board composition & recruiting trends 2015: gender ...€¦ · board composition &...

20
Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500

Upload: others

Post on 04-Jul-2020

1 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500

Page 2: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

About EquilarFounded in 2000, Equilar provides unbiased research services and shareholder engagement and governance solutions. Our award-winning products—Insight, BoardEdge, Engage, and Atlas—translate complex, unstructured data sets into valuable information to help executives, board members, and investors make the best decisions possible. Using unrivaled data systems and a cloud-based platform, we deliver the highest-quality services and information with accuracy and integrity.

Equilar’s client base of more than 1,000 companies—which includes 70% of the Fortune 500, public and private companies, compensation consultants, investors, attorneys, and major proxy advisory firms—relies on our unparalleled access to the boardroom and wider corporate ecosystem. All of our business services empower, engage and enable executives throughout the world.

Our flagship product, Equilar Insight, has been the gold standard for accurate and trusted benchmarking data on executive pay and pay for performance alignment. Featuring Equilar TrueView (ETV), Insight is the only platform that seamlessly integrates both public (proxy) and private data (sourced from Equilar’s proprietary Top 25 Executive Compensation Survey) to provide more complete benchmarking for executive positions beyond the CEO and CFO. Equilar Insight’s best-in-class shareholder engagement and governance solutions also provide a comprehensive set of tools including the Institutional Shareholder Services (ISS) Simulator, the proprietary Glass Lewis P4P Modeler & Proxy Papers, Equilar Market Peers and Equilar Pay for Performance Profile.

Over the years, Equilar has built on our core strengths and added to our product portfolio. Our newest offering, BoardEdge, provides directors, executives, investors, and governance professionals the ability to objectively evaluate and compare the composition of a board along multiple dimensions, such as diversity, board tenure and industry experience. Each of our solutions leverages the power of network connections and commonalities among board members and executives at the world’s most influential companies.

2015 Gender Diversity in the S&P 500 | 2

Featured In

Page 3: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

Contents

2015 Gender Diversity in the S&P 500 | 3

Executive Summary 4Methodology/Key Findings 4,5

S&P 500 Board Attributes 6Board Composition by Gender 7,8Board Size and Average Number of Females Per Board 9

S&P 500 Director Attributes 10Age and Tenure 11,12Mandatory Retirement Age 13Directors on Multiple Boards 14Director Independence 15Directors with CEO Experience 16

Gender Diversity in Leadership and Committee Participation 17Board Leadership Positions 18Committee Representation 19

Page 4: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

Executive SummaryA board of directors serves a crucial fiduciary role, and directors’ responsibilities run the gamut from hiring management, ratifying company financials, and setting executive pay to shaping a company’s strategic agenda, oversight of risk and adherence to best corporate governance practices. In the past decade, financial crises, regulatory changes, technological innovations, and movements in cultural sentiment and public policy have yielded obligations previously unseen by U.S. boards.

In this changing landscape, boards have not only grown increasingly independent but also diverse. While diversity encompasses a variety of characteristics—be it skillset, age, experience or ethnicity—gender diversity on corporate boards is a marquee topic in corporate governance. As pressure mounts for boards to align with the demographics of their investors and the population at large, female representation on corporate boards ranks as a high priority among numerous governance stakeholders.

In the past five years, women have become an increasing fixture on S&P 500 boards of directors, and the prevalence of female directors has increased 26.1% in the past five years to reach nearly one in five of all director seats, from 15.7% in 2010 to 19.8% in 2014.

Women on S&P 500 boards not only occupied more board seats, but they also held more leadership positions in 2014 than 2010, and 54 female directors served as board chair, vice chair, or lead independent director in 2014 versus 44 five years earlier, an increase of 22.7%. However, females still represent just 6.8% of all board leadership positions, as males occupy the other 739 roles fitting that description. (continued on following page)

0

5%

10%

15%

20%

25%

UtilitiesTechnologyServicesIndustrial Goods

HealthcareFinancialConsumer Goods

Basic Materials

16.2%

22.9%

20.2%21.2%

18.5%

20.2%

18.3%

20.7%

2010 2014

Prevalence of Female Directors on S&P 500 Boards, by Industry

KEY FINDINGS

• Nearly 20% of directors on S&P 500 boards in 2014 were women, up from 15.7% in 2010.

