Board Diversity Progress Measured by Calendar, Not Clock

by Gary Larkin for The Conference Board  – Governance Center Blog, December 3rd, 2010.

Let’s face it. Real progress can’t be measured in seconds, minutes or days. When it comes to diversity of public company boards, you would be looking at years or decades. If progress is defined as moving forward to another phase, then U.S. public companies may actually be making someprogress in the area of board diversity.

The markers I use to measure such progress are the following:

  • Agenda, a Financial Times electronic newsletter, has published its first-ever directory of 100 director diversity candidates called The Diversity 100.
  • The 2010 U.S. Directors’ Compensation and Board Practices Report published by The Conference Board Governance Center is measuring diversity and minority representation as a total of the total board makeup opposed to the 2008 report that only asked if a board had at least one member of a minority group (i.e. women, academics, non-U.S. professionals, African-Americans, and Hispanics). By the way, the report found about 15 percent of board members in financial services are women.
  • A survey of proxy statements of the Dow 30 disclosures on board diversity and director qualifications by Davis, Polk & Wardwell LLP that was published in the Director Notes report Board Diversity and Director Qualifications in August showed that 56 percent of those companies included gender in their definition of diversity while 41 percent included race.

Unfortunately, when it came to actually having a written diversity policy for director composition there is a lot of work to be done. In the 2010 Board Practices Report that was sponsored by Deloitte LLP and done in collaboration with the Society of Corporate Secretaries and Governance Professionals, of those financial services companies with more than $100 billion in assets none of the respondents had a policy. That study was based on a survey of 279 corporate secretaries in May and June 2010. (continue reading… )

 

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