Women hold 27% of S&P 500 board seats

But 329 smaller public firms still have all-male directors

When Kathy Higgins Victor first joined the board of directors at Best Buy in 1999, she was the only woman in the room. The former Northwest Airlines human resources chief and now president of a leadership coaching firm remembers how she “would say something and then there’d be silence,” followed by approval of a male colleague’s comments. She recalls thinking “Excuse me, was my mic off ?”

Then there was the time an executive presented unflattering data about how female customers experienced shopping at the electronics retailer — not being acknowledged, not being helped — and her fellow directors rejected it, saying “that could not possibly be true.” Victor, meanwhile, thought the data was “spot on.”

Twenty years later, Victor is no longer the lone woman in Best Buy’s boardroom — she’s also part of the majority. After new CEO Corie Barry was elected to Best Buy’s board at its June shareholder meeting, the retailer became one of just six companies in the Standard & Poor’s 500-stock index where women make up the majority of board members.

Since making a commitment five years ago to increase diversity — not only in gender and race, but in varying skill sets — Best Buy has added six board members, five of whom have been women. Four of the past five new directors have been people of color. “What I have seen is so much more diversity of perspective and such better decision-making outcomes,” said Victor, who also chairs the board’s nominating committee.

Though few boards have reached the same numbers, and the rate of change is still slow — Victor calls it a “glacial pace” — the percentage of women on boards has begun a steady march upward in recent years. The issue has grabbed the attention of investors, the media and lawmakers: The House Financial Services Committee even held a hearing in June about gender and racial diversity on boards.

After being stuck at 16 percent for several years, the percentage of women-held board seats in the S&P 500 now reaches nearly 27 percent, according to data from

ISS Analytics, the data arm of the proxy adviser Institutional Shareholder Services.

Perhaps most notable is that all-male boards among S&P 500 companies have become an extinct species — at least for now. In 2009, there were 56 firms in the S&P 500 that did not include any women. On July 20, Copart, an online vehicle auction company based in Dallas and the final holdout, added Diane Morefield, an executive with the real estate investment trust Cyrus-one, to its board.

Yet that swift fall among America’s largest publicly traded companies disguises the challenges still ahead.

Among smaller public companies, the all-male board is still alive and well. In the Russell 3000, an index that includes the 3000 largest U.S. public companies and reflects the broad-based market, there were still 329 companies without a female director as of July 15, according to ISS Analytics.

Watchdogs “call you out”

Meanwhile, recent research has shown that boards tend to practice a sort of “tokenism,” diversifying to a point where they meet what’s considered the norm and then appear to do less to raise the numbers. Another study from 2013 found that firsttime female directors — as well as minority directors — tend to receive far less mentoring about boardroom norms than white men, making other appointments less likely and shorter tenures by women or minorities more likely.

Gender is only part of the diversity battle. A 2018 report from Deloitte and the Alliance for Board Diversity found that minority directors, whether male or female, make up just 16 percent of Fortune 500 board seats. Gender diversity appears to get studied more frequently, perhaps because it seems more visible to researchers or clearer to track than race, which may not be as apparent from director bios or photographs.

Finally, some worry that so much emphasis on any link between gender diversity and financial performance could create heightened expectations. “What kind of pressure does that place onto shoulders of diverse directors?” said Aaron Dhir, a professor who studies corporate governance at York University in Toronto.

Though the shift in numbers may be progress, “it’s frankly shocking that it’s 2019 and we’re only reaching that milestone now,” Dhir said.

The uptick in recent years has been driven by a host of factors, from increased scrutiny by investors to the fear of being called out in the media or by an advocacy group.

“There are watchdogs that count how many women you have on boards or call you out if you have too few,” said Corinne Post, a management professor at Lehigh University who has studied the issue.

Other groups, such as TheBoardlist or the advocacy group Catalyst, have begun doing more to deliberately help match or refer women to board positions.

The number of proposals filed by shareholders on the topic of board diversity, meanwhile, has grown from eight in 2007 to 40 this year, according to ISS data. Major institutional investors have been talking about gender diversity in their voting guidelines: Blackrock has said it expects to see at least two women on the board, and State Street said it plans to vote against the entire nominating committee if the board remains all male.

Diversity improves performance?

Adding to the pressures, California passed legislation last year that will require public companies with their main offices in the state to eventually have between one and three female directors, depending on board size. A similar idea has been proposed in New Jersey.

Other experts attribute some of the growth to increasing attention on research suggesting a link between more diverse boards and business results. Groups such as Catalyst have published reports on the topic. Other studies from investment industry firms — as well as some academic or nonprofit papers — have also examined a link between diversity and things such as lower acquisition costs, fewer financial restatements, the likelihood of more women in the executive ranks or higher return on equity.

“I think norms would not have changed nearly as much if there had not been this drumbeat that gender diversity on the board improves corporate performance,” said Katherine Klein, a management professor at Wharton.

But Klein and other academics warn that the relationship between gender-diverse boards and financial performance is less clear than is sometimes touted in headlines. For one, they argue other explanations could be at play: Good financial outcomes could prompt boards to be more concerned about social norms and have more resources to then hire more female directors. Other variables, such as firm size, could also play a role.

Meanwhile, results from social science research is actually mixed, according to “meta-analysis” studies that review other research. One study found that the link between gender-diverse boards and financial performance “is inconclusive overall, with different studies finding positive, negative or no effects,” though more diversity was shown to be linked to more corporate social responsibility and ethical behavior.

Alice Eagly, a Northwestern University professor and a researcher on gender and leadership, said while there are good reasons to increase the number of women on corporate boards, the tie to better financial performance isn’t clear in rigorous social science research. “Women on boards are associated with enhanced social good,” Eagly said in an email. “This type of outcome of women in boards is far more reliable than improved firm financial performance.”