BOSTON— Senator Sal DiDomenico and his colleagues in the Legislature unanimously adopted a resolution to encourage equitable and diverse gender representation on boards of companies in the Commonwealth. The Senate passed the resolution in July, followed by the House of Representatives in October. Senator DiDomenico was a co-sponsor of this resolution.
“This resolution will help to ensure that women continue to play a key role in driving the health of the Commonwealth’s business climate and the success of our economy”, said Senator DiDomenico, Vice Chair of the Committee on Ways and Means. “By actively promoting diversity and gender equity in Massachusetts’s businesses, we are also committing to the long term success of our companies. While this resolution makes a declaration of Massachusetts’s commitment to fairness and equality, it will also help to ensure that we continue to remain an attractive place to conduct business.”
“This is not just a women’s issue or a family issue. This is also a business issue,” said Senator Karen Spilka, Chair of the Senate Committee on Ways and Means and the lead Senate sponsor of the resolution. “Research consistently shows that businesses with greater gender diversity in their leadership ranks have a competitive advantage. The future of the Massachusetts economy depends on bringing the best talent to the table. With this resolution, we are making a strong statement of public policy that Massachusetts values equality, justice and diversity.”
“This resolution encourages the Massachusetts businesses to become national leaders in expanding the number of women as board members,” said Senate President Stan Rosenberg. “Diversity in leadership allows for a variety of perspectives when making important decisions on the direction of companies and nonprofits.”
The Women on Boards resolution had support from 62 co-sponsors in the Legislature, the Alliance for Business Leadership, 2020 Women on Boards, local advocates and business leaders. The legislation encourages privately held and publicly traded companies in Massachusetts to:
- Adopt policies and practices designed to increase the gender diversity in their boards of directors and senior management groups and set goals by which to measure their progress;
- Publicly disclose the number of women and total number of individuals on their boards of directors; and
- Have a minimum of three women directors on boards of nine or more and a minimum of two women directors on boards with fewer than nine directors by December 31, 2018 AND measure their progress toward a goal of equal representation of men and women in leadership positions on an annual basis.
The Boston Club’s 2014 Census of Women Directors and Executive Officers of Massachusetts Public Companies reports that women hold 14.9% of the board seats and 11.8% of executive officer positions in the 100 largest public companies in Massachusetts. Twenty-four of these companies have no women on their boards of directors, 46 have no women executive officers and 19 have no women on their boards of directors or in their executive suites.
A 2014 Credit Suisse report that analyzed over 3,000 companies across the world found that greater gender diversity on boards of directors and in management “are empirically associated with higher returns on equity, higher price/book valuations and superior stock price performance.” In addition, the authors “find no evidence that female led companies reflect greater financial conservatism where leverage is concerned [and] dividend payout ratios have been shown to be higher.” Additional reports reinforce the correlation between greater gender diversity in top management and enhanced corporate performance.