The Rising Importance of Board Diversity

May 20, 2019
Mergermarket and Toppan Merrill

Public companies are increasingly putting a high priority on gender and racial diversity - especially on their boards of directors.

Many prominent shareholders, such as institutional investors and private equity firms, are putting pressure on the companies they own to report on the diversity characteristics of their board members and to increase the number of women and other groups on their boards. And many companies are responding to this pressure, creating roadmaps to improve their board diversity.

Yet significant barriers remain. One obstacle preventing an increase in the number of diverse board nominees is the common preference for the CEO experience - few women and other minorities have held such positions in the recent past. Another important issue is the slow turnover among board members: the average tenure of a board director at a Russell 3000 company is 10.4 years, according to a recent study by the Conference Board. 

Nonetheless, progress is gradually being made, especially in the area of gender diversity. The percentage of women on the boards of Russell 3000 companies grew to 18.5% in 2018, according to research by Equilar.

How exactly are companies currently approaching the issue of board diversity? And what are the biggest challenges they face in improving the diversity of their directors? We spoke with three leading experts as well as one public company executive to find out. 

Continue Reading "The Rising Importance of Board Diversity."

Source: Mergermarket and Toppan Merrill