High Demand for Diverse Directors But Low Supply, Says Spencer Stuart 2006 Board Diversity Report
16% of top 200 S&P 500 Directors Are Women; 15% are Minorities
NEW YORK, Feb. 21 /PRNewswire/ -- Spencer Stuart, the global executive recruiting firm, today reported research showing that America's largest corporations, striving to increase representation on their boards of directors by women and minorities, can find experienced business executives qualified for directors, but the overall supply of minority and women executives is still low. The firm said boards prefer directors with business experience, although they do appoint directors from academia and other professions. According to the firm's 2006 Board Diversity Report, a study of 2,357 directors of the top 200 S&P 500 companies, 16 percent of the directors now are women and 15 percent are minorities, and that companies have reached those levels by recruiting from farther down management ranks and from the academic and nonprofit worlds. The study also found that women hold only six percent of the five highest-compensated executive positions, and that minorities similarly hold only six percent of the top five executive slots. "CEOs and directors realize that board discussions are richer when individuals with diverse backgrounds and perspectives participate," said Julie Daum, practice leader for the North American Board Service Practice of Spencer Stuart. "The challenge is finding qualified women and minority candidates. Boards have a responsibility to shareholders to align the composition of the board with the business strategy by appointing directors who add value to the board and company. But, there is still only a small number of women and minorities among senior corporate executives, and they are in high demand." Daum added that Spencer Stuart understands the challenge boards undertake in finding qualified women and minority candidates. Spencer Stuart performs more than half of all director searches done by executive search firms, and it has placed more than 275 women and 150 minority candidates on boards since 2000. Through its work, the firm has witnessed that companies which are diligent and focused are successful in attracting the highest levels of diverse talent to their boards. "Finding directors of any kind is more difficult than ever," Daum said. "Active CEOs, who are most wanted, are often not available for board duty. Boards need a well defined process to find directors they need." Among key findings of the study are: * Female Representation: 16 percent of S&P 200 directors were women and 97 percent of S&P 200 companies had at least one woman director. While 63 percent of male directors are active or retired chairmen, presidents or CEOs, only 26 percent of women fit in the same category. On the other hand, 22 percent of women directors come from other corporate executive positions, while only nine percent of men do. Women also lead with backgrounds from the academic/not-for-profit world. A total of 23 percent of women directors come from this category, while only eight percent of men do. * Minority Representation: 15 percent of directors were minorities (African-American, Hispanic, or Asian), and 90 percent of S&P 200 companies had at least one minority director. Approximately 36 percent of minority directors are active CEOs, virtually the same percentage as non-minority directors (38 percent); however, there are fewer retired CEOs (six percent versus 21 percent). In addition, boards are recruiting minority directors from fields not traditionally known for yielding corporate directors, such as the academic/nonprofit community. While only nine percent of non-minority directors come from the academic/nonprofit sector, 17 percent of minority directors have this background. * Board Leadership: Women and minorities have made only modest headway into board leadership. A mere six percent of women are lead or presiding directors. And, while women directors comprise 23 percent of nominating/governance committee members, 21 percent of audit committee members and 20 percent of compensation committee members, representation as chairs of each of these three committees, respectively, is 17 percent, 11 percent and seven percent. Percentages for minority directors are smaller than for women. * Diversity by Industry: There is a wide variation of diversity representation by industry. At the high end, women represent 20 percent of directors in consumer non-cyclical businesses and 18 percent of directors in services but only 10 percent of all directors on boards of capital goods companies. Minority directors have the greatest representation in consumer cyclical companies at 20 percent and the lowest representation in energy and consumer goods at 10 percent. Spencer Stuart's 2006 Board Diversity study is available on the firm's web site at http://www.spencerstuart.com. About Spencer Stuart Spencer Stuart is one of the world's leading executive search consulting firms. Privately held since 1956, Spencer Stuart applies its extensive knowledge of industries, functions and talent to advise select clients -- ranging from major multinationals to emerging companies to nonprofit organizations -- and address their leadership requirements. Through 50 offices in more than 25 countries and a broad range of practice groups, Spencer Stuart consultants focus on senior-level executive search, board director appointments, succession planning and in-depth senior executive management assessments. For more information on Spencer Stuart, please visit www.spencerstuart.com.
SOURCE Spencer Stuart
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