Gender Diversity on the Board: The US Falls Further Behind

A report sponsored by the British Government has called on British companies to increase the number of women on the board.  The report is here.  It is an attempt by Britain to deal with a well known problem (women amount to only 12% of directors of large public companies, similar to the percentage in the US) but stopping short of legally mandating quotas, an approach taken by Norway and Spain and being considered by other countries.  The report puts pressure on companies to increase the percentage to 25% over the next several years.

What is going on in the US?  Dodd-Frank required an office of diversity but at the SEC that office is on hold given the financial constraints currently in place.  The SEC has required some disclosure about diversity but as Commissioner Aguilar has noted, the disclosure had not been very robust.  

We wil have more to say on this issue over the next week.  Suffice it to say, however, that the issue provides yet another justification for shareholder access.  The dearth of women, whatever the explanation, is a byproduct of the system of director nominations.  Currently that system is largely monopolized by management.  Access will to some degree weaken the choke hold over nominations and provide another avenue for increased board diversity.