On June 28, 2019, Commissioner Peirce of the Securities and Exchange Commission (“SEC”) delivered a speech entitled “Baby on Board” at the Society for Corporate Governance National Conference. In her speech, Commissioner Peirce reflected on the “Lady on Board” trend. Peirce noted there is mixed evidence as to whether the inclusion of women on boards has an effect on a company’s performance. Norway was the first country to mandate a quota of gender representation for public companies’ boards. However, Peirce noted that a study shows the quota has had a deleterious effect on the quality of public boards. She also expressed concerns over some U.S. states’ efforts to mandate female representation on board of directors. Such efforts, she noted, illustrate an inappropriate micromanagement of corporate governance. She asserted that complying with this mandate will add costs for public companies and their shareholders. Commissioner Peirce also raised concerns that the “Lady on Board” movement may undermine the respect accorded to women on boards.
At the end of her speech, Commissioner Peirce expressed her optimism. She pointed out that recent statistics have shown an increase of diversity in company boards, including female and younger board members. The full text of the Commissioner’s remarks is available here.