Coinciding with Governor Roy Cooper’s “Equal Pay Day” proclamation and the National Women’s History Alliance 2024 theme of celebrating “Women Who Advocate for Equity, Diversity and Inclusion,” N.C. Department of Commerce Secretary Machelle Baker Sanders is urging greater gender diversity on corporate boards to better represent North Carolina’s demographics. Companies with diverse boards not only are more reflective of the population but perform better and drive greater profitability for their shareholders.
“Increasing gender diversity on corporate boards and in leadership positions benefits company value, employee retention and satisfaction, and our economy,” said NC Commerce Secretary, Machelle Baker Sanders. “Companies are attracted to North Carolina because of our highly skilled and diverse workforce, and board rooms should reflect the demographics of the company’s customers as well as the state where they conduct business.”
Women are underrepresented among the board of directors of the 50 largest publicly traded companies in North Carolina, according to research conducted by the University of North Carolina’s School of Law Director Diversity Initiative. Despite making up 51% of the total North Carolina population, women only represent 26.4% of board members from the top 50 North Carolina public companies. Over the past decade, women’s representation on the top corporate boards in North Carolina has more than doubled but is still well short of parity. This lack of representation is further compounded for women of color. According to the most recent data obtained from the census by UNC’s Diversity Director Initiative (DDI), People of color hold only 15.7% of director positions, according to board proxy statements from the 2021 census year obtained by UNC’s Director Diversity Initiative (DDI). DDI plans to release new data later this year.
Fourth quarter 2023 data from 50/50 Women on Boards shows that 27.2% of NC public company board members were women. The data includes a slightly larger group of companies than DDI’s 2021 data, but still indicates a slight increase in women’s representation on corporate boards in North Carolina over the past two years. The 50/50 Women on Boards Gender Diversity Index shows that North Carolina is in the top half of all states for representation of women on corporate boards.
Disproportionate representation of women and people of color on corporate boards that compensate directors is a trend that is consistent across Fortune 100 and Fortune 500 companies. In 2022, women held more than 30% of Fortune 500 board seats, an increase from 26.5% in 2022, according to data from Deloitte and the Alliance for Board Diversity’s Missing Pieces report.
A 2020 study by McKinsey revealed that companies with more diverse boards and executive teams are 25 percent more likely to deliver above-average profitability and outperform their less-diverse corporate counterparts.
Several North Carolina companies are working to maintain boards that more accurately reflect North Carolina’s demographics. A list of companies with 50% or more women or diverse directors can be found on the DDI website by clicking the link to download the 2021 census results. According to 50/50 Women on Boards, 3.4% of North Carolina’s public boards are gender balanced.
Under Sec. Sanders’ leadership, the Department has encouraged businesses to commit to practices that improve outcomes for North Carolina’s workforce like offering family-friendly policies, creating work-based learning programs, or contracting with women and minority-owned businesses, all strategies in the state’s strategic economic development plan, the First in Talent plan. These priorities align with Governor Cooper’s vision for North Carolinians and his executive actions to improve working conditions of state employees and working women, including paid parental leave, pregnancy accommodations, and prohibiting the use of salary history in state hiring processes. These policies have coincided with North Carolina being named the top state for business two years in a row by CNBC.
“Companies that value diversity and demonstrate their commitment to equity by hiring diverse leaders and directors signal a commitment to inclusiveness, which is felt by employees at all levels of the company,” said Lissa Broome, the head of the Director Diversity Initiative at the University of North Carolina School of Law.
Resources are available for companies interested in hiring women and directors of color on the Director Diversity Initiative Partner webpage. The DDI maintains a database of almost 1,000 potential directors, many of whom are women or people of color, and provides a free service that identifies members of the database who meet the specific criteria a company may be seeking to fill for an open director seat.
As of November 2023, 49.8% of Governor Cooper’s appointments to state boards and commissions were women.
For a list of Women’s History Month celebrations in your area, visit the N.C. Department of Natural and Cultural Resources website.