GovernanceMetrics’ Women on Boards Report

The third editon of GovernanceMetrics’ Women on Boards report is released amidst the increasingly vigorous debate on gender diversity and its importance in the boardroom. Overall, the number of women on boards has increased in the last year, but only modestly. This has lead to greater momentum for interventon by governments and regulators to either impose quotas or require companies to put specific plans in place to achieve greater gender diversity on their board.

Thus far, the issue has received the most attenton in Europe, where quotas in Norway have been established since 2006, Spain has a quota requirement in progress and France has recently passed a quota law in the Natonal Assembly. Laws are also proposed in the Netherlands, Belgium and Italy. Italy is partcularly interestng, where two-thirds of the companies covered by our research have no women at all, including two companies that have 23 and 25 directors on the board respectvely. The overall average percentage of women on these boards is a paltry 3.6%. Short of legislated quotas, many governance codes across the content have been updated to place emphasis on increasing female representaton in the boardroom. Though the changes to governance codes are somewhat aspiratonal, they do reflect a broader shift in sentment. Nonetheless, the pace of change in markets without mandated gender quotas has been slow. And in those markets outside of Europe the change has been even slower. Hence, in some markets, the original hope for greater gender diversity may end up being realized in through legislated directves rather than individual acton by boards and their shareholders.

As in previous reports GMI not only covers aggregate statistcs, but also the number of companies that had at least one and at least three women on their boards at the supersector1, sector2 and country level. It has been suggested that boards with at least three women directors have a greater effect than those with less than this number, so examinaton of trends of these larger concentratons of women is of some interest.3 Also, for the first tme, GMI is looking at gender diversity of board chairs, committee chairs, and committee membership. Since the financial crisis, a fair bit of critcism has been levied at key board committees – specifically their failure to adequately oversee accountng and remuneraton structures with a view towards enterprise level risk. Given that much boardroom acton takes place at the committee level, exploraton of both the leadership and compositon of these bodies in the context of gender diversity and risk
holds importance as well.

Global Trends

In March 2009, we first started collectng data on the number of women on the boards of all the companies we analyze globally. Of the roughly 4200 companies covered by GMI from 2009 to 2011, the global aggregate percentage4 of board seats held by women has shown a steady but modest increase from 9.2% to 9.8%. However, there has been little change in board leadership. Only a very low one in fifty companies covered had a female chair in 2011; the same low proporton as in 2009. However, leadership of key committees (audit, remuneraton and governance) has followed the slight upward tck of the aggregate figures. In 2011, 6.9% of Audit Committees, 6.4% of governance/nominatng committees and 7.0% of remuneraton committees had a female chair. This is up respectvely from 5.9%, 5.8% and 5.7% in 2009.

Download the full report – click at lower right

The Board Director Training Institute (BDTI) is a "public interest" nonprofit in Japan dedicated to training about directorship, corporate governance, and related management techniques. It is certified by the Japanese government to conduct these activities as a regulated nonprofit. Read a summary about BDTI here, and see a menu of its services for both corporations and investors here.

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