America is falling behind other nations in promoting women to the highest levels of corporate leadership and companies must take steps to boost the number of women on corporate boards to ensure that the United States remains competitive in the global economy. That is the central finding of our 5 years of research on Gender Diversity on corporate boards and c-suite positions. As a result of our findings, CED members and staff have been urging companies to expand opportunities for women and make it a priority to develop the talents and advance the careers of female staff who have been identified as potential leaders.
The reasons to promote greater female representation in corporate leadership positions is clear: Companies with greater board diversity typically outperform their less diverse counterparts because they better-connect with their constituents, employees, investors, and operating communities.
In an effort to accelerate progress for women in corporate boardrooms, CED launched the Every Other One initiative in 2014. Every Other One advocates that if every other corporate board seat vacated by a retiring board member were filled by a woman, while retaining existing female seats, women would occupy nearly a third of board seats in the next five years and ultimately reach parity.
CED Policy Recommendations
Voluntary Goal Setting and Disclosure: Rather than mandated government quotas, U.S. publicly traded companies should adopt a target of recruiting women in one of every two board seat openings due to normal retirements and existing female seats are retained. Boards should demonstrate responsiveness to stockholders, and they should meet with CEOs and nominating committees regularly to explain the benefits of gender-balanced boards.
Expanding the Criteria for Directors: Board-nominating committees and executive search firms typically have narrow lists of qualifications for directors. CED suggests that boards expand their criteria for candidates, which will open opportunities for women while improving the quality of boards in several ways. With these expanded criteria, female c-suite executives, divisional presidents, law firm partners, accounting firm partners, financial service executives, entrepreneurs, risk management professionals, foundation heads and university presidents would provide a deep pool of qualified candidates.
Provide Mentoring and Growth Opportunities: Businesses need to make it a priority to develop the talents and advance the careers of female staff who have been identified as potential leaders and must provide women with the experiences needed to rise to the top, advocating their promotion to higher levels of responsibility, and showing visible results of these efforts