Pull Up a Chair: Why Women in the Boardroom are Good for the Bottom Line…and as Mentors for Girls
As the year draws to a close and Wall Street takes stock, the good news is that women currently hold a record number of corporate boardroom seats.
The bad news is that number represents only a little over 25% of all board seats.
What’s worse? Even more disheartening – the next generation is aware.
As girls visit boardrooms through mentorship platforms like Être, their hands immediately go up to ask profound questions, wondering aloud why more women aren’t on boards, why boards aren’t more diverse in general, and what young women about to enter the workforce can do to change the situation.
Great questions from smart girls, and we broke some down here.
How many board seats are filled by women today?
The quick answer - not enough. While progress is being made – according to the 2022 Gender Diversity Index Report issued by 50/50 Women on Boards and Equilar, women hold a record 28% of all board seats on the Russell 3000 index of the largest U.S. publicly traded companies – that progress has slowed down. Indeed, the report notes that in the first six months of 2022 the number of new board seats filled by women dropped 8% compared to the six months prior.
Um…okay. So why aren’t there more women on boards?
That question is ringing in all of our heads. ”It remains hard for women to join corporate boards,” explains founder of The Fourth Floor and board diversity expert Breen Sullivan to girls in The Epic Mentor Guide, “because boards…are still largely male and white, and board seats are primarily filled by networking.”
How do we even start that kind of networking?
“We don’t often hear about them,” continues Sullivan, “but advisory board positions and smaller for-profit board seats lay the foundation for the kind of networking, professional advancement, and for-profit board experience that women need in order to access the larger, sought-after corporate board opportunities down the road.”
What about overall diversity? Why aren’t more boards focusing on that?
Why indeed. In a recent study examining the link between companies with “multi-dimensional board diversity” and the correlation to company revenue, the non-profit organization BoardReady reported that companies in the S&P 500 with board diversity across gender, age and race outperformed their peers both during and after the pandemic.
And yet, racial diversity in particular shows alarmingly slow growth on boards. Earlier this year Equilar issued its first survey analyzing the racial breakdown of boards for Russell 3000 companies, and found that only 6.2% of directors are Black, 5% of directors are of AAPI descent and 2.7% of directors are Hispanic.
Who else is focusing on this?
Some states like California have tried requiring a minimum number of women on boards, and rules like those implemented this fall at Nasdaq will encourage U.S. companies to have at least two board members that identify as women or other under-represented groups.
What can we do to change this…even at an early age?
A lot! Breen Sullivan offers good advice when she suggests nabbing board responsibility at smaller orgs before trying for large public company board seats, and we can extend her logic even further.
Specifically, next gen girls can:
Join the board of your favorite club or community association. Whether a junior Board of Directors or a Teen Advisory Board, most youth-focused orgs want feedback and input directly from their audience. Often this can mean a board seat, complete with titles, responsibilities and a global network of like-minded teens. Nothing gets you ready for weighing in on board decisions like making them early.
Visit a corporate boardroom – especially at a company you like! Their board doesn’t have to be in session for you to get a feel of what it’s like to be in that room, to meet one or two women who occupy those chairs and to test out speaking in a boardroom environment. Want a seat someday at that table? Pull up a chair early.
Finally, raise your voice in whatever room you find yourself – board or otherwise. I tell girls all the time to raise their hands – not just in the classroom, but in solidarity, in protest, to support or to volunteer - and the same thing applies to raising their voices. Good board members know that to be effective they must not only be able to listen well, but ready to speak up. In other words, practice being heard…now.
As more and more research comes to light reinforcing the fact that diverse boards lead to better results, smart companies are training their gaze on the next generation of leaders. Raised in an era that embraces diversity of orientation, race, gender, age and thought, tomorrow’s workforce is board-ready and brimming with ideas.
A new year will be upon us soon. Pull up a chair.
Looking forward,
Illana
