More women make it on to US company boards but fewer reach the C-suite

There are more women on US company boards than ever before but the number of female executives has fallen 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 female board directors at Russell 3000 index companies continues to rise, to 30 per cent this year from 29.4 per cent at the end of 2023 and 28.5 per cent in 2022, according to ISS Corporate, a data provider. 

However, in executive positions, women lost seats 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 roles under the executive level, the growth of women’s representation slowed in 2023 to the lowest rate in more than a decade, S&P has said.

“These numbers are still too low and nowhere near equity,” said Jennifer McCollum, head of Catalyst, a global non-profit that advocates for women in the workforce. 

Of the 21 new chief executives at 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 chief executives started at S&P 500 companies, according to data from Russell Reynolds, a consultancy. Just 42 S&P 500 CEOs are women.

Currently, there are no female chief executives in the 30-member Dow Jones Industrial index. In 2023, Walgreens’s Rosalind Brewer stepped down as chief executive of the pharmacy chain and was replaced by Tim Wentworth. Walgreens was dropped from the Dow earlier this year.

McCollum said an “unconscious bias persists” against women in business.

“Women and men with the same talents and skills are still often described in very different ways, creating invisible barriers that can have an enormous impact on women’s advancement,” she said.

Carolyn Childers, chief executive of Chief, a network of women executives, said that just five years ago, “there was a surge from companies of knowing and acknowledging the benefits of having a more diverse leadership team”.

But she said one trend working against the advancement of women in recent years had been demands by companies that their workforces return to the office after working remotely through the pandemic. This disproportionately hurts women, who “still have the majority of childcare”, she noted.

At the same time, companies are still looking for gender diversity when conducting new board member searches, said Chuck Gray, co-head of Egon Zehnder’s CEO and board practice. But companies are also eager for board members with corporate CEO experience, he said.

“Because CEO ranks are not very diverse, it is going to have a natural impact on the [board diversity] numbers over time,” he said. “We expect to see some of the diversity numbers go down because of that.”

In 2022, a California court struck down a 2018 state law that had mandated a certain number of women on corporate boards based in the state.

At first, there was little impact on gender diversity on the boards of California companies after the law ended, said Amit Batish, a senior director at Equilar, a remuneration data provider. But in the first quarter of 2024, the percentage of women on California corporate boards dipped to 34 per cent, the first decline since 2020, he said.

“While the overall percentage of women on boards has risen steadily for the last several years, the pace of growth has slowed over the last three years, largely due to the decline in newly appointed directors who are women,” Batish said.

By the end of 2021 nearly half of all new board directors appointed to Russell 3000 companies were women, he said.

“By the end of 2023, the figure declined to 39 per cent.”