In our initial analysis in March 2017, we found that 23% of companies within the Russell 3000 had zero female board members and 58% had boards composed of less than 15% female members. At that time, there were just five companies with female-majority boards: Tootsie Roll, American Water Works Company, Connecticut Water Service, Hologic, and Navient. The good news is that the percentage of companies with zero female board members has fallen to 18% and now 47% have boards comprised of less than 15% female members. Today, 14 companies have female-majority boards, and an additional 22 companies have 50/50 male/female representation. We also looked at gender diversity at the CEO level. We found that 151 companies in the Russell 3000 have a female CEO, just 5.1%. This is up from 143 in March 2017.
Russell 3000: Breakdown of Female CEO Representation by Sector
No. of companies
Materials & Processing
Notes: Where CEO or top leadership function is shared by male leaders, company is counted once.
Where CEO or top leadership function is shared by male and female leaders, company is counted once in each category.
Data as of September 19, 2018
One of the most interesting things to come out of our analysis was the strong correlation between having a female CEO and having high female representation on the board of directors. Of the 521 companies in the Russell 3000 that have zero female board members, only four have female CEOs, and one of those four, IES Holdings, Inc., has a male co-CEO as well. That means that .6% of companies without female board members have female CEOs, compared to 6% of companies with at least one female board member. The percent of companies with female CEOs increases to 9% when 20% or more of board members are female and to a third when 40% or more are female. We found that this correlation held true across all sectors of the Russell 3000.
Russell 3000: Breakdown of Female Board of Directors Representation by Sector
No. of companies
No. with 0 Women
Avg. % Male
Avg. % Female
Materials & Processing
Data as of September 19, 2018
The Best Sectors for Female Leaders: Utilities and Consumer Discretionary
Of the Russell 3000’s nine sectors, Utilities has the best record for female leadership, with women representing 11.1% of CEOs and averaging 22.0% female board representation. We see a strong correlation between female CEOs and board representation. Of the 11 companies with a female CEO/leader, three of them have 50% or greater female representation on the board, or 27%. This compares with just 1% for companies with male leadership. Note that the Utilities sector of the Russell 3000 includes just 99 companies, so it’s difficult to draw meaningful conclusions. At the same time, it is no surprise that the most heavily regulated sector is also the most gender diverse sector. In fact, the subsectors with the highest percentage of female CEOs and board members, Water and Electrical, are those most dominated by government regulation. Our findings are consistent with data in a recent Washington Post article which explores several theories on why the Utilities section is the most gender diverse sector in the S&P 1500.
The third biggest sector in the Russell 3000 is Consumer Discretionary (420 companies), which has strong female representation in leadership positions. In this sector, 8.8% of CEO positions and 21.4% of board positions are held by women. Again, we see a strong correlation between female CEOs and board representation. Of the 37 companies with a female CEO/leader, ten of them have 50% or greater female representation on the board, or 27%. This compares with 1.8% for companies with a male leader. Diving into Russell industries, Cosmetics has the most female representation (on average, 32.4% of board members are female), which is fitting given its almost exclusively female clientele. Automobiles ranks fourth out of the 32 industries comprising Consumer Discretionary, with women holding approximately one-third of CEO positions and board seats. Like the Utilities sector, automobile companies must generate risk-mitigated profits by including safety features that increase production costs and manufacturing cars that protect the environment. This could be a factor in the higher female representation in leadership positions in this sector.
Sectors with Fewer Women in Leadership Roles
Among the poor performing sectors of the Russell 3000, Technology ranks at the bottom in terms of female CEOs, with 2.4% of the companies having female leadership. This sector also ranks near the bottom when it comes to female representation on boards of directors, with an average representation of 16.1%. However, there are some bright spots in this sector. Of all Russell 3000 companies, technology company Travelzoo (TZOO) has the highest female representation on its board (80%).
Another interesting company example in this industry is Hewlett Packard Enterprise Co. (HPE). Looking at the history of leadership at HP and HPE (which split off from HP in 2014), this company has a history of putting women in the CEO and board positions. When Carly Fiorina was named CEO of HP in 1999, she was the first female CEO of a Fortune-20 company in the Dow Jones Industrial Average. After Fiorina, Cathie Lesjak and Meg Whitman followed as CEOs (Lesjak as interim CEO in 2010, serving in the role for just two months). Whitman went from the HP board of directors to the CEO role, and after the company split in two, she served as CEO of HPE until February 2018. HPE currently has 41.7% female BOD representation, well above the average for this sector, further emphasizing the connection between females in the CEO position and board representation.
Energy is noticeably lacking females in leadership positions, with 54 of the 175 Russell 3000 constituents completely without female board members. With 30.9% of companies having zero female board representation, this sector is by far the worst performer of the nine Russell 3000 sectors. Of those 54 companies with all-male boards, zero have female CEOs. Noble Corporation is the only company in the Energy sector of our universe where females represent more than 38% of board members, achieving gender parity at the highest level of leadership (50% of the board is female, as is the CEO).
Financial Services is the third worst sector in terms of women in the CEO position, with just 3.3% of companies having women at the helm. However, with an average of 16.9% female board of directors representation, the sector falls right in the middle of all nine sectors. Twenty-six of the 782 Russell 3000 constituents that are classified in Financial Services have female CEOs; 330 have boards where women comprise at least 20% of the board, and 21 of those have female CEOs. Therefore, the percentage of females at the highest level of a company doubles when boards are more gender diverse in this subset. OP Bancorp and Progressive Corporation have the highest female representation in this sector. Both companies have female CEOs and their boards are 50% and 45.5% female, respectively.
Could Increased Regulation Spur Further Gender Equity?
In light of recent events surrounding Facebook and user data privacy, the federal government and news media have speculated about increased regulation for the Technology sector. Some of technology’s biggest players, including Facebook, Apple, and Twitter, have been at the center of these discussions According to Bank of America Merrill Lynch, technology is the least regulated sector with a mere 27,000 regulations, as compared to 215,000 for manufacturing and 128,000 for the financial sector. Increased regulation adds new expenses for companies that are still expected to generate profits and that face penalties for non-compliance. As a result, sectors and subsectors burdened with government regulation tend to be more gender diverse. Increased regulation could be a driving force in changing the Technology sector’s gender landscape, although the current federal push for fewer industrial regulations could reverse progress in other sectors.
Note: This analysis was based on the constituents of the Russell 3000 as of September 19, 2018, which counted 2950 companies.
Sara B. Potter, CFA, Vice President, Associate Director, Thought Leadership & Insight also contributed to this article.