Generally, a public company’s board of directors is responsible for managing the business and affairs of the corporation, including representing a company’s shareholders and protecting their interests. Corporate boards range in size and according to a 2013 survey of public companies, the average board size was about nine directors, with larger companies often having more. Corporate boards are responsible for overseeing management performance on behalf of shareholders and selecting and overseeing the company’s CEO, among other duties, and directors are compensated for their work. The board of directors generally establishes committees to enhance the effectiveness of its oversight and focus on matters of particular concern. See figure 1 for common corporate board committees and their key duties. Research and other literature provide a number of reasons as to why it is important for corporate boards to be diverse. For instance, research has shown that the broader range of perspectives represented in diverse groups require individuals to work harder to come to a consensus, which can lead to better decisions. Some research has found that gender diverse boards may have a positive impact on a company’s financial performance, but other research has not. These mixed results depend, in part, on differences in how financial performance was defined and what methodologies were used. Various reports on board diversity also highlight that diverse boards make good business sense because they can better reflect the employee and customer base, and they can tap into the skills of a wider talent pool. Publicly traded companies are required by the SEC to disclose to their shareholders certain corporate governance information for shareholder meetings if action is to be taken with respect to the election of directors. Companies disclose this information in proxy statements that are filed with the SEC.The SEC’s mission includes protecting investors, and disclosure is meant to provide investors with important information about companies’ financial condition and business practices for making informed investment and voting decisions. Investors owning shares in a company generally have the ability to participate in corporate governance by voting on who should be a member of the board of directors. In December 2009, the SEC published a rule that requires companies to disclose certain information on board diversity in proxy statements filed with the Commission if action is to be taken with respect to the election of directors, including whether, and if so how, boards consider diversity in the director nominating process. Also, if boards have a policy for considering diversity when identifying director nominees, they must disclose how this policy is implemented and how the board assesses the effectiveness of its policy. According to various publications on corporate governance or gender diversity, several countries are implementing measures to address gender diversity in the boardroom such as: Quotas. Some countries, such as Germany and Norway, among several other countries, have government quotas to increase the percentage of women on boards. For example, Germany requires that 30 percent of board seats at certain public companies be allocated for women and Norway requires that 40 percent be allocated for women. Disclosure policies. Other countries, such as Australia and Canada, have adopted “comply or explain” disclosure arrangements. Under such arrangements, if companies choose not to implement or comply with certain recommendations or government-suggested approaches related to board diversity— such as establishing a diversity policy—they must disclose why. Voluntary approaches. The United Kingdom has aimed to increase the representation of female directors through a voluntary, target-based approach rather than through the use of government-mandated interventions. As part of this effort, the government worked with leading companies, investors, and search firms to encourage the adoption of a set of recommendations to increase representation of women on boards. These recommendations included, for example, that certain companies achieve a minimum of 25 percent women on boards by 2015 and publicly disclose the proportion of women on the company’s board, management, and workforce. In addition, executive search firms were encouraged to draw up a voluntary code to address gender diversity and best practices covering relevant search criteria for board directors. Selected search firms in the United Kingdom have entered into a voluntary Code of Conduct to address gender diversity on boards in their search processes, including trying to ensure that at least 30 percent of proposed candidates are women. Based on our analysis, we found that women’s representation on boards of companies in the S&P 1500 has increased steadily over the past 17 years, from about 8 percent in 1997 to about 16 percent in 2014. As figure 2 illustrates, part of what is driving this increase is the rise in women’s representation among new board directors—directors who joined the board each year. While the number of female board directors among S&P 1500 companies has been increasing, particularly in recent years, we estimated that it will likely take a considerable amount of time to achieve greater gender balance. When we projected the representation of women on boards into the future assuming that women join boards in equal proportion to men— a proportion more than twice what it currently is—we estimated it could take about 10 years from 2014 for women to comprise 30 percent