Retail Industry Leading the Charge in Board Refreshment, According to New PwC Report

Analysis Compares Board Demographics of Nine Industries; Banking and Capital Markets Boards Have Highest Percentage of Women Technology Skills for Directors Will Be Key Across Sectors

 

New York, February 23, 2017 – Board composition is one of the top issues for investors in 2017, and while some industries have made strides in diversifying their boardrooms, other industries are lagging behind, according to PwC’s new report A Look At Board Composition. The report analyzes the board demographics of select companies in nine industries to see how they compared to each other and to the S&P 500.

“Companies in every industry are feeling investor pressure to refresh their boards, and many are focusing on diversity and adding more women directors. But diversity is more than a gender issue – it’s about race, ethnicity, skills, experience, age and even geography, in addition to diversity of thought and perspective,” said Paula Loop, Leader of PwC’s Governance Insights Center. “The picture of what a particular industry looks like today may not be the same in a few years as industry lines have started to blur, making a diverse boardroom even more important. In fact, experts we’ve interviewed prioritize skills like technology expertise for new directors.”

The report examines gender diversity on boards as this is an indicator of the efforts some boards are making to become more diverse overall. While the analysis shows that most industries didn’t veer too far from the S&P 500 averages for most benchmarking categories, including percentage of women on boards, female directors added in the latest proxy, mandatory retirement age and term limits, a few industries stand out. Retail in particular is leading the charge when it comes to board refreshment; this industry also has the lowest average age (60). Surprisingly, technology had one of the highest average tenures (10 years).

Another surprising finding came from the banking and capital markets industry, which is often considered to be male-dominated. Boards in this industry had one of the highest percentage of women at 26 percent. Both the entertainment and media and the communications industries were also ahead of the curve when it came to women in the boardroom, with the highest and second-highest percentages of new female directors. Retail tied with communications for second-highest.

A breakdown by industry of board refreshment efforts:

Retail
  • Percentage of women on the board: 26 percent (S&P 500 average is 21 percent)
  • Female directors added in latest proxy: 44 percent (S&P 500 average is 32 percent)
  • Companies with mandatory retirement age: 91 percent (S&P 500 average is 73 percent)
  • Companies with term limits: 18 percent (S&P 500 average is four percent)
Banking and Capital Markets
  • Percentage of women on the board: 26 percent
  • Female directors added in latest proxy: 13 percent
  • Companies with mandatory retirement age: 62 percent
  • Companies with term limits: zero percent
Communications
  • Percentage of women on the board: 20 percent
  • Female directors added in latest proxy: 44 percent
  • Companies with mandatory retirement age: 67 percent
  • Companies with term limits: zero percent
Entertainment and Media
  • Percentage of women on the board: 22 percent
  • Female directors added in latest proxy: 60 percent
  • Companies with mandatory retirement age: 29 percent
  • Companies with term limits: 12 percent
Industrial Products
  • Percentage of women on the board: 21 percent
  • Female directors added in latest proxy: 13 percent
  • Companies with mandatory retirement age: 78 percent
  • Companies with term limits: four percent
Insurance
  • Percentage of women on the board: 21 percent
  • Female directors added in latest proxy: seven percent
  • Companies with mandatory retirement age: 75 percent
  • Companies with term limits: zero percent
Pharma and Life Sciences
  • Percentage of women on the board: 23 percent
  • Female directors added in latest proxy: 25 percent
  • Companies with mandatory retirement age: 56 percent
  • Companies with term limits: four percent
Power and Utilities
  • Percentage of women on the board: 22 percent
  • Female directors added in latest proxy: 22 percent
  • Companies with mandatory retirement age: 80 percent
  • Companies with term limits: four percent
Technology
  • Percentage of women on the board: 23 percent
  • Female directors added in latest proxy: 41 percent
  • Companies with mandatory retirement age: 31 percent
  • Companies with term limits: zero percent

To download the report, please visit: www.pwc.com/us/boardcomp

About PwC’s Governance Insights Center

PwC’s Governance Insights Center supports directors and investors with governance knowledge to answer tough questions and tackle complex challenges. Learn from our network of subject-matter experts, business leaders, and experienced peers as they share their insights and the latest thinking on current issues. Beyond governance, we help directors and investors better understand new financial accounting standards so they can make better oversight and investment decisions. The center connects all the dots for a more complete perspective. For more information, please visit: www.pwc.com/us/GovernanceInsightsCenter.  

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 223,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

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