The representation of women on U.S. corporate boards has improved, but it would take decades to reach gender parity, according to a new report.
The U.S. Government Accountability Office (GAO) on Monday released a report that says women accounted for about 16% of board seats in the companies that made up the S&P 1500 in 2014, up from 8% in 1997. “This increase was partly driven by a rise in women’s representation among new board directors,” the GAO report says, with women accounting for 22.8% of new directors in 2014.
However, even if women were getting half of the new board seats that come available each year, starting in 2015, it could take more than 40 years for women to reach equality with men in the boardroom, the GAO report says.
The GAO report cites several factors that may hinder increased gender parity, including boards not prioritizing recruiting diverse candidates; a lack of women in the traditional pipeline to corporate boards; and, low turnover in boardrooms.
The GAO report does not make any official recommendations for improving female representation on boards, although it notes that several large institutional investors, and most of those interviewed for the study support improving disclosure requirements regarding board diversity.
Many major investors questioned the usefulness of information that companies provide under the U.S. Securities and Exchange Commission’s (SEC) existing disclosure requirements, the GAO report says. “Consequently, these investors petitioned SEC to require specific disclosure on board directors’ gender, race, and ethnicity. Without this information, some investors may not be fully informed in making decisions,” the GAO report says. “SEC officials said they plan to consider the petition as part of an ongoing effort to review all disclosure requirements.”
In Canada, the Ontario Securities Commission (OSC) has also been leading a drive to improve board diversity by introducing new disclosure requirements, which have also been adopted by several other provinces.