It took over 20 years for the last few companies on the index to appoint at least one female director
The last all-male board in the S&P 500 has finally added a female director.
Last week, Copart Inc. appointed CFO Diane Morefield to its board of directors, reported Bloomberg. Earlier this year, Skechers and TripAdvisor Inc also added women to its boards.
However, the final stretch of progress has been slow.
In 2000, about 86% of S&P 500 companies had at least one woman on their board according to Spencer Stuart. The last 14% of companies have taken almost 20 years to close the gap.
Gender balance at the board level has long been a focus for activist investors, but the cause got new momentum with State Street Corp.’s Fearless Girl campaign in 2017. Following the campaign, several US states pushed for bills to enforce gender diversity.
Advocates still say it is ideal to have at least three female directors. Big investors like BlackRock Inc. and State Street say board diversity is linked to better returns and in the past few years have begun to ask male-dominated boards to explain themselves.
READ MORE: 10 worst excuses for excluding women from boards
Over in Singapore, the Diversity Action Committee (DAC) had revised the Code of Corporate Governance to offer opportunities for greater board diversity. The DAC aims to increase women’s participation on boards to 20% by 2020, 25% by 2025, and 30% by 2030.
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Among the top 100 companies in Singapore, the number of female directors stood at 13.1% in 2018.
“The numbers are encouraging,” said DAC chairman and head of the SGX, Loh Boon Chye. “Boards of leading companies are paying attention to the benefits that diversity brings.
“With our large companies leading the way, DAC is ambitious for the other companies too, to make appointments that will strengthen their boards and the resilience of their strategies.”
New board seats, however, were still mostly filled by men: 70% for the top 100 primary-listed firms and more than 80% for all SGX-listed companies.
At a Women’s Day event this year, Singapore’s Minister of Manpower shared her thoughts on why the issue persists despite the industry’s best efforts.
“My observation is when appointing people to boards, there’s a tendency to say, ‘who do we know out there?’” said Josephine Teo. “Therefore, they look at other boards and then say, ‘oh, this one – he/she suits our purpose, so how about we put them in too’.
“So it’s not particularly, deliberately biased, but there is just this sense that, ‘let’s go for someone familiar…someone comfortable…someone who’s tried and tested’.”
The practice of wanting someone “tried and tested” on the board is very pervasive, she added. The minister understands why it persists – listed companies have governance rules, heavy responsibilities and liabilities that the directors are required to meet.
“Having someone ‘tried and tested’ gives you the sense of comfort that when you go to the annual general meeting, you don’t have to explain why this person is on the board,” she said. “[But] this is something that we have to try and overcome.”