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Power companies pull from oil, gas, other sectors to bolster board diversity

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Power companies pull from oil, gas, other sectors to bolster board diversity

Women from fossil fuel, financial, technology and other sectors have joined the boards of some of the biggest U.S. power companies over the past year, according to corporate reports.

Of the 25 biggest U.S. power companies by market capitalization, 17 nominated new women to their boards in the 2019 proxy season, according to an S&P Global Market Intelligence analysis of companies' reports for their annual shareholder meetings.

The nonprofit called 2020 Women on Board found that the electric utility sector has been among the most diverse industries at the leadership level in recent years even as some other sectors have begun to catch up. Of Russell 3000 companies, the utility sector in 2017 was the only one that had 20% or more female directors. In 2018, other sectors reached similar diversity levels including the services, conglomerates, and consumer goods sectors, the group reported.

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Companies are under increasing pressure to adopt a variety of gender diversity-related practices. A number of major asset management funds and influential proxy advisory firms have pressed companies listed on either the Russell 3000 or S&P 1500 indexes to include women on their boards, noting that studies have found board gender diversity to be associated with better company performance.

Richard McMahon of the utility trade association Edison Electric Institute said power companies have faced more investor pressure to act on environmental issues than to have more diversity. He attributed the industry's diversity figures to a reflection of the communities in which utilities serve, a relatively large number of female CEOs, and international investors in utilities with strong views on the need for diversity.

The uptick in women at power companies also offers insight into what areas of expertise companies are looking to bolster on their boards. Notably, four new female directors have connections to the oil and gas industry.

DTE Energy Co.'s board added Valerie Williams, a former managing partner of the Southwest Region for Ernst & Young who is also on the board of oil and gas exploration and production company WPX Energy Inc.

New to Entergy Corp.'s board is Elise Hyland, formerly of EQT Corp. who is on the board of Marathon Oil Corp.

Joining Public Service Enterprise Group Inc.'s board is Laura Sugg, a former president of the Australasia Division of ConocoPhillips and who also sits on the boards of Murphy Oil Corp.and Denbury Resources Inc.

At Sempra Energy, Cynthia Walker joined the board. She is senior vice president of marketing and midstream operations and development at Occidental Petroleum Corp.

McMahon said power companies adding women with oil and gas experience is "a natural outgrowth of the rising importance of gas to our business" and the convergence of the electric and gas sectors.

"If you look at the evolution of our fleet, there's been a tremendous amount of coal-to-gas switching," McMahon said in an interview. "Right now, gas is the prominent fuel in our fleets along with a lot of the investment we're making in wind and solar and other renewables." Moreover, most gas local distribution companies are subsidiaries of the Edison Electric Institute's member utility holding companies, and the industry is investing in midstream pipelines as well, he said.

Just because a company added a woman to the board does not automatically mean the total count of female directors increased. Ameren Corp., for instance, filled the seat of a retiring female director with Noelle Eder of Hilton Worldwide Holdings Inc. That said, some companies, such as American Electric Power Co. Inc. and Xcel Energy Inc., expanded their total number of board seats and filled them with women, while new female directors in many other instances filled positions previously held by men.

Several new female directors came from companies that supply technologies and other materials to the energy industry or from the internet services industry.

Duke Energy Corp. added two women to its board — Schneider Electric SE President and CEO of North American Operations Annette Clayton and Marya Rose, who is vice president and chief administrative officer of Cummins Inc., a global manufacturer of engines, filtration and power generation equipment.

New to AES Corp. is Janet Davidson, who is on the supervisory board of STMicroelectronics NV, a semiconductor company. Alliant Energy Corp.'s board now includes Jillian Evanko, who is CEO and president of Chart Industries Inc., a gas-to-liquid cycle equipment and services company.

Janaki Akella, digital transformation leader at Google LLC, joined the board of Southern Co. Edison International's new director, Jeanne Beliveau-Dunn, works at a digital company and sits on the board of water solutions provider Xylem Inc.

At least two power companies, Centerpoint Energy and CMS Energy Corp., added women who have experience in the financial sector.