• The percentage of boards with at least one female director grew from 88.8% in 2010 to 97.1% in 2014. Women were most represented on boards in the consumer goods sector and the least in the basic materials sector.

• In 2014, women held 54 board leadership positions, a 22.7% increase from 2010. Meanwhile, males sat in the other 739 board leadership roles, or 93.2% of all such positions.

• Though fewer directors overall served on more than one board in 2014 than in 2010, 10.2% of multi-boarded directors were women in 2014, up from 7.9% in 2010.

• S&P 500 boards became increasingly independent over the last five fiscal years, and outsider representation increased 2.1 percentage points to 84.6% of all directors. Of those outside directors, 22% are female.

2

3

4

5

1

2015 Gender Diversity in the S&P 500 | 4

Page 5: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

Though the likelihood of a female director on a technology sector board grew from 78.3% to 93.1% in the past five years, the sector still lagged all others in that aspect—and even with increasing representation of boards counting at least one woman, 18.3% of technology directors are female, 1.5 percentage points lower than the S&P 500 prevalence overall. Meanwhile, in the financial, healthcare, and utilities sectors, every single board counted at least one female director.

In this special report on gender diversity within S&P 500 boardrooms, we analyze the architecture of boards guiding America’s largest companies. Overall, the study demonstrates that women served on and led more S&P 500 boards and committees in 2014 than 2010, and that independent directors constituted a larger proportion of boardrooms as the study period progressed. However, the study also finds that female representation in U.S. corporate boardrooms still significantly lags behind that of their male counterparts, examining the degree to which that is the case and the potential implications.

Methodology

In this report, Equilar analyzed gender diversity and board composition for boards of directors leading S&P 500 companies, which included a total of 5,494 unique directors over the five fiscal years examined. Fiscal years were defined as fiscal year ends between February 1st of the fiscal year and January 31st of the following year. For example, companies included in fiscal 2014 had fiscal year ends of February 1, 2014 through January 31, 2015. Industry sectors are based on Yahoo! Finance classifications, and conglomerates were excluded from charts throughout the report due to small sample size, but these companies are included in the overall figures. CEO Experience is defined as service in a chief executive officer position at any company since the inception of Equilar’s database in 2000.

For more research and content from Equilar on trends in executive compensation and shareholder engagement, please visit our Knowledge Center: marketing.equilar.com/knowledge-center

Executive Summary (continued)Learn More

Equilar recently hosted a roundtable discussion with CalSTRS, SAIS Center for Transatlantic Relations and Catalyst on why gender diversity globally is so crucial to investors, and how diverse boards correlate to company performance. Highlights include global implications of diversity on boards of directors, how far the initiatives to increase gender diversity have come, and what needs to be done for further improvement. To listen, please visit:

marketing.equilar.com/2015BoardDiversityWebinar

2015 Gender Diversity in the S&P 500 | 5

Page 6: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

S&P 500 Board Attributes

Page 7: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

Board Composition by Gender

S&P 500 Board Attributes

0

5%

10%

15%

20%

20142013201220112010

15.7%16.5%

17.4%18.6%

19.8%

Prevalence of Female Directors on S&P 500 Boards1

Gender diversity has received increasing attention from companies, shareholders and other stakeholders as a matter of corporate governance in recent years. As boards align with the demographics of their investors and the

population at large, female representation on corporate boards ranks as a high priority among numerous governance stakeholders. Female directors increasingly occupy seats on the boards of S&P 500 companies, including leadership positions at both the board and committee level. In 2014, female directors occupied 19.8% of S&P 500 board seats, increasing 26.1% from 15.7% in 2010.

Not only has the overall presence of females on boards increased, the percentage of S&P 500 boards with at least one female director grew from 88.8% in 2010 to 97.1% in 2014. In other words, the growth in the number of female directors is no longer limited to a small group of progressive companies—nearly all of the S&P 500 now counts a woman on its board of directors. In fact, every company in the financial, healthcare and utilities industries included at least one woman on its board.

Though growth at an index level is notable, there are still vast discrepancies not only between the number of men and women that serve on boards, but also in the number of women that serve on boards across industries.

