GMI Memo: Female Directors in the FTSE MIB

The following entry/metrics appeared as part of Governance Metrics International’s GMI Blog. GMI is the leading independent provider of global corporate governance and ESG ratings and research. Corporate stakeholders – including leading investors, insurers, auditors, regulators and others – use GovernanceMetrics services to identify and monitor risks related to non-financial measures covering key environmental, social, governance and accounting risk factors.

Executive Summary
In 2011, Italy passed legislation requiring its public companies’ boards to be one-third female by 2015. A review of the boards of the forty companies in the FTSE Milano Italia Borsa (MIB) as of mid-February 2013 shows that these firms will have to make major changes in the next two years
to comply with the mandate. Women currently hold just over one-tenth of the directorships at companies in the index, and only seven of the firms have boards that are at least 20% female, with none having attained the 33% target yet. Moreover, while Italy’s female directors are highly
accomplished, a significant minority of them are also very busy and/or members of families with many social and professional connections in the world of Italian business. Both of these factors could compromise some of these directors’ abilities to provide rigorous and independent oversight
of management at MIB companies.

Most Italian companies, therefore, will need to quickly intensify their recruitment of female directors to reach the mandated level by 2015. As they do so, they would be well-advised to recruit from a pool of women that includes candidates with executive experience below the C-suite, as well as those who have served in non-profit or public sector roles, and who offer diversity of nationality as well as gender. They should also pay attention to directors’ existing commitment levels, and ensure that nominees have adequate time to devote to service on their boards.

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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