Getting Women Into the Board Room

The following post is by Amy Galloway, a student at the University of Denver Sturm College of Law who took Comparative Corporate Law in the Fall of 2007.  For a thoughtful piece on the importance of diversity in the corporate board room, see Lisa Fairfax, Professor, University of Maryland, The Bottom Line on Board Diversity.  For a study on the relationship between the number of women on the board and corporate performance, go here.

Getting Women Into the Board Room

In 1934, The Coca-Cola Company appointed Lettie Pate Evans, the first women to the board of directors of a major US corporation. Seventy-three years later, women hold only 13.6% of board seats in the United States (based on 2003 data taken from Fortune 500). In Europe, the numbers are worse; women make up only 8.3% of the available board of director seats. In Spain and Italy, the worst countries for the advancement of women to the board, women make up only 4.3% and 1.6% respectively. 

One way to deal with the problem is to let the market resolve the matter, the approach taken in the US.  The other is to adopt specific legislation mandating greater diversity.  In 2003, Norway made a decision to enact legislation requiring 40% of board membership of publicly owned companies to be female by 2007. State owned companies were already required to do this and successfully complied. Although Norway has been fairly progressive in gender equality, the corporate board room remained a man’s domain. In the years since Norway enacted the legislation, the percentage of women on the board of directors climbed from 6% to 28.6% in 2006. Spain followed Norway’s lead and enacted similar legislation requiring the 40% quota in 2007. Spain, however, has not historically been progressive and has a great need for the law to improve the equality in that country. France and Israel have also considered similar laws.