A new report shows that Colorado companies are making progress on increasing the number of women on boards, reaching a percentage that is on par with the national average after nearly a decade of tracking the numbers.
The latest survey by Boardbound of the Women’s Leadership Foundation found that women held 21% of the board seats on Colorado public companies at the end of 2020, an increase of nearly 4 percentage points in a year. That’s the fastest rise since Boardbound began the surveys in 2011.
“We found only 7% of the board positions of Colorado companies were held by women. It was a real shock that it was so low,” said Jo Lynne Whiting, Boardbound chairwoman.
Since then, the organization has worked with company CEOs to raise awareness, recognize successes and offer support, such as connecting companies with qualified candidates. Boardbound sometimes partners with national organizations to identify prospective board members.
The program also works with people interested in serving on corporate boards and on boards for nonprofits, hospitals and state and local governments.
“Our goal is to have Colorado be a national leader,” Whiting said.
So, the progress in closing the gap with the national average is encouraging, she added.
For comparison purposes, Boardbound uses the benchmark of the Russell 3000 Index, which tracks the performance of the 3,000 largest U.S.-traded stocks. While 21% of the board members at Colorado’s 103 public companies are women, 23% of the board members at the 71 Colorado companies listed on the Russell 3000 are women. The national average for the index is 23.1%.
Colorado has made significant progress since the first analysis in 2011, Whiting said. A decade ago, only two companies had three women on their boards of directors: Newmont Mining and CoBiz. Now, 21 companies have at least three women on their boards.
“As recently as 2014, the majority of Colorado companies were all male,” Whiting said. “Now we have just 20% that are all-male and 80% have at least one woman.”
Boardbound said eight Colorado public companies have gender-balanced boards: Akerna, DaVita, Newmont, Summit Materials, Viveve, Westwater Resources, Whiting Petroleum and Vail Resorts.
Including more women and people of different races, ethnicities and backgrounds on boards isn’t just something to do to check boxes, Whiting and two Colorado CEOs said.
“I think there’s more understanding of the research that shows that it’s good for the company’s own performance to have diversity,” Whiting said.
Research shows that companies with female board members are more profitable, have faster earnings growth and issue fewer financial restatements to fix errors, Whiting said. A study by university researchers and published in the American Accounting Association journal Accounting Horizons said having women on a board reduces the chance of financial restatement by 40%.
Companies with three or more female board members saw median gains in return on equity of 10 percentage points and earnings per share of 37% from 2011-16, according to a report by MSCI, which provides research and data for investors. Companies that began the period with no women on the board saw median changes of 1 percentage point in ROE and -8% earnings per share, the report said.
The research doesn’t claim cause and effect, but suggests that diversity leads to better, more deliberative decision making. Anne Noonan, one of just four female CEOs in Colorado, said there is more discussion and transparency on boards that have female members. She and three other women and four men make up the board of Summit Materials, a Denver-based company that supplies aggregates, cement, asphalt and other materials.
“I don’t like to generalize. There are different personalities, male and female,” Noonan said. “I do think women are more inclined to sit…