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Abstract

While women have expanded their footprint in corporate America in recent years, they are still underrepresented in the upper echelons of corporate governance, specifically in boardrooms, which dictate the direction of a company. At the current rate, it will take more than four decades before women’s representation on corporate boards reaches parity with that of men. Women face obstacles that make it difficult to rise in the ranks of corporate America. This can be attributed to numerous factors that collectively burden women with expectations that are at odds with success. These factors include low representation of women in traditional pipelines to board seats, lack of flexibility in the workplace, male-driven work cultures, and disproportionate mentorship and sponsorship opportunities.

Why should companies care about diversity? The importance of diversity can be reinforced by both business and moral arguments. The business case highlights the value-maximizing effect of diverse boards while the moral arguments emphasize that gender diversity is the “right thing to do.” However, despite these arguments in favor of gender diversity, the efforts to improve diversity on boards have been lacking. This Note highlights the current landscape and suggests ways to break down barriers to increase women’s representation in the boardroom. A balanced boardroom with more women’s perspectives will lead to an improved understanding of a company’s stakeholders and its customers’ needs. Increased diversity can also enhance a board’s ability to meet its fiduciary duties.

 

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