An effort to increase diversity on the boards of publicly traded companies.
Background
In 2020, Washington became the second state—after California—to address gender diversity on public company boards through state corporate law. This was done via Senate Bill 6037, known as the Women on Corporate Boards Act.
Effective January 1, 2022, the Act requires publicly traded companies headquartered in Washington to review their diversity efforts if women make up less than 25% of their board. These companies must then report to shareholders on the actions they have taken to increase the number of women and other underrepresented groups. This is known as a “comply or explain” approach.
Learn more about the Corporate Boards Act
The Data
When the Women’s Commission was established in 2018, we were specifically tasked with identifying strategies to increase the number of women on corporate boards. In 2019, WSWC’s Economic Security and Opportunity Committee and staff conducted research to assess the board makeup of publicly traded companies in Washington. We found:
The Commission also hosted a panel of several experts to discuss strategies to increase the number of women on corporate boards and garner support for the pending legislation.
Watch starting minute 36.40In addition, you can also listen to the testimony of our previous Executive Director, Michelle Gonzales, and the full hearing of the legislation here.
Watch the full hearingThe Data
To assess compliance with the Women on Corporate Boards Act, WSWC conducted follow-up research on the top publicly traded companies headquartered in Washington five years after the law’s passage.
Our 2024 findings show steady progress in the number of women serving on corporate boards. However, the data also highlights an important gap of gender representation on executive teams.
*Nine of the 73 publicly traded companies examined in 2019 were either acquired by another company, went private, or did not have published board information. These companies were excluded from the 2024 study.
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The updated findings show progress on gender diversity, but as women make up 50% of Washington’s population, they are still highly underrepresented in the leadership roles.
In 2019, 58% of companies were compliant with the 25% metric, while in 2024, 78% of companies met the metric. This is a 20% increase in the number of companies with at least ¼ board members identifying as women.
All Chief Executive Officers (CEO) for the 64 companies included in the study, only 3 were women.
Women were also underrepresented among the Chief Financial Officers (CFO), holding only 25% of these positions.
Contrastingly, research showed women make up 80% of the Chief HR Officers (CHRO). These positions make, on average, $100,000 less than CFOs, demonstrating a persistent disparity in the highest paid c-suite occupations.
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