On the latest episode of the WI Law in Action podcast from the UW Law Library, Assistant Professor Yaron Nili discusses his recently published article, Board Diversity by Term Limits?, coauthored with Darren Rosenblum.
The article explores the connection between term limits and gender diversity on corporate boards.
One of the key problems when you talk to people in the field is about why don’t we see enough women [on corporate boards]. One of the things that hindering that progress is the fact that not enough directors leave their positions…. If directors don’t leave, then not enough boardroom positions open and obviously even if you want to promote more women, it’s going to be hard if there’s a bottleneck of entry into the boardroom environment. That kind of sparked the idea of looking at the connection between refreshing the board, through term limit devices and whether that would lead to a better and more diverse boardroom, both for gender, but also for other attributes as well.
According to Nili, the key is to
… find this happy medium where the company doesn’t have to let go people they view as their best directors ever, but they do have to let go some directors and allow for refreshments… [For that to happen,] you need two ingredients: On the one hand you need to have enough open spots to allow for women to get the positions, but you also need to have this public atmosphere and demand to have companies that would have not considered women, to consider women and appoint them to the boardroom.