Changes will bring woman oards: research shows that geography and industry account for considerable discrepancies in the prevalence of women directors, as does company size. But trends are favorable for more women joining corporate boards.

• Author: Flynn, Patricia M.
• Position: Corporate Governance

Heishtened emphasis on sound corporate governance and new regulatory requirements are creating incentives and opportunities for companies to tap into the underutilized pool of female talent for board seats. Requirements for financial experts, in particular, are boosting demand for CFOs and other individuals with financial management expertise as directors.

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Women's access to boardrooms in U.S. companies has lagged far behind their increasing roles in the economy as consumers, employees, investors and business owners. Women outnumber men in the population, account for almost half of the workforce and are responsible for over 80 percent of all purchases of goods and services. They make up over 45 percent of all investors, and they own over 10 million companies, which account for over 45 percent of all U.S. firms. Yet, the boardrooms of many companies remain off limits to women.

Catalyst's 2003 Census of the Fortune 500 shows that women hold 13.6 percent of all board seats, and that 10.8 percent of these companies have no female directors. Regional reports on women directors--conducted in 2003 in the Atlanta, Boston, Chicago and Philadelphia areas--report even lower representation. In these areas, women comprise between 7 and 12.4 percent of corporate directors; the proportion of companies without a woman on the board ranges from 10 percent in Chicago to 50 percent or more in the Atlanta and Boston studies (see Tables 1 and 2).

There are also large differences geographically as to whether companies have more than one woman director. Nationally, almost half (47.6 percent) of Fortune 500 companies have two or more women board members. In the Chicago study, 44 percent of the companies have more than one, followed by Philadelphia at 28.3 percent, Boston at 19.0 percent and Atlanta at 10.3 percent.

The Fortune 1000

Company size is a critical factor in the extent to which women are present in the boardroom. Larger companies, on average, have a greater number and greater share of women board members than do smaller companies, and are more likely to have more than one woman director. Regional differences are, thus, expected in the overall results on women directors, depending on the number and sizes of companies based there.

Fortune 1000 companies provide a good benchmark for inter-regional comparisons. Segmenting the upper and lower 500 companies on this list, all of which had annual revenues of over $1 billion in 2002, also...