2015 Gender Diversity in the S&P 500 | 7

Page 8: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

S&P 500 Board Attributes (continued)

DATA POINTS

• The greatest increase in prevalence of boards with at least one female director occurred between fiscal 2012 and 2013, growing 4.4 percentage points across all S&P 500 companies (Fig. 3)

• Utilities was the only sector that had at least one woman serving on every company board in 2010 (Fig. 3)

• Over the past five years the percentage of S&P 500 boards in the technology sector with at least one female director grew from 78.3% to 93.1%, the lowest prevalence out of all sectors in 2014 (Fig. 3)

• The representation of women on boards grew the most in basic materials sector, where 68.6% of boards counted a female director in 2010 but 94.3% did so in 2014, a 25.7 percentage point difference (Fig. 3)

0

5%

10%

15%

20%

25%

UtilitiesTechnologyServicesIndustrial Goods

HealthcareFinancialConsumer Goods

Basic Materials

16.2%

22.9%

20.2%21.2%

18.5%

20.2%

18.3%

20.7%

2010 2014

Prevalence of Female Directors on S&P 500 Boards, by Industry2

Percentage of S&P 500 Companies with at Least One Female Director, by Industry3

2010 2011 2012 2013 2014

S&P 500 88.8% 89.0% 90.9% 95.3% 97.1%

Basic Materials 68.6% 73.1% 73.6% 90.6% 94.3%

Consumer Goods 96.5% 94.8% 96.6% 94.8% 96.6%

Financial 97.6% 96.3% 98.8% 98.8% 100.0%

Healthcare 97.7% 97.7% 97.8% 100.0% 100.0%

Industrial Goods 81.4% 79.5% 81.8% 93.2% 95.5%

Services 90.8% 92.9% 95.0% 97.1% 98.0%

Technology 78.3% 77.5% 81.9% 88.9% 93.1%

Utilities 100% 100% 100% 100% 100%

The percentage of women serving on S&P 500 boards in the basic materials sector increased from 11.2% in fiscal 2010 to 16.2% in fiscal 2014. With an increase of more than 40% in the prevalence of female directors on their boards, basic materials companies showed the largest differential of all sectors, yet it still had the lowest prevalence of any industry. The story is similar in the technology sector, where the percentage of females on boards increased from 13.7% to 18.3%—approximately a 33% gain. However, tech companies still lagged the overall index and had the second lowest prevalence of female directorship in the S&P 500.

The consumer goods sector led all industries in the percentage of female directors on their boards, with 22.9%, even though 3% of companies in that sector do not include women. Those sectors that have 100% prevalence of females on company boards—finance, healthcare and utilities—all outpaced the S&P 500 average by a range of 0.5 to 1.4 percentage points.

2015 Gender Diversity in the S&P 500 | 8

Page 9: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

S&P 500 Board Attributes (continued)

Board Size and Average Number of Females Per Board

Over the past five years, the average size of S&P 500 company boards that include women stayed essentially the same, on average totaling 10.9 members, down just slightly from 11.0 in 2010. Indeed, that figure mirrors the average board size of all S&P 500 boards—whether or not they include female directors—which increased from 10.7 in 2010 to 10.9 in 2014. Though correlation is not always equivalent to causation, this could be an indication that boards are growing to accommodate a wide range of diverse directors, including women, and those that have already counted women among their ranks are remaining approximately the same size. When comparing growth across industries, boards tended to be slightly larger in the consumer goods, financial, and utilities sectors, which coincidentally have 100% prevalence of at least one female director.

In 2014, on average, there were 2.2 women serving on boards in the S&P 500, up from 1.9 in 2010, a 16.9% increase. (Fig. 4) The consumer goods sector had the highest average number of female board members over the last five years, increasing from 2.4 to 2.7. Despite the fact that the basic materials sector saw the largest gain in the percentage of boards that included at least one woman director, companies in that industry still had the lowest average number of women on their boards at 1.8. In addition, it saw the smallest increase in the average number of women, up just 6.4% from 1.7 in 2010. Technology, on the other hand, saw a steady increase over the 5-year period, but remained below the average at 1.9 females per board.

