all aspects of women’s career advancement and provides strategic and web-based consulting services globally. With the support and confidence of member corporations and firms, Catalyst remains connected to business and its changing needs. In addition, Catalyst honors exemplary business initiatives that promote women’s leadership with the annual catalyst Award. With offices in New York, San Jose, and Toronto, Catalyst is consistently ranked No. 1 among U.S. nonprofits focused on women’s issues by The American Institute of Philanthropy.