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

Feb 21, 2006, 00:00 ET from Spencer Stuart

    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
     * 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

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