0

0.5

1.0

1.5

2.0

2.5

20142013201220112010

1.92.0

2.1 2.12.2

Average Number of Females on S&P 500 Boards That Include Females4

Average Number of Female Directors on S&P 500 Boards, by Industry5

0

0.5

1.0

1.5

2.0

2.5

3.0

UtilitiesTechnologyServicesIndustrial Goods

HealthcareFinancialConsumer Goods

Basic Materials

19.2%

2010 2012 2013 20142011

23.8%15.5%

17.8%21.2%

14.1%

15.8%

6.4%

(Brackets denote percentage change from 2010-2014)

DATA POINTS

• The average number of women per board grew the most in the financial sector, increasing 23.8% to 2.3 in 2014 (Fig. 5)

• The growth in directorships for women was smallest in the basic materials sector, increasing only 6.4% over the last five years (Fig. 5)

• In addition to consumer goods, financial, healthcare, services and utilities companies outpaced the average number of females on boards for the S&P 500 overall (Fig. 5)

2015 Gender Diversity in the S&P 500 | 9

Page 10: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

S&P 500 Director Attributes

Page 11: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

S&P 500 Director Attributes

54

55

56

57

58

59

60

61

62

63

20142013201220112010

58.0

61.161.5

58.4

61.8

58.8

62.1

58.3

59.1

62.2

Female Male

Average Director Age on S&P 500 Boards, by Gender6

0

2

4

6

8

10

20142013201220112010

7.7

8.9

7.6

9.0

7.7

9.2 9.3

7.5 7.3

9.3

Female Male

Average Director Tenure on S&P 500 Boards, by Gender 7

Age and Tenure

The age of directors serving on S&P 500 boards grew slightly over

the past five years—approximately a one-year increase in average age for both males and females. However, women tended to be younger than male directors by an average of three years throughout the study period. The average age of females on S&P 500 boards was 58.0 in 2010, increasing to 59.1 years old in 2014, while the average male director age increased slightly from 61.1 years in fiscal 2010 to 62.2 years by 2014. (Fig. 6)

Directors were youngest on average in the technology sector, and female directors were older on average within the financial and basic materials sectors. For men, the average age of directors was highest in the utilities sector. The youngest director in the study was 26 while the oldest was 94.

Director tenure as a corporate governance issue has seen increasing attention over the past few years. On average, women served as directors for fewer years than men, and the gap widened slightly from fiscal 2010 to 2014. The average tenure for female directors was 7.3 years at S&P 500 companies in 2014, compared to 9.3 years for men. After a slight increase from 2010 to 2012, female director tenure fell nearly half a year on average since 2012. Meanwhile, average male director tenure increased slightly every year, up from 8.9 years in 2010. Overall, these figures amount to an average tenure for directors sitting on S&P 500 boards that grew 3.0% in the last five years, from just over 8.6 years to just over 8.9 years. (Fig. 7)

Investors Eye Board Assessment

Equilar’s BoardEdge allows users to actively search a large database of 135,000 public company board members and executives based on a specified criterion, such as age, gender, tenure, experience and skill set. Equilar’s premier board assessment tool eases the process of recruiting qualified board candidates, while allowing users information to engage better with shareholders on issues investors are reviewing regularly.

marketing.equilar.com/boardedge

2015 Gender Diversity in the S&P 500 | 11

Page 12: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

S&P 500 Director Attributes (continued)

In 2014, the services sector had the highest average director tenure at 9.8 years overall—including both male and female directors—followed closely by financial companies at 9.6 years. While average director tenure was longest in the services sector over the past five years, that industry also showed the greatest increase in director tenure from 2010 to 2014, up approximately 0.8 years. Average director tenure decreased only in the basic materials and utilities sectors during the study period, with all other sectors showing marginal increases.

As more women joined S&P 500 boards for the first time, average tenure fell in concordance. The lowest average female director tenure was in the technology sector, where women served as directors for around 6 years compared to the average for other sectors, which was at least 7 years in each. This is likely an effect of tech companies’ efforts to include females in their board ranks by adding new directors in recent years.

