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Adding Women to Corporate Boards Is a Smart Business Decision — And Retail Companies Are Taking Note

As more women across the industry ascend to C-suite roles, there’s also notable movement in another key area of the business: corporate boards.

According to a recent report from Women Business Collaborative, 2021 was a “watershed year.” Women held 27% of all board seats, up from 24% in 2020. This marked the largest year-over-year increase for the Russell 3000, which includes the 3,000 largest public companies in the U.S.

The momentum is continuing as 2022 rolls on, with retailers like Macy’s Inc. leading the way. In late March, the department store added two women — Marie Chandoha, former president and CEO of Charles Schwab Investment Management, and Jill Granoff, former Vince CEO and managing partner of Eurazeo — to its board, effective April 1.

The announcement marked the latest in a string of notable appointments over the last few years — and a shift in the way retail companies are selecting people to their boards. That is, looking beyond a small pool of CEOs that are often mainly composed of Caucasian men. As of October, 8.2% of Fortune 500 CEOs were women, according to the 2021 Women CEOs in America Report.

For Macy’s, board diversity has been a goal of the company for years. The retailer first reached gender parity on its board in 2015 and has hovered around that percentage since then, never dropping below 40%. With these latest appointments, its board is now 50% women, with 31% non- white members, and three out of 14 identifying as members of the LGBTQ community.

“Having such strong leaders from all backgrounds is inspiring to our colleagues,” said Elisa Garcia, chief legal officer at Macy’s Inc. “It reassures them that they could take a similar path [here].”

Macy’s is not the only retail company progressing in this realm. Gap Inc.’s 13-person board includes six women. And Fortune’s 2022 Modern Board 25 — which ranks corporate boards by gender, racial and age diversity — gave high marks to Walmart, Best Buy and Amazon.

Now, more companies are seeking to correct the historic lack of representation in these governing roles for women.

How retail stacks up

In 2010, 16% of people on boards in the S&P 500 were women, according to data from the Women’s Forum of New York, which seeks to promote female leaders across all industries. In 2021, that number rose to 30%.

“The pace of change has accelerated, but not enough,” said Janice Reals Ellig, founder of the Women’s Forum of New York’s Corporate Board Initiative and its Breakfast of Corporate Champions.

The forum’s stated goal is to achieve 50% gender parity on boards by 2025, which would mean filling half of the board openings by women every year until then. Given the lofty goal, Ellig said she would be satisfied with 40%.

Compared to other industries, retail is leading the way, ranking among the highest-performing industries for board gender diversity across the S&P 500, according to a July 2021 study from nonprofit BoardReady.

Caleres Inc. has been a particular standout. The company’s board is 55% women (six of 11 directors), and 20% of the members identify as racially or ethnically diverse.

“It took a concentrated effort that began more than five years ago,” said Caleres chairman and CEO Diane Sullivan, who explained the company proactively looked for female leaders who could reflect its consumers, 70% of whom are women and children. “We are a stronger, more strategic company because our board has the thinking, experience and capabilities we need, while at the same time reflecting the communities we serve.”

At the Women’s Forum of New York’s Breakfast of Corporate Champions in New York in November, Caleres was one of only 44 companies from all industries recognized for achieving or exceeding board gender parity. In total, about 240 companies were saluted for having 35% or more female representation, including Tapestry, Designer Brands, Gap, Kohl’s, Macy’s, Nordstrom, TJX Companies, Foot Locker, Genesco, PVH, Wolverine World Wide and more.

Tapestry Inc., the parent to Coach, Kate Spade and Stuart Weitzman, has a 10-person board composed of 50% women, helmed by chair Anne Gates. Like Sullivan, Tapestry CEO Joanne Crevoiserat said the board aims to represent its diverse consumer base. As such, 40% of the board also identifies as people of color.

“When you lack gender parity, you miss out on the wealth of perspectives you would otherwise achieve with a balanced board,” Crevoiserat said, later adding, “We know that having a diverse range of perspectives, backgrounds and experiences makes us more innovative and successful, and it brings us closer to our consumers. Both in our business and at the board level, a slate of diverse candidates is critical.”

When Board Gender Diversity is the law

Until recently, it was a law for companies headquartered California to add women to their boards. California Senate Bill No. 826, which passed in 2018, required public companies based there to appoint at least one female director to their boards by the end of 2019 or face fines. A Los Angeles judge struck down the law on Friday, ruling that it violated the equal protection clause of California’s constitution.

But in the time since the bill had passed, the number of women on the Golden State’s public boards had more than doubled, according to the nonprofit California Partners Project, which was partly founded by Governor Newsom’s wife, Jennifer Siebel Newsom. And in 2021, over half (50.4%) of board appointees in California were women.

Leigha Weinberg, who leads gender equity work for the California Partners Project, said the economic benefits of improving gender board diversity include employee satisfaction, better risk management and consumer safety and less fraud.

“The research shows — and the law was based on the idea — that, when you get to three or more women directors, you see the greatest impact and benefit of that board diversity,” she said.

One example of the law’s impact is Manhattan Beach, Calif.-based Skechers USA Inc., which in April added Yolanda Macias to its corporate board, bringing the number of women on its eight-person board to three (all three were appointed over the last three years).

Outside the U.S., legal-based gender equality efforts are also gaining momentum. Labor and employment officials from the European Union approved a plan in March to require gender balance on corporate boards of public companies.

Under the new rules, public firms with headquarters in the EU must aim for 40% of non-executive director roles to be held by women by 2027. The impact of such legislation is yet to be seen.

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