of board directors and more than 40 years for the representation of women on boards to match that of men (see fig. 3). Appendix I contains more information about this projection. Even if every future board vacancy were filled by a woman, we estimated that it would take until 2024 for women to approach parity with men in the boardroom. Using 2014 data, we also found that women’s representation on boards differed by company size and industry (see fig. 4) and that there were differences in certain characteristics between male and female directors, such as age and tenure (see fig.5). Based on our interviews with stakeholders, analysis of ISS board director data, and our review of relevant literature, we identified various factors that may hinder increases in women’s representation on corporate boards: boards not prioritizing diversity in recruitment efforts; lower representation of women in the traditional pipeline for board positions; and low turnover of board seats. Several stakeholders we interviewed suggested boards not prioritizing diversity in identifying and selecting directors is a factor affecting gender diversity on corporate boards. Specifically, 9 of the 19 stakeholders we interviewed cited board directors’ tendencies to rely on their personal networks to identify new board candidates as a factor that contributes to women’s lower representation. For example, three of the nine stakeholders specifically noted that men tend to network with other men, and given that the majority of board directors are men, this may prevent women from obtaining vacant board seats. Furthermore, 8 of the 19 stakeholders suggested unconscious bias may be a factor affecting the selection of women onto boards. Several stakeholders we interviewed discussed board directors’ desire to maintain a certain level of comfort in the boardroom. For example, one stakeholder observed that boards may have a tendency to seek other directors who look and sound like they do. Another noted that boards want to ensure new members “fit in” which may lead them to recruit people they know and can limit gender diversity on boards. We found some indication that boards’ appointment of women slows down when they already have one or two women on the board. In 2014, 29 percent of companies in the S&P 500 that had no women on the board added a woman; 15 percent of companies that had one woman on the board added a woman; and 6 percent of companies that had two women on the board added a woman. Small and medium-sized companies generally followed the same pattern. Further, three stakeholders we interviewed specifically suggested that boards may add a “token” woman to appear as though they are focused on diversity without making diversity a priority. Eleven of the 19 stakeholders we interviewed highlighted the low representation of women in the traditional pipeline for board seats—with either CEO or board experience—as another factor affecting the representation of women on boards. According to recent reports, current and former CEOs composed nearly half of new appointments to boards of Fortune 500 companies in 2014, and 4 percent of CEOs in the S&P 1500 in 2014 were women. One CEO we interviewed said that as long as boards limit their searches to the pool of female executives in the traditional pipeline, they are going to have a hard time finding female candidates. Another factor that may help explain why progress for women has been slow and greater gender balance could take time is that boards have only a small number of vacant seats each year. Based on our analysis, we found that board turnover has remained relatively consistent since 1998, with 4 percent of seats in the S&P 1500 filled, on average, by new board directors each year. In 2014, we found that there were 614 new board directors out of 14,064 seats among all companies in the S&P 1500. Seven of the 19 stakeholders we interviewed similarly cited low turnover, in large part due to the long tenure of most board directors, as a barrier to increasing women’s representation on boards. Based on relevant literature and discussions with researchers, organizations, and institutions knowledgeable about corporate governance and board diversity, we identified a number of potential strategies for increasing gender diversity on corporate boards (see table 1). While the stakeholders we interviewed generally agreed on the importance of diverse boards many noted that there is no one-size-fits- all solution to addressing diversity on boards and highlighted advantages and disadvantages of various strategies for increasing gender diversity on corporate boards. Potential strategies for encouraging or incentivizing boards to prioritize and address gender diversity as part of their agenda could include: Requiring a diverse slate of candidates to include at least one woman. Eleven stakeholders we interviewed supported boards requiring a gender diverse slate of candidates.Two specifically suggested that boards should aim for slates that are half women and half men. Two of the 11 advocated that boards include more than one woman on a slate of candidates, expressing concern that a board policy requiring that only one woman be included on a slate could lead to tokenism. This was also a concern for three of the five stakeholders who did not support this strategy. Setting voluntary targets. Ten stakeholders we interviewed supported boards setting voluntary diversity targets with two stakeholders citing the importance of having targets or internal goals for monitoring progress. Four stakeholders opposed voluntary targets.