Glass ceilings are shattering all over—except in the boardrooms of 76 U.S. public companies that have had no female directors for the entire past decade.
The protracted persistence of all-male boards emerges from an exclusive analysis for The Wall Street Journal by Equilar Inc. The governance researchers tracked the 1,500 largest Russell 3000 concerns without female board members in any of the past 10 years.
Mostly small, these firms often operate in male-dominated industries such as energy. Some serve individual consumers, including Skechers USA Inc. and Six Flags Entertainment Corp.
“I expected to see fewer companies with no female directors since 2006, given the focus and high level of scrutiny on gender diversity in corporate boardrooms over the past few years,’’ said Belen Gomez, Equilar’s director of research.
A recent survey of directors suggests that ignorance about the financial impact of board women may explain their absence from so many businesses for years. About 24% of men—compared with 89% of women—“very much” believe board diversity leads to improved business performance, concluded a recent survey of 884 public company directors by PwC U.S., a professional-services firm.
Over the past five years, U.S. companies that had at least three female directors in 2011 have financially outperformed those that had no board women in 2011, according to MSCI, an investment research firm. Its study, released this month, looked at return on equity and per-share earnings for 580 such concerns between 2011 and 2016.
As advocacy groups and public pension funds have prodded boards to pick more women, bigger businesses have made the most progress. Women held 20.6% of directorships at Fortune 500 companies this year, but just 16.7% of seats at the rest of Fortune 1000 firms, reports 2020 Women on Boards. The group aims to raise women’s board representation by 2020.
The campaign will now focus on “getting those bottom companies up,’’ said Malli Gero, its president. The group lobbies firms without female directors—including 12 on Equilar’s list.
Among them is Weis Markets Inc., a food-store chain with a five-man board. “Judging our company based on the composition of our board overlooks the bigger picture,’’ a Weis spokesman said. The chain has promoted and hired an increased number of women since 2006, the spokesman added.
Several companies without women directors since 2006 have faced criticism about various governance practices. At Skechers, which has nine male directors, investors this year defeated a shareholder proposal about board diversity. The measure sought multiple moves, including mandatory consideration of gender and racial diversity in identifying director candidates for the maker of casual shoes.
Skechers didn’t return calls for comment.
Nabors Industries Ltd. has lost five investor advisory “say-on-pay” votes about executive compensation since 2011. But a woman may soon join the board of the oil drilling company. With one of its seven members retiring next year, the board has set a goal of “identifying a qualified female director,’’ said Julia Wright, Nabors’s general counsel.
Six Flags offered a different rationale for its long dearth of female directors. The theme-park operator replaced its entire board upon emerging from bankruptcy in 2010. Adding a woman will be the highest priority when its seven directors choose their next independent member, said Nancy Krejsa, senior vice president of investor relations.
Another 13 companies without female directors as of their 2016 annual meeting subsequently ended their drought, Equilar found. On Dec. 12, for instance, Integrated Device Technology Inc. announced the board appointment of executive recruiter Selena Loh LaCroix.
By Joann S. Lublin
Source: Wall Street Journal
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