Securities and Exchange Commission disclosures are of small help to investors who want to put their money in companies that prize board diversity, the General Accountability Office (GAO) said in a report issued Monday.
The “SEC leaves it up to companies to define diversity in ways they consider appropriate [yet] some companies have used such broad definitions of diversity that the concept conveys little meaning to investors,” the investigative arm of Congress said in the report.
The GAO noted that in SEC filings, some companies have included such things as specialized knowledge, skills and experience in their definition of board diversity.
In the report, the researchers said the SEC lags behind foreign regulators in pushing for more women on corporate boards.
Germany requires 30 percent of board seats at some public companies be filled by women, while Norway has a quota of 40 percent.
By contrast, at current rates it will take S&P 1500 companies 10 years on average to reach the 30 percent figure and over 40 years before there is an equal number of women and men on boards, forecasts the study.
Among industry sectors, household and personal products company boards have the highest representation of women with 26.4 percent, while semiconductor companies bring up the rear at 8.8 percent.
The GAO said factors inhibiting the growth of the number of women in corporate governance include the failure of boards to actively recruit women; lower representation of women than men in the traditional job pipeline for board positions, and the low turnover of board seats.
Among ways the GAO said women representation could be increased on boards would be requiring slates of board candidates to include at least one woman and for boards to expand the search for board members to non-traditional areas such as academia, non-profits and the federal government.