Organizations will, therefore, need to work diligently to establish a culture that embraces the benefits of diversity and develop techniques to encourage the sharing and consideration of diverse perspectives. When they do, higher revenue and profitability often follow. A recent report by BoardReady found that companies with more than 30% of board seats occupied by women delivered better year-over-year revenue in 11 of the top 15 S&P 500 sectors than their less-gender-diverse counterparts. Fifty-four percent of these gender-diverse companies delivered positive year-over-year revenue in 2020 compared to 45% of the companies with lower gender diversity. Similarly, a recent Credit Suisse report found that companies where women made up at least 15% of senior managers had more than 50% higher profitability than those where women’s representation was less than 10%. This is precisely why companies such as Grant Thornton, AT Kearney and HP are creating their own programs to support women’s service on boards. Too often, board diversity initiatives are side programs led by external stakeholders. To be effective, existing board members, together with the CEO of the company, must be intentional and actively engaged to bring more women to the table and foster their development as leaders. Accelerating board diversity requires bold action from a range of stakeholders. Below are pragmatic steps each group can take to help advance diversity: What Corporations Can Do to Further Encourage Diversity:

• Sponsor and advocate for rising woman leaders, including diverse women. One inroad to building a robust pipeline of future women leaders is to develop and mentor women and women of color earlier in their careers. At Upwork, for example, the company’s BetterUp Leadership Program gives visibility on the areas in which leaders are thriving and those that present the biggest opportunities for growth. The program focuses on the whole person, supporting its leaders’ personal and professional development. Leaders are matched with a specialized coach that helps them craft tailored goals and action plans.
• Similarly, at Hewlett Packard Enterprise, CEO Antonio Neri has implemented a talent review program that evaluates and develops talent across the enterprise and provides rotation opportunities. This enterprise-wide mindset and process drives visibility for high-potential women leaders across HPE. The Ready Now program was spearheaded by the Board to prepare high-performing women who are senior level leaders—but not necessarily C-suite yet—to occupy Board seats. The program has been so successful that HPE’s 2022 cohort is being expanded to go beyond women and include other diverse groups.
• Make Board openings more transparent through promotion of the roles and enlist professional associations or affinity organizations for help to identify diverse board candidates.
• Consistently measure results and report on the company’s workforce and board diversity progress.
• Recognize subconscious and unconscious bias, racism, or practices that discourage women of all races to advance in their careers and provide training.
• Expand and/or create flexible work environments to retain women, including women of color.

What Women Can Do to Claim Their Seat at the Table:

• Create shareholder and stakeholder value. That board seat on your local nonprofit may be an easy director appointment to come by, but does it best serve your long-term professional aspirations? Instead, challenge yourself with mission-critical and high-profile assignments throughout your career, particularly those with P&L responsibility, to demonstrate your readiness to lead.
• As you consider new opportunities, perform diligence around whether your current our future employer supports senior women occupying board positions and/or has programs to develop their senior women and help them to get on boards. If not, be sure to invest in yourself, and add value to your company, by asking your employer to fund programs that advance your career.
• Find a more senior champion (male or woman) who can help you advocate for yourself and expand your network with introductions.
• Advocate for, and mentor, other women, including women of color.
• Actively engage with organizations, such as those listed in the Resource Guide (beginning on page 41), whose educational programs and resources strategically accelerate women, including women of color, to leadership positions and boards.
• Self-identify your race, ethnicity, gender to help push boards to disclose diversity reporting.

How Men Can Be Allies and Promote the Advancement of Women:

• Embrace cognitive, skill set and demographic diversity.
• Today, diversity can be a key competitive advantage, directly impacting a company’s bottom line. Beyond demographic diversity, encourage the recruitment and advancement of candidates who add new professional backgrounds, skills, and experiences that help meet the company’s strategic and operating needs; and introduce new views, perspectives, and approaches to problem solving.
• Actively mentor, sponsor and promote women, including women of color, to leadership positions.
• Recruit women, including women of color, to lead high-profile projects.
• Identify unconscious or direct biases and address them.
• Call upon women, including women of color, in open discussions to create an environment that encourages collaboration, and actively listen and implement their recommendations.

The pooled data showed that the surveyed boards had about a quarter of woman directors and a quarter of women in board leadership roles. Segregating the data in various ways illuminates some stark differences between the gender of the senior leadership (CEO and Chairman) and how it impacts gender diversity and women in board leadership roles. In looking at the data, we observed the following key themes:

• Women Chairs had the biggest impact on gender diversity and women in board leadership roles. Despite the CEO’s gender, boards with a woman Chair had more woman directors and more women in leadership roles than boards chaired by men
• Those boards with a woman Chair and CEO had the biggest impact on the number of woman directors and women in board leadership roles.Boards with a woman Chair and CEO had more woman directors and more women in leadership roles than any other senior leadership combination
• Boards with a woman Chair and male CEO, a kind of gender balance in and of itself, had the greatest incidence of gender balance, with three or more women on the board. 53% of boards chaired by a woman and male CEO had gender balance, meaning three or more women on the board, compared to only 32% of boards with a woman CEO and Chairman

Impact of Gender of Senior Leadership (CEO and Chairman) on Board Diversity

Based on the results of this survey, there is a strong correlation between the Chair’s gender and board diversity. While no board achieved full gender parity, meaning 50% men and 50% women, those boards with a woman Chair had 42% women directors, compared to 24% women directors on those boards chaired by men. Additionally, boards with woman Chairs, regardless of the gender of the CEO, had a significant number of women serving in leadership roles (60%), compared to 27% of women serving under a male Chairman. Looking at the data segmented by the gender of the senior leaders (CEO and Chairman), there was almost no difference between the percentage of women serving in board leadership roles with a woman Chairman. There was, however, a fairly large difference when comparing the percentage of women in board leadership roles with a male Chairman.

