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There are more women than ever on the boards of American companies, but the number of female executives has declined for the first time in decades, according to data that shows the uneven progress of efforts to diversify America’s corporate leadership.
The percentage of women on the boards of Russell 3000 companies continues to rise, up to 30 percent this year from 29.4 percent at the end of 2023 and 28.5 percent in 2022, according to ISS Corporate, a data provider.
However, in executive positions, women lost positions in 2023 for the first time since at least 2005, according to an S&P analysis of companies in its global total market index. In senior management positions at the executive level, growth in women’s representation slowed in 2023 to the lowest rate in more than a decade, S&P said.
“These numbers are still too low and nowhere near equity,” said Jennifer McCollum, director of Catalyst, a global nonprofit that advocates for women in the workforce.
Of the 21 new CEOs of S&P 500 companies in the first quarter of 2024, only two were women: Heidi Petz at Sherwin-Williams and Lisa Barton at Alliant Energy. The fourth quarter of 2023 was the first in two years in which no new female CEOs were hired at S&P 500 companies, according to data from consulting firm Russell Reynolds. Only 42 S&P 500 CEOs are women.
Currently, there are no female CEOs on the 30-member Dow Jones industrial average. In 2023, Walgreens’ Rosalind Brewer Low as CEO of the pharmacy chain and was replaced by Tim Wentworth. Walgreens exited the Dow earlier this year.
McCollum said “an unconscious bias persists” against women in business.
“Women and men with the same talents and abilities are often described in very different ways, creating invisible barriers that can have a huge impact on the advancement of women,” she said.
Carolyn Childers, CEO of Chief, a network of women executives, said that just five years ago, “there was a surge by companies to know and recognize the benefits of having a more diverse leadership team.”
But she said a trend running counter to women’s advancement in recent years has been demands from companies that their workforce return to the office after working remotely during the pandemic. This disproportionately harms women, who “still do most of the childcare,” she said.
At the same time, companies continue to look for gender diversity when conducting searches for new board members, said Chuck Gray, co-head of Egon Zehnder’s board and CEO practice. But companies are also eager to have board members with corporate CEO experience, he said.
“Because the ranks of CEOs are not very diverse, this will have a natural impact on the [board diversity] numbers over time,” he said. “We expect some of the diversity numbers to go down because of that.”
In 2022, a California court struck down a 2018 state law that required a certain number of women to serve on corporate boards based in the state.
Initially, there was little impact on gender diversity on the boards of California companies after the law ended, said Amit Batish, senior director at Equilar, a compensation data provider. But in the first quarter of 2024, the percentage of women on California corporate boards fell to 34 percent, the first decline since 2020, she said.
“While the overall percentage of women on boards has increased steadily over the past few years, the pace of growth has slowed over the past three years, largely due to the decline of women on newly appointed directors,” it said. Batish.
At the end of 2021, almost half of all new directors appointed to Russell 3000 companies were women, it said.
“By the end of 2023, the figure dropped to 39 percent.”