Executive Alliance successfully mobilized an effort to support legislation to encourage more gender diversity on Boards of Maryland companies while also increasing transparency, and urgency.
During the 2019 Maryland General Assembly lawmakers passed House Bill 1116 Gender Diversity in the Boardroom. The legislation was sponsored by Del. Shelly Hettleman, D-Baltimore County, who worked tirelessly with other women legislators and a number of male legislators who co-sponsored the bill. The new law went into effect on October 1 and requires Maryland businesses, and certain nonprofits, to report the number of women on their boards as part of the Annual Report of Personal Property Tax Form-1 which companies and nonprofits must file annually by April 15 to Maryland’s Department of Assessments and Taxation (SDAT). This information will be collected by SDAT and shared with the Comptroller of Maryland who will submit a report to the General Assembly on or before Jan. 1 of each year.
According to research done by Executive Alliance in its annual “Census Report of Women on Boards in Maryland,” Maryland lags significantly behind the national average of 22.5 % of board seats held by women in publicly traded companies. In 2014, 14.4% board seats among publicly traded companies in Maryland were held by women, and in 2018, women occupied 16.8% of board seats, a mere 2.4% increase over four years. This sluggish rate of growth for Maryland mirrors marginal gains nationally. The number of total board seats for Fortune 500 companies increased on average of 22 board seats per year from 831 seats to 1,051 from 2007-2017. At this rate it would take another 40 to 50 years before gender parity in the boardroom is achieved.
This comes at a time when women make up 51% of the population, 57% of college graduates, 50% of the workforce, but hold only 14.6% of executive positions and 16.9% of board seats in Fortune 500 companies according to Catalyst Census reports of Women Board Directors.
Studies and research have shown that companies with increased women on boards have better outcomes, achieve greater net income growth and generally carry less debt. These findings suggest that greater gender diversity on boards of companies and nonprofit institutions in Maryland will improve the state’s overall economic competitiveness.
Converting the New Law into Action
With the passage of HB1116/SB911 Maryland becomes the second state in the nation, behind California, to establish a law aimed at increasing the number of women on boards. A handful of states have passed similar resolutions which may soon clear the way for legal statues across the country. While passing a law is a powerful first step in moving the numbers for more women joining boards of influence in Maryland, there is more that needs to happen to raise awareness and prompt action.
Executive Alliance will launch an outreach effort to inform Maryland companies and large institutional nonprofit organizations about the new law, its intent and reporting requirements that go into effect in 2020. Executive Alliance also hopes to offer its services as a resource for companies and organizations that are committed to diversifying their boards by increasing female representation.
“We welcome working with businesses and organizations to create more board leadership opportunities for women which ultimately benefits everyone,” Executive Alliance’s President Lisa Hayes said. “We want to see Maryland companies achieve a minimum of 30% women on boards by 2023, and we stand ready to partner with organizations who are serious about taking the necessary action to ultimately reach parity for women.”
To inquire about how Executive Alliance can assist your organization with compliance to the state’s new Gender Diversity in the Boardroom law and women on board initiatives, contact Luwanda Jenkins at Executive Alliance at [email protected]
|This article is featured in The Daily Record and Executive Alliance's Women's Leadership Resource Guide 2019-2020.
Full coverage: Progress slow for women on boards but there are standout companies | Women on boards: Creating the pathway and pipeline | New ‘gender diversity in the boardroom’ law places Maryland companies on notice