In 2020, Latinos held 4.1% of Fortune 500 board seats compared to 82.5% White, 8.7% Black, and 4.6% Asian (AAPI). By 2021, 31% of Fortune 1000 companies had a Latino on their board of directors, compared to 13% a decade ago. Most of the progress has occurred in the last two years, with representation increasing by 8%, or a three-time increase in yearly progress made over the previous eight years.

Concerned by the lack of Latina appointments, Latino Corporate Directors Association (LCDA) evaluated research of the ethnic and racial composition of public company boards, and found that Latinas have lost ground with only a 0.2% increase in F500 board seatsfrom 2018 to 2020.

In 2018, California enacted SB826, the first state law mandating the addition of women to boards headquartered in the state. Although Latinos make up 40% of California’s population, the SB 826 mandate did not result in the addition of Latinas to California public company boards. After reviewing all women appointed to California public company boards, LCDA revealed Latinas were least represented with only 3.3% of women appointees

Through the delivery of premiere data and research, LCDA eliminates the excuse that board-qualified Latinas cannot be identified. There is an ample supply of qualified and experienced Latina directors and C-level Latinas from an array of industry sectors. In 2021, LCDA directly and indirectly influenced a historic jump in Latino public company board appointments. Latina(o) appointments increased nearly 4 times from a total of 93 in 2020 to nearly 347 in 2021 – 42% of those 2021 appointments went to Latinas.

Nationally, Latinas comprise nearly 10% of the total U.S. population, but hold only 1% of Fortune 500 board seats. LCDA believes it is critical that public company boards include Latinas(os), and is committed to serving as a resource for research and talent through our network of accomplished executives at the highest levels of corporate leadership.

As the nation’s largest ethnic group, Latinos accounted for 51.1% of the country’s demographic growth over the last decade, with the total population growing to 62.1 million, which is almost 20% of the U.S. population, according to newly released data in the 2020 Census.

These numbers reflect a massive and growing Latino market, with the Latino GDP growing 72% faster than non-Latino GDP from 2010-2018. At a time when diversity is recognized as a business imperative, companies would be wise to tap qualified Latinos for their boardrooms.

Companies that do not capitalize on the value of a Latino perspective are missing out on market share, according to the Latino Donor Collaborative (LDC) Facts Poster and U S Census Bureau:

This diversity is fostering higher levels of collaboration, creativity, and innovation. As the nature of work changes, though, and all organizations must rely on digital technologies to both operate and grow, board directors must understand the inherent risks at a systemic level.

The ability of corporate boards to govern digital and cyber risk has not increased meaningfully.

However, momentum is starting to grow in transforming global digital and cyber governance worldwide. Proposed Senate Bill S 808, The Cybersecurity Disclosure Act of 2021, would require U.S. public company boards to disclose cybersecurity experience or expertise in the boardroom. A similar disclosure standard was implemented in 2002 related to director financial expertise through the regulation known as Sarbanes-Oxley.

The MIT Sloan Center for Information Systems Research found companies with boardrooms that have a critical mass of at least three digitally savvy corporate directors have significantly better business results, including 38% higher revenue growth, 17% higher profitability, and 34% higher market capitalization growth. Digital leadership in the boardroom has a positive business impact, and so does boardroom gender diversity.

In addition to some boards augmenting their ranks with digital diversity, leading digitally savvy boards are forming technology and cybersecurity committees. They also understand, govern, and disclose more detail on the systemic cyber risks and the breadth and depth of threats facing their companies and business value creation.

The energy and focus on digital and cyber risk governance is starting to mirror the early stages of the movement to improve boardroom gender diversity. Combining these intensifying boardroom developments with the ongoing advancement of gender diversity can not only accelerate the need to significantly improve digital and cyber risk governance in boardrooms worldwide, but can also transform the future of business with digitally savvy women corporate directors leading the way.

IDC and the World Economic Forum project that over 60% of global GDP will be digitized by the end of 2022. People worldwide are experiencing digital transformation first-hand as the adoption of modern information and communication technologies (ICT) like the smartphone, have been far faster than prior advancements in similar consumer information technologies. Ongoing advancements with IoT, AI, and many other ICT technologies and applications will continue to prime the pump for disruption, while further anchoring our digital dependence.

As the promise and potential of the digital future continues to work through its growing pains, its dangers are on full display. Attackers freely exploit weaknesses in digital systems and capitalize on the far-reaching damages that they can inflict almost at will.