DATA POINTS

• The most notable decrease in director tenure for S&P 500 companies occurred in the industrial goods sector, where tenure dropped by nearly two years for women serving as directors from 2010 to 2014 (Fig. 8)

• The consumer goods, financial, healthcare, and technology sectors all saw marginal increases in director tenure for women (Fig. 8)

0

2

4

6

8

10

UtilitiesTechnologyServicesIndustrial Goods

HealthcareFinancialConsumer Goods

Basic Materials

6.1

7.4 7.6 7.7 8.0

8.9

7.0

5.9

8.6

7.8 7.9

8.6

7.1 7.1

6.1

7.7

2010 2014

Average Tenure for Female Directors on S&P 500 Boards, by Industry8

2015 Gender Diversity in the S&P 500 | 12

Page 13: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

Predetermined limits on director age can correlate with director tenure, and 185 companies in the S&P 500 disclosed a mandatory retirement age in their most recent proxy statements. Among those companies that do set an age by which directors must retire, the number varies. The range in mandatory retirement age was between 70 and 80 years old for most companies. The oldest mandatory retirement age was 80, though only 1.0% of companies set this as the mandatory retirement age. The majority of mandatory retirement ages at S&P 500 companies ranged between 72 and 75 years old, with 95% of all companies that set a mandatory retirement age doing so within this range.

S&P 500 Director Attributes (continued)

DATA POINTS

• Nearly 50% of S&P 500 companies that disclosed a retirement age set their requirements at the age of 72. The second most common mandatory retirement age was 75, with a prevalence of 32% (Fig. 9)

• The youngest mandatory retirement age that companies set was 70, and 4% of companies did so (Fig. 9)

0

10%

20%

30%

40%

50%

8076757473727170

4%

49%

1%

5%

9%

1% 1%

32%

Age

Mandatory Retirement Ages for Directors on S&P 500 Boards9

Mandatory Retirement Age

2015 Gender Diversity in the S&P 500 | 13

Page 14: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

S&P 500 Director Attributes (continued)

Across S&P 500 companies, about half of all directors served on more than one board. The issue of over-boarded directors is one often examined by corporate governance stakeholders concerned that certain directors may be stretched too thin due to the increasing commitment that director roles require. A recent proposed guideline from proxy voting firm Institutional Shareholders Services (ISS) shined a light on this issue, suggesting that sitting CEOs should be on no more than one outside board, and other directors should sit on at most four to five.

Overall, men were more likely to serve on multiple boards across industries, though in the past five years the percentage of men who served on multiple boards dropped from 42.7% to 38.8%. Even as the overall prevalence of directors sitting on multiple boards gradually dipped below the 50% mark, the percentage of female directors sitting on multiple boards grew from 7.9% in 2010 to 10.2% in 2014. This raises the question of whether the increasing number of women on boards represents an expanding overall field of female directors, or whether the same female directors continue receiving appointments to multiple boards.

Of directors who sit on multiple boards, the average number of boards for male directors remained unchanged at 2.5 since 2010, while multi-boarded women held seats on an average of 2.6 boards in fiscal 2012, a number that has remained unchanged since.

Directors on Multiple Boards

0

10%

20%

30%

40%

50%

60%

20142013201220112010

42.7%

7.9% 8.3% 8.6% 9.4% 10.2%

41.9% 40.8% 39.8% 38.8%

Female Male

Percentage of Directors That Serve on Multiple S&P 500 Boards, by Gender10

2015 Gender Diversity in the S&P 500 | 14

Page 15: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

S&P 500 Director Attributes (continued)

Independent or outside directors are seen as increasingly valuable to boardrooms under the premise that they bring objective opinions and insight without conflict of interest. As a result, S&P 500 boards steadily grew more independent over time, and independent directors made up nearly 85% of all S&P 500 boards in 2014, increasing from 82.4% in 2010.

As S&P 500 boards became increasingly independent over the last five years, the percentage of independent directors that are female increased as well. In 2014, 22.3% of independent directors were female, an increase from 18.2% in 2010. This is likely a result of the increase in female directors overall, but it also indicates that outsiders make up a larger portion of the female director population than of the male director pool.

Changes in board leadership structure further revealed the trending growth in board independence since 2010. The prevalence of non-executive chairs grew significantly over that time while CEO and chair roles diminished in kind. Of boards led by a CEO-chair, the addition of a lead independent director increased substantially between 2010 and 2014.

