Los Angeles area companies are still working to add women to their boards, with a number of firms like Skechers USA Inc. and B. Riley Financial Inc. still featuring an all-male slate of directors.
But some progress on the diversity front was made in the larger market in 2018, according to a recently released study by Spencer Stuart Inc., a Chicago-based global executive search and leadership consulting firm.
Spencer Stuart’s report shows that new faces are increasingly joining U.S. boards.
The report, called the “2018 U.S. Spencer Stuart Board Index,” shows strides were made among members of S&P 500. For the second consecutive year, women and minorities represent half of the incoming class of 428 new independent directors who joined S&P boards.
The Standard & Poor’s 500, often abbreviated as the S&P 500, is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the New York Stock Exchange or Nasdaq Stock Market.
According to Spencer Stuart, women advanced in the boardroom, and represented a record-breaking 40 percent of the incoming class for the 2018 proxy year – up from 36 percent in 2017. Minority women represent 9 percent of the new directors, up from 6 percent in the prior year.
More than half of the new women directors, according to the report, were added to boards that expanded in size over the past year, an indication that boards are heeding the calls for enhanced gender diversity in the boardroom. Only three S&P 500 companies have no women directors, according to the report, which did not disclose the names of the companies
Momentum is building to appoint more women on corporate boards in California following enactment of a 2018 state law requiring companies to have at least one female board member by Jan. 1, 2020. But the chronic low rate of director turnover is bringing about only gradual shifts in the overall makeup of U.S. boards – a trend that the California law was meant to address.
The new law, which was signed by California Gov. Jerry Brown on Sept. 30, is the first in the United States to require gender diversity on a board. After hitting the minimum target of one female on a corporate board beginning Jan. 1 2020, the law increases the requisite number of female directors for California companies again beginning Jan. 1, 2022. At that time, a minimum of three female directors are required for boards of six or more, two female directors for boards of five, and one female director if a board is made up of four or fewer members.
Companies out of compliance with the law face fines starting at $100,000.
The California law was pushed by Women on Boards, a national organization based downtown working to increase the percentage of women on U.S. company boards to 20 percent or greater by 2020. The organization’s data show 95 publicly traded companies in California don’t have a woman on their boards.
As of Dec. 14, there were at least 10 publicly traded companies headquartered in L.A. County with aggregate market capitalizations of $10.7 billion that currently lack a female board member, according to data analyzed by the Business Journal.
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