Attackers are growing more sophisticated and include nation-states and well-organized, resourceful, and persistent amateur and professional groups. Industry reports project that cybercrime will cost the global economy USD $10.5 trillion annually by 2025, making it the equivalent of the third-largest economy in the world, behind the U.S. and China.

These challenges demand a high level of attention in corporate boardrooms worldwide and present an opportunity for women technology leaders to step up to the challenge. Not only will this broaden the pool of women leaders who can contribute in the boardroom, it will deepen the skills and competencies of the boardroom in an urgent and critical area. Moreover, it will position women in the boardroom to lead on digital transformation and cyber risk oversight, two issues vital to the future of business.

The next chapter of business runs through complex digital business systems. Gender and broader boardroom representation will continue to improve worldwide. What better way to advance both issues and to increase influence, than to combine the two?

Uniting gender and digital diversity in the boardroom not only has the potential to transform corporate governance, but also to reshape the future of economies, societies, and businesses, with digitally savvy women in the boardroom leading the way.

As shown above, for every nontraditional discipline aside from sales and legal in 2021, the majority of new nontraditional director appointments are women.

The percentage of new technology appointments who are women has moved from 53% in 2019 to 58% in 2021 The percentage of new appointments with marketing experience who are women has stayed above 50% since 2019.

Meanwhile, women represent the vast majority of new director appointments with HR and ESG backgrounds For new director appointments with HR backgrounds, women accounted for 83% in 2019 and 72% in 2021 The proportion of new appointments with ESG backgrounds who are women has been steadily rising over the last two and a half years, increasing from 64% in 2019 to 84% in 2021

In examining the data, we observed:

The global pressures on companies to increase the gender and ethnic diversity of their boards has, perhaps unintentionally, impacted director skill set diversity.

Since so few women and ethnic minorities have held roles as CEOs, CFOs, or COOs of major listed companies, as companies recruit and appoint women and ethnic minorities to their boards, they are also onboarding more directors from nontraditional professional backgrounds.

Further, there is a trend towards increasing diversity in the nontraditional backgrounds of woman directors, which may point to boards becoming more inclusive In the past, boards have responded to calls for increased gender diversity by looking to add directors with backgrounds where women have historically held leadership positions, such as HR and Marketing.

The trend towards a more diverse set of nontraditional backgrounds suggests that boards are widening the aperture of competencies that they look for in woman directors.

This, in turn, is an early indicator that boards are becoming more inclusive, acknowledging the value of diverse opinions, not just trying to meet diversity expectations.

Although women held just 14.2% of all private company board seats, the women who sat on boards were three times as likely to hold seats as independent directors, compared to manager or investor directors.

The Role of Independent Directors on Private Company Boards

On private company boards, there exist three types of director seats: Management directors, (which tend to include the CEO or a member of the founding team), investors (who participated in a funding round for that business), and independent directors.

However, underrepresented groups continue to be overlooked for promotions and were not as frequently provided the opportunity to upskill, according to a recent article published by Society for Human Resource Management. The employer and employee relationship requires a shift in balance, so the future pipeline of women and men of color are provided the same opportunities to advance and to serve on boards.

3. The sectors more inclined to reach 50% women on boards by or before 2030 are not sectors with the largest market capitalization.

By the end of 2021, all sectors surpassed 20% women on boards. Sectors with more than 25% women on boards include all but two, Financial Services and Energy.

Utilities, Consumer Defensive, and Consumer Cyclical have nearly 30% or more women on boards and more than 10% of companies are gender-balanced, with Real Estate closely trailing behind. The companies with the largest market capitalizations, including Technology, Financial Services and Healthcare, added more women to boards than other sectors, but overall, the percentage of women on boards continued to lag.

To gain a holistic view of the progress made by women over the past year, Women Leading Boards, a special report from Women Business Collaborative (WBC) and 50/50 Women on Boards™ (WOB), assesses data from a variety of sources, including global benchmarks, the Russell 3000 Index (according to data provided by Equilar), the Fortune and S&P 500s, as well as privately held companies.

Women Leading Boards provides an update on progress made over the past year; explains the impact of the shift; shines a spotlight on areas in which greater focus is required; and offers best practices to ensure the voices of women who currently sit on boards are being heard.

The report includes the following sections and contributions:

• A Look at Progress Made in 2021
• How Can Corporate America Advance Gender Parity?
  Heather Spilsbury, COO, 50/50 Women on Boards™
• How CEOs Can Leverage Independent Directors to Bring More Women on Boards
  Bolster
• Expanding Skill Set Diversity in the Boardroom
  Diligent Institute
• How Women Technology Leaders Can Transform the Boardroom and the Future of Business
  Bob Zukis, CEO, Digital Directors Network
  Barbie Bigelow, CEO, Emerald Growth Partners, LLC
• Latinas are the Least Represented Group on U.S. Public Company Boards
  Latino Corporate Directors Association (LCDA)
• ‘Private’ No More: Gender Diversity Trends in Non-Public Companies
  Meghan Juday, The Lodis Forum
• Maximizing the Benefits of Board Diversity
• A Call to Action