Specifically, the prevalence of the combined CEO-chair role on S&P 500 boards fell from 57.5% to 52.7% from 2010 to 2014. Despite the overarching trend, the number of females in the combined CEO-chair role grew from 10 to 12 over the same period.

With the decline of the CEO-chair role, non-executive chairman prevalence increased from 28.8% to 34.3% from 2010 to 2014, and in concert, the number of female non-executive chairs doubled from three to six.

Finally, the prevalence of lead directors on S&P 500 boards increased from 46% to 57% in the past five years, and 29 females served in that role in 2014.

Director Independence

0

20%

40%

60%

80%

100%

20142013201220112010

82%

18.2% 18.8% 19.6% 20.9% 22.3%

81.2% 80.4% 79.1% 77.7%

Female Male

Share of Independent Directorships in the S&P 500, by Gender11

2015 Gender Diversity in the S&P 500 | 15

Page 16: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

Directors with CEO Experience

Less than one-third of directors serving on boards of S&P 500 companies have CEO experience, and when limiting it to women this number shrinks even more. However, over the past five years more directors had CEO experience of any kind, with more women bringing past or present CEO experience with them. More directors in 2014 had CEO experience than in 2010, growing from 28.7% to 31.3% of all directors, and the number of S&P 500 female directors with CEO experience increased from 39 to 75 over the study period, a 92.3% increase.

Of course, that growth is coming from a small base, and the percentage of female directors with CEO experience totaled just 1.7% of all directors in 2014, up from 0.9% in 2010, while the percentage of male directors with CEO experience increased from 27.8% to 29.3% over this same period. Of all directors with CEO experience, women made up 5.4% in 2014, an increase from 3.2% in 2010. (Fig. 12)

DATA POINTS

• Utilities companies had the least amount of female CEO experience on their boards in 2014 at just 0.9% of all directors (Fig. 13)

• Basic materials and consumer goods companies saw the second largest gain in percentage of female directors with CEO experience on their boards from 2010 to 2014, increasing 1.3 percentage points during that time frame (Fig. 13)

0

5%

10%

15%

20%

25%

30%

32%

20142013201220112010

27.8%

0.9% 1.1% 1.4% 1.5% 1.7%

28.4% 28.9% 29.3% 29.6%

Female Male

Percentage of S&P 500 Directors with CEO Experience, by Gender12

Prevalence of Female Directors with CEO experience by Industry13

0

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

UtilitiesTechnologyServicesIndustrial Goods

HealthcareFinancialBasicMaterials

2.1%

0.8%

2.0%

0.5%

0.9%

3.3%

1.1%

1.9%

0.9%1.0%

1.4%

0.3%

2.9%

1.6%

2.1%

0.9%

Female Male

S&P 500 Director Attributes (continued)

Build Your Best Board

BoardEdge provides users data points to evaluate board composition, including industry and CEO experience, providing structure and transparency for future succession planning processes. Users have better access to the information and data required to discover qualified successors that meet the desired attributes of shareholders’ interests. For more info: marketing.equilar.com/boardedge

2015 Gender Diversity in the S&P 500 | 16

Page 17: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

Gender Diversity in Leadership

and Committee Participation

Page 18: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

Gender Diversity in Leadership and Committee ParticipationBoard Leadership Positions

As the percentage of female directors continues to rise, it is

only natural that women step into more leadership roles. Women increasingly fill the positions of board chairman, vice chairman, lead director or presiding director on S&P 500 boards. However, the growth has not been steady and continues to oscillate from year to year across sectors, and the percentage of women that occupy leadership positions is much smaller than the prevalence of female directors on boards overall.

In 2014, there were 54 women occupying leadership positions on S&P 500 boards, an increase of 22.7% from 44 in 2010. (Fig. 14) While that is a significant percentage change, that figure still accounts for just 6.8% of all board leadership positions in the S&P 500. Males occupy the other 739 board leadership roles. (Fig. 15)

Of all female leadership positions, more than half served as lead director. Twenty-nine women led boards in that role in 2014, outpacing the number of females who served as CEO-chair role (12), non-executive chair (6), presiding director (4), and vice chair (3).

