Gender Parity on Boards Around the World

A new ISS report on board gender diversity is summarized on the Harvard Law School Forum on Corporate Governance and Financial Regulation:

Globally, the number of women on boards has been increasing for at least the last three years. According to ISS QualityScore data, overall female representation has increased on boards from 14.5 percent in 2014, to 15.3 percent in 2015, and 16.9 percent in 2016. While this is still a small proportion of all directorships, the 1.6 percentage point increase from last year through this year is a large jump, and also represents a significant number of global directorships now held by women.

At first glance, the greatest predictor of a more gender-diverse board seems to be the strength of any regulation mandating some minimum level of diversity. Stronger regulations with mandates for minimum gender representations are in place in many of the markets with the highest percentage of female directors, while markets with less stringent regulations or no mandates tend to have fewer female directors. However, this is somewhat of a simplistic approach; the reality is that social norms in various markets often drive the regulatory framework, and how that regulatory framework is fulfilled—and in some regions, social norms seem to have obviated the need for regulation entirely. For example, the Scandinavian countries Sweden and Finland are among the countries with the highest number of females on boards, whereas they have no targets regarding gender diversity….

Given the number of studies that strongly correlate more diverse boards with higher performance on any number of financial metrics, the pressure to continue to diversify the boardroom will likely continue to increase. And while progressive societal norms are the most effective way to build meaningful and impactful gender diversity on corporate boards, regulations also clearly have significant impact on increasing gender diversity levels in boardrooms. However, these laws generally take time to foment change, and this “brute force” method can have other potential drawbacks. In some countries where there is regulation but not societal acceptance, many companies fