Board duty: Progress for women, but hurdles remain

A recent Government Accountability Office report on women on the boards of public companies found good news and bad news.

The good news is that the number of women serving on boards has increased. The bad news is serious roadblocks may slow their progress.

But it got me thinking: How’s the representation of women on the boards of the public contracting companies?

Well, I’m happy to report that government contractors are doing better than the national average.

GAO found that 16 percent of the board seats on the S&P 1500 are held by women in 2014. In 1997, the figure was 8 percent.

From their company websites, I’ve pulled the numbers for 15 of the public companies that are primarily in government market and found that the percentage was 18.9 percent. A decade ago, the percentage was 7.8 percent.

As you can see from the chart below, all of the companies except one had at least one woman on their corporate board. Lockheed Martin leads the way with four, which includes their Chairman and CEO Marillyn Hewson.

CACI is the only company that currently doesn’t have women on its board, but as you can see from the second chart, they did in 2005 have one woman on the board, while four of the others had none. Because of changes in the market, the two charts don't match up exactly.

In 2005, three of the companies didn’t exist – Engility, Vectrus and SAIC. I counted Leidos in the chart because they claim the SAIC heritage. I included NCI, ICF and Booz Allen in the 2005 chart because NCI and ICF went public in 2006 and 2007 respectively. Booz Allen went public in 2010, but is included because I figure years is a long enough track record. Engility, Vectrus and SAIC have only been independent for a few years so I didn't include them.

While government contractors are doing well with their representation of women on corporate boards, I think potential female board members face the same risks and barriers to entry that GAO cited for the broader corporate community.

Some of the challenges GAO discusses include not making diversity a priority, fewer women in the traditional pipeline—CEOs and/or previous board experience—and the low turnover of board seats.

In interviews with board members, GAO also found these trends:

• Board members have a tendency to rely on their personal networks to identify new board candidates. Men tend to network with other men, and since more men are board members, more men will be identified as candidates
• Unconscious bias where board members may be drawn to candidates who look and sound like they do, and there is a desire that new members “fit-in”
• There is some indication that the appointment of women slows on boards that already have one or two women

So, why is this big deal?

GAO cites growing research that finds that companies with more diverse boards make better decisions. With a diverse group, boards have to work harder to reach consensus because there is a broader range of perspectives.

There is some evidence indicating companies with gender-diverse boards have better financial results, though not all of the research GAO looked at found this. But there is value to boards looking like their employee and customer base, GAO said.

Plus, a more diverse board taps into a wider talent pool.

While I can’t calculate this for the government market, GAO concluded that while there has been improvement, it likely will take decades until there is equal representation of men and women on corporate boards. It's likely the government market will face the same hurdles.