- Women hold one out of every five seats on corporate boards for the country’s 3,000 largest publicly traded companies, according to new data cited in The Wall Street Journal.
- After the #MeToo movement, companies fired many powerful men in business for sexual harassment charges.
- Research suggests diverse teams perform better than homogeneous ones.
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America’s largest companies are now powered by more women than ever before.
Women hold 20% of seats on corporate boards for publicly traded companies, The Wall Street Journal reports. The figure represents a jump from 2016, when women held 15% of corporate board seats, The Journal found, citing data from data firm Equilar.
Equilar analyzed corporate boards of companies on the Russell 3000 index, which measures the performance of the 3,0000 largest publicly traded companies measured in the US.
The Fortune 500 also recorded gains for women on corporate boards. Of the 462 leadership positions at major companies filled in 2018, 183 went to women – and executive search company Heidrick & Struggles even projects Fortune 500 boards will have equal number of men and women on boards by 2023.
California might have something to do with the shift. Last year, the state required its companies to have at least one woman on their board of directors by the end of 2019, and at least two female directors by the end of 2021.
The last company with an all-male board in the S&P 500 added a woman to its ranks this past July.
Causes and implications
After the #MeToo movement, women in business revealed the persistent culture of sexual harassment among mostly-male corporate leadership. Many CEOs were ousted in the wake of last year’s movement, in addition to partners and other company employees.
Increasing the gender representation on these boards stands to improve outcomes, as the research suggests that more diverse teams make better decisions. Gender and racially diverse teams reexamine facts, better process information, innovate more often, and remain objective more often than monolithic boards, according to the Harvard Business Review. Tufts University psychologist Samuel Sommers even found racially diverse juries raise more case facts and made fewer factual errors than all white juries.
Unfortunately, racial minorities haven’t seen the same increases as women. Eighty percent of new Fortune 500 board members were white in 2018. Minority women took just 6% – or 71 total seats – in the nation’s top 100 companies, according to a Deloitte analysis.