Corporate boards in the U.S. are gradually seeing more female representation, but still pale in comparison to a number of Western countries, according to a new report from Big Four firm KPMG.
Citing data from Spencer Stuart’s 2018 U.S. Board Index report, the KPMG report found that among the largest companies in the SP 500 Index, the percentage of women directors has increased to 24 percent in 2018 — up from 22 percent in 2017, and 18 percent in 2013. July 2019 also marked the first time that all SP 500 companies have at least one female director on their boards.
The report, “The state of board gender diversity,” was penned by Susan Angele and Annalisa Barrett, both senior advisors at the KPMG Board Leadership Center.
“Historically, there has been a mindset that directors must have served as a CEO of a public company in order to be considered for board service and there are a limited number of female CEOs of U.S. public companies,” Angele and Barrett told Accounting Today. “There has been gradual progress. More boards are considering non-CEOs when looking for new board members. For example, CFOs and other accounting leaders are often sought for director seats so that boards can comply with the [Sarbanes-Oxley] requirement for audit committee financial experts. Often, these accounting-savvy directors are female. In fact, a recent study conducted by the KPMG Board Leadership Center found that nearly one-third (30 percent) of the CFOs of SP 1500 companies who are serving as independent directors on other public company boards are female.”
However, the United States differs from a number of countries by not instituting gender diversity quotas in their corporate boards. Norway, for instance, which enacted such a gender quota in 2003, currently has the highest percentage of women serving on the country’s largest company corporate boards (46 percent), according to the Spencer Stuart data.
Given the dearth of diversity in the accounting profession, especially at the leadership level, accounting firms would be wise to take stock of the different talent and perspectives within their ranks and cast a wide net when seeking leadership candidates.
“Companies can develop programs to encourage their female accounting leaders to develop their skills as strategic business leaders and chart a path to the boardroom,” Angele and Barrett added. “This practice is often seen as a win-win. The company where the accounting leader works [will benefit] from the experience she receives from board service, and the company where she serves as a director benefits from her expertise, including — but not limited to — her financial expertise, in addition to the benefits of having a more gender diverse board.”
For the full report, head to KPMG’s site here.
