Gender and Board Decision Making

Many have been saying that this year’s election is about gender – because there are big divides about who women and men are voting for.

This relates to another important gender issue – the presence of female leadership (CEO and the C-Suite) and its effect on corporate governance policies, decision making and board composition. These topics are interconnected. Research shows that when multiple women serve on a board the degree of influence they have on strategic decisions made by the board also increases. Such strategic decisions include the critical issue of how to comprise the board itself but also to issues about pay and who chairs various influential board committees.

Studies have also shown that companies with women in key leadership roles exhibit higher board diversity. The presence of women in these roles also correlates with a higher percentage of gender-balanced boards. According to the 2024 Gender Diversity Index of Russell 3000s companies across the United States, having a woman serving as CEO results in 41.5% female board representation, including 10% women of color. It also results in 39% gender-balanced boards. According to this same report, at the national level, when women hold all three leadership roles (i.e. CEO, Board Chair, Nom/Gov chair), nearly 50% of board seats are occupied by women (49.1% of board members are women). Over the years, U.S. companies with three or more women have increased substantially from 21.5% in 2019 to 44.4% in 2024.

Not all states are the same however, as we know from politics. Nine states—California, Massachusetts, Illinois, Minnesota, Washington, Connecticut, Michigan, Wisconsin, and Missouri—now boast more than 30% women on boards, up from only four states just last year. All business sectors have more than 25% women on boards, and five sectors have more than 30% women. The Utility sector leads the way with 36%, while the Energy and Financial Services sectors remain the least diverse and have the fewest gender-balanced company boards.

According to global Deloitte’s Women in the Boardroom study in 2024, the figures for board chairs and CEOs, among more than 18,000 companies in the report, just 8.4% are board chairs and 6% are CEOs. According to the report – at this rate – parity will not occur until 2073 for chairs and 2111 for CEOs. In the realm of pay, it matters who chairs the compensation committee for decisions about pay equity. In the U.S, 27% of comp committees are chaired by women. But compare that to nearly 60% in the United Kingdom, according to Deloitte.

Looking forward, if U.S. companies were to increase both the seats held by women and those held by women of color to 2% annually, they would reach the goal of 50% women and 20% women of color on boards in a single decade. Not only does this reflect the U.S population but it’s about time.

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