While companies are increasingly backing the move to install more female directors on their boards, the actual number of women sitting on boards has hardly grown, according to the Wall Street Journal.
The main reason for this? Not enough male board members are leaving their seats.
The Journal cites a study by business researchers at Conference Board that assessed Russell 3000 companies. These companies represent a majority of U.S.-traded stocks. The study shows that on average board directors keep their seats for 10.4 years, and about one-fourth of them leave their seats after 15 years. The study also found that one-fifth of board directors are older than 70 years.
Investors and legislators are pushing to change board makeup. Investors such as State Street Global Advisors and BlackRock have supported the greater inclusion of female board members, noting studies that link better shareholder returns to having more female board members.
In 2018, California became the first state to order companies to have at least one female board member by this year and two by 2021.
But board turnover has been limited by the lack of term limits and other roadblocks. Some companies, for example, are wary of replacing incumbent board members, which could result in the loss of institutional knowledge and disrupt board dynamics.
"In the last two decades, there’s been a sweeping revolution in the field of corporate governance," Matteo Tonello, managing director for corporate governance research at Conference Board, told the Journal. "Yet if you look at the composition of the board, at its core, it remains the same at many public companies and quite resistant to change."