Legal Commentary

Well, if you haven?t noticed, proxy season is here. Companies have sent their glossy annual reports, ballots, and financial statements. Based on my annual informal poll of my Business Associations students, I?m guessing that many of you simply throwaway the annual reports and ballots you receive. However, I always take time to at least glance through the materials. This year, I?ll be returning ballots for Genentech, Goldman Sachs, and Northwestern Mutual.

The ballots solict my votes for members of the Board of Directors. Collectively, I?ll be voting for 21 men and three women (three are people of color), if I accept the company recommendations. These proxy ballots have me wondering: where are all the women?

Although this is obviously a small sample of companies in just three industries (biotechnology, financial services, and insurance), they closely reflect national figures. A recent study shows a severe underrepresentation of women in board rooms (about 17%), a similar underrepresentation of minorities (about 15%), with particularly low representation of Hispanics.

This is about more than tokenism. Board discussions are certainly richer when those at the table can bring varied backgrounds and perspectives to bear on relevant company issues. In fact, here?s an academic paper that finds ?[a]fter controlling for size, industry, and other corporate governance measures? [a] significant positive relationships between the fraction of women or minorities on the board and firm value.?

Surely we?ve come a long way in board diversity, but we?ve still got a long way to go.