Women score gains on Philly corporate boards but remain far from parity

Philadelphia’s largest public companies have made progress this year diversifying the boards of directors with more women, according to the Forum of Executive Women’s 2021 report.

Among the report’s highlights: 27 of the Philadelphia region’s top 100 public companies have 30% or more women on their boards. That’s the highest number in 20 years since the report was first published – and a 58% increase from the prior year.

“While we are pleased with the successes in our region, we are also mindful of the significant work that needs to be done to bring parity to our workplaces and our boards,” said Debbie Epstein Henry, forum president.

“The reality that five of the region’s top 100 public companies still have no female executives is staggering. We are also dismayed that women represent a mere 12% of top earners. These bleak data points are even more concerning as we continue to grapple with a national reckoning on race and an indeterminate term to a global pandemic, which has had a disproportionate negative impact on working women,” she added.

Given professional women’s departure from the workforce due to the pandemic, “we need to be hypervigilant of our pipeline” of candidates for boards, she said.

Two companies -- Navient Corp. and Tabula Rasa HealthCare -- have boards with more than 50% women. American Water Works Co., Cantaloupe, and AMETEK have more than 40% women board members. Those with more than 35% women include: CubeSmart, Essential Properties Realty Trust, Penn National Gaming, NRG Energy, and Unisys Corp.

Over the last decade, the number of Philadelphia companies with no female board members has fallen to five from 36, a huge improvement. Those five are Genesis Healthcare, Harmony Biosciences Holdings, inTEST Corp., Marlin Business Services, and Omega Flex.

Female board membership at Philadelphia public companies crossed the 20% threshold in 2020, up 3% since 2018, and a 10% gain since 2010, according to last year’s Forum report.

The Forum and accounting firm PwC track year-over-year statistics based on data from the region’s top 100 public companies by revenue. The report relied on the Securities and Exchange Commission filings for the fiscal year that ended on or before March 31, 2021.

The report also examines the representation of women in the political arena and how the 2020 election was pivotal in driving female candidacy. A copy can be found at https://foew.com.

Corporate America is bending slowly towards providing more disclosure of women and diverse candidates on boards.

At the start of 2021, the Nasdaq submitted a proposal to the SEC that would require Nasdaq-listed companies to disclose information about the diversity of the company’s board and to offer certain companies access to a complimentary board recruiting service. The proposal also required companies to have two diverse board directors or disclose why they didn’t meet the requirement in 2022. In August, the proposal was approved by the SEC.

Just last year, 32% of Philadelphia public companies weren’t disclosing any diversity data; now only 15% are silent on board composition, the Forum found this year.

While the overall trend is to provide more disclosure and detail of diversity data, not everyone is pleased with the Nasdaq’s new Board Diversity Rule. It requires all NASDAQ-listed companies to disclose board-level diversity data in 2022 and explain why if it does not have at least two members of its board of directors who self-identify as female, or who identify as an underrepresented minority or LGBTQ+.

This week, a conservative think tank took legal action against the SEC’s ruling.

The National Center for Public Policy Research filed a lawsuit over the SEC’s approval of the Nasdaq board diversity rules. The National Center, represented by the New Civil Liberties Alliance, argues that the SEC’s regulatory authority, established by the 1934 Securities and Exchange Act, is limited to regulation of securities to ensure honest markets and to enforce federal laws that punish fraud. The lawsuit asserts that approving market rules establishing quotas for boards of directors exceeds that limited authority.

“The SEC has grown increasingly politicized in recent years, and especially since the arrival of Chairman Gary Gensler,” said Scott Shepard, director of the National Center’s Free Enterprise Project. “It has a narrowly circumscribed authority: that of protecting shareholders in limited ways. In no way does this extend to social engineering of the sort attempted by the Nasdaq rule.”

“In light of our changes in the past few months, we have been evaluating potential board members and anticipate adding one or more high-quality professionals from diverse backgrounds by year-end,” said Lori Mayer, spokesperson of Genesis HealthCare, based in Kennett Square, Pa. Genesis replaced its CEO this year, and also some members rotated off the board.

The four Philly companies without women on boards did not respond.