The number of females in board leadership positions varied from industry to industry, but they all remained near or in single-digits. By sector, the services and financial industries had the greatest number of female directors in leadership positions in 2014, with 11 and 10, respectively. The consumer goods sector was the only sector where the number of female directors in leadership positions dropped from 2010 to 2014, from nine to six—which is in contrast to the sector’s progressive movement in electing females to the general board. (Fig. 16)

Median GC Equity and Long-Term Incentives 7

0

10

20

30

40

50

60

20142013201220112010

4447 47 48

54

48

Number of Female Leadership Positions on S&P 500 Boards14

Share of S&P 500 Director Leadership Positions, by Gender 15

Female Board Leadership Positions in the S&P 500, by Industry 16

2010 2011 2012 2013 2014

Female 5.8 6.1 6.1 6.1 6.8

Male 94.2 93.9 93.9 93.9 93.2

2010 2011 2012 2013 2014

Basic Materials 3 3 2 2 4

Consumer Goods 9 10 10 8 6

Financial 9 9 8 8 10

Healthcare 3 4 3 3 4

Industrial Goods 1 1 2 3 4

Services 8 9 10 10 11

Technology 7 6 7 7 9

Utilities 4 5 5 7 6

Get Ready for Shareholder Engagement Meetings

Equilar’s Disclosure Search is the most comprehensive solution to accurately examine SEC public disclosures on the market. Our accessible interface allows users to search within all publicly disclosed SEC forms, including CD&As, and discover updates on why certain companies made particular changes on their boards as well as any noticeable trends that may be taking place within board composition.

marketing.equilar.com/shareholder-engagement

2015 Gender Diversity in the S&P 500 | 18

Page 19: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

Gender Diversity in Leadership and Committee Participation (continued)

Committee Representation

As female directors became more prevalent on S&P 500 boards, they also occupied more seats on the “big three” committees: audit, compensation, and nominating and governance. These three committees are the most common, with the SEC requiring boards to incorporate audit and compensation committees.

Of the “big three,” audit committees saw the highest growth in female prevalence both as members and as chairs. While nominating and governance committees had the highest percentage of female chairs overall, the prevalence of female nominating and governance committee chairs showed little growth from 2010 to 2014.

0

5%

10%

15%

20%

25%

GovernanceAuditCompensation

19.7%

16.1%17.4%

19.7%

22.3% 22.6%

2010 2014

Female Prevalence on “Big 3” Committees of S&P 500 Boards17

Prevalence of Female Chairs of “Big 3” Committees on S&P 500 Boards18

0

5%

10%

15%

20%

25%

GovernanceAuditCompensation

12.9%

8.8%

14.7%

20.3%18.8%

20.5%

2010 2014

DATA POINTS

• Female prevalence grew the most on audit committees, rising 4.8 percentage points to 22.3% in 2014 (Fig. 17)

• Women chaired 14.7% of audit committees in 2010 and 18.8% in 2014, gaining 4.1 percentage points (Fig. 18)

• Women chaired 8.8% of compensation committees in 2010, also gaining 4.1 percentage points to 12.9% in 2014 (Fig. 18)

2015 Gender Diversity in the S&P 500 | 19

Page 20: Board Composition & Recruiting Trends 2015: Gender ...€¦ · Board Composition & Recruiting Trends 2015: Gender Diversity in the S&P 500. About Equilar ... include global implications

©2015 Equilar, Inc. The material in this report may not be reproduced or distributed in whole or in part without the written consent of Equilar, Inc. This report provides information of general interest in an abridged manner and is not intended as a substitute for accounting, tax, investment, legal or other professional advice or services. Readers should consult with the appropriate professional(s) before acting on information contained in this report. All data and analysis provided in this report is owned by Equilar, Inc.

For more information, please contact us at [email protected].

The contributing authors of this report were Jonathan Liu, Allyson Hahn, and Heather Kerr, Equilar Research Analysts and Matthew Goforth, Equilar Research & Content Specialist.

1100 Marshall Street Redwood City, CA 94063 Phone: (650) 241-6600 Fax: (650) 701-0993 E-mail: [email protected] www.equilar.com