The Case For Increasing Boardroom Diversity

by Michael Volkov

boardroom and womenWith all the focus on improving diversity in the ranks of senior corporate management, the glaring corporate governance problem is the lack of diversity in corporate boardrooms.

The facts paint a dismal picture – a 2011 survey of Fortune 500 companies found that women held only 16 percent of board seats; 11 percent of companies had no women on their boards; only 3 percent of board seats were held by women of color.

A 2012 survey of S&P and Russell companies found that only 12 percent of S&P 1500 directors were women and 11 percent of Russell 3000 companies were women.

The lack of diversity is not limited to United States companies.  A global survey of all companies in the MSCI All World Index found that:

41 percent of the companies had no women on their boards;

72 percent of companies in emerging Asian markets (China, India, the Philippines, and South Korea) and 68 percent of companies in developed Asian markets (e.g. Hong Kong, Japan, Singapore, Australia) had no women on the boards; and

60 percent of companies in Latin America had no women on their boards.diversity

Recent scholarship has focused on measuring whether the lack of diversity on corporate boards effect on corporate financial performance.  While there are a number of studies in this area positing different models for analyzing the issue, the weight of the evidence confirms that lack of diversity effects corporate performance, especially stock performance.  See Credit Suisse Report, Gender Diversity and Corporate Performance (August 2012) (Here); and F. Dobbin and J. Jong, Corporate Board Gender Diversity and Stock Performance: The Competence Gap or Institutional Investor Bias? (Harvard University, July 1, 2010) (Here)

If diversity does not improve in the corporate boardroom, companies run the risk that the SEC or even Congress may address the issue.  This SEC is not shy about mandating disclosures of important, or “material” issues, and the SEC may start to take greater interest in the issue.  In addition, Congress is not shy about such issues, especially when it comes to improving diversity in the business world.

boardroom diversityPublic opinion if focused on the issue could become a factor.  Candidate Romney certainly touched a nerve with his “binders full of women” comment in the second debate with President Obama.  It would not take much for Congress and the media to draw attention to this issue, especially in this era when big business appears to be a frequent target of public criticism.

As women rise in the ranks and “lean in” to assume the reins of more and more companies, pressure will build to open the corporate boardroom doors to increased numbers of women and minorities.  The sooner the doors are opened, the better for our economy and corporate governance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov

The Volkov Law Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.