The majority of for-profit and non-profit corporations are required by law to have boards of directors, but finding the ideal board candidate involves effort. Identifying qualified AND diverse board candidates is even more of a challenge. However, research shows that a corporate board made of diverse candidates is worth the effort. Businesses with diverse boards typically have higher rates of return, stronger culture and a better understanding of their customers. Though the data proves diversity improves companies across the board, women still only make up 20% of board seats.
Boards will become more diverse by choice or by law
In September 2018, California became the first state to legally encourage corporate board diversity by mandating that every public company in the state have at least one female director by the end of 2019 or pay a $100,000 fine. The law kicked off a frenzied race to find hundreds of female board directors.
However, the penalty doesn’t stop there. By the end of 2021, if a company has five board members, two must be female directors. If the board is made up of six members, three must be females. Companies that don’t comply, could pay a penalty of $300,000 for every seat that should be filled by a woman.
New York and New Jersey are considering similar mandates. Companies across the country, urged by investors like BlackRock, Inc., have been actively diversifying their boards. Goldman Sachs CEO, David Solomon, announced that the bank will stop taking companies public in the U.S. and Europe unless they have at least one diverse board member.
Where are all the female board members?
Why does it take issuing penalties to push companies to add females to their board? Is it because companies are so against having female board members? We don’t think so. Sure, there must be some companies that have no desire to change, but that’s not the majority.
Historically, board members are chosen based on a network of friends, peers and acquaintances. Most business owners or executives have a network made up of people who look a lot like themselves, so it’s difficult to find referrals for experienced female professionals. Another reason is the perceived lack of experience for many great female candidates.
The majority of board seats have been filled with candidates who have served on leadership teams of public companies. Leadership roles have been traditionally run by men in these companies, which limits the board candidate pool to, well, men. We know there are qualified women ready to serve on boards, but they may not be throwing their hat in the ring like men do.
Boulo’s SpringBoard brings diversity
Companies must be diverse, smart and innovative to survive, and Boulo wants to help. Utilizing our matching platform and network of over 780 talented females, Boulo is now matching companies with ‘board-ready’ women. These women have senior or C-Suite experience and may have served on for-profit boards with small and medium sized businesses, nonprofit boards, or school boards. They have deep knowledge in specific functions, can help raise money, gain customers, hire and retain the best people, and provide industry expertise. These female board candidates come from across the US and have at least five years’ experience in a leadership position at a private corporation, large family company, government agency, nonprofit, entrepreneurial, or professional firm.
Interested in learning more about Boulo’s SpringBoard? Our CEO Delphine Carter would love to chat. Simply email firstname.lastname@example.org or call 205.566.6441.
If you are ready to jump right in, complete our Role Calibration Survey for your next board search.