After years of progress, increase in women on Colorado corporate boards stalls

After several years of growth in the number of women on the boards of Colorado companies, progress stalled in 2022, said an organization that recruits and prepares women to take their seats in the boardroom.

A new report by Boardbound by Women’s Leadership Foundation said 24% of the board seats at Colorado public companies were held by women last year, roughly the same percentage as in 2021.

Another disappointing finding: research identified just four of the 33 new female directors as women of color. About a third of the women who joined boards in 2021 were women of color.

“We’ve had steady increases for several years, so it is disappointing to see,” said Jo Lynne Whiting, a director of Boardbound.

Colorado lags behind the national average for the percentage of female board members. Colorado Fortune 1000 companies fell behind the national average by about 2 percentage points in 2022 after being on par the previous year.

And Colorado companies on the Russell 3000 Index are about 3 percentage points behind the national average. The index tracks the performance of the top 3,000 U.S. publicly traded companies.

“But there are a few bright spots. The energy companies have really made a turnaround in the last few years,” Whiting said.

Approximately 27% of the board seats at energy companies in Colorado were held by women in 2020. In 2016, only 5% of the board positions at energy companies were filled by women, according to Boardbound.

Overall progress has been significant since 2011 when Boardbound’s first report found that women accounted for only 11% of the board members, or 13 men for every woman. Now, 60% of Colorado companies have two or more female directors, said Sue Williamson, Boardbound’s executive director.

“However, we are concerned that fewer women and fewer women of color became board directors in 2022 than in 2021,” Williamson said in a statement.

Women make up 50% or more of the boards at four Colorado companies: RE/MAX, at 64%; Viveve Medical, 60%; Summit Materials, 56%; and Vail Resorts, 50%.

But only 5% of Colorado’s 122 public companies have a female CEO and only 3% have a female board chair, according to Boardbound’s report.

Whiting said it’s not clear why Colorado companies didn’t make headway last year in diversifying their boards. “We hope it’s temporary. There’s been a lot of talk about recession and when there’s a retrenchment, often we do tend to stall on progress.”

Audacious goal

When the foundation’s first report showed just 7% of the board members at public companies in Colorado were women, there was a sense of shock and a pledge to change the numbers. Corporate CEOs and leaders worked with Boardbound to identify and prepare potential candidates. They started programs offering one-on-one mentoring, leadership training and networking opportunities.

Gloria Zamora, a Boardbound director, leads the work with CEOs and an initiative to increase the number of Latinas in boardrooms. Zamora said in 2016, when the percentage of women on boards was 11%, CEOs set a goal of doubling the numbers in two years.

“It was an audacious goal. It took us about two and a half years, but we got there,” said Zamora, who was the chief human relations office for four corporations and is now a consultant.

However, Zamora said women are still underrepresented in boardrooms, and that’s particularly true for women of color. Boardbound has an initiative specifically aimed at increasing the numbers of Latinas.

“It would take nine times as many Latinas to join boards to match their representation in the population,” Zamora said.

Research by the Alliance for Board Diversity found it would take two times as many white and Black women on boards and 2.5 times as many Asian women to match their representation in the population.

Trending toward diversity

A push to increase the number of female board directors comes as companies, investors and the public have demanded more diversity.

“There is an international and national trend to create diversity, not just gender but race and ethnicity on public boards,” said Aleks Miziolek, on the board of Solid Power, a Louisville-based developer of solid-state battery cells.

The Nasdaq approved rules requiring most of the listed companies to have one female director and one who is an underrepresented minority or LGBTQ, or publicly explain why they don’t. Institutional Shareholder Services, which provides data and analytics for companies, announced in 2020 that it would oppose the reelection of board nominating and governance chairs where there are no female directors.

In 2017, the Colorado legislature passed a resolution encouraging companies to have more diverse boards.

Employees, the public and job candidates increasingly care “who’s sitting at the top, who’s on the board,” Zamora said. The interest grew as anger over racism and other inequities flared after police officers killed George Floyd in 2020.

“I think a lot of companies did reflect on their corporate responsibility and the advantages of being inclusive and the disadvantages of not,” Whiting with Boardbound said.

Why it matters

Among the advantages of having women in the boardroom is a more robust bottom line, according to research cited by Boardbound. A 2019 analysis by McKinsey and Co. found that companies in the top 25% for gender diversity were more likely to have above-average profitability than the bottom 25%.

A five-year analysis of U.S. companies showed that companies with at least three women on the board reported gains in return on equity of 10 percentage points and gains in earnings per share of 37%, according to MSCI, an investment research firm.

“There really are a lot of business-driven advantages to having women and women of color,” Zamora said.

Latinos, for example, are part of a fast-growing buying force in the U.S. and accounted for $2.8 trillion in GDP in 2020, Zamora said. From 2010-2020, Latinos made up 73% of the growth in the U.S. labor force, according to a report by the Latino Donor Collaborative.

“If you are a corporation, you are going to be interested in one of the fastest-growing groups that have buying power,” Zamora said.

While boards have typically recruited people who are or have been CEOs, chief financial officers or other members of the C-suite, proponents of more diversity say changes in business, such as cybersecurity needs and new technologies, could open the door for women with specific skills and expertise. Miziolek, who has been on the Solid Power board for a year, said current members assessed their strengths and the company’s needs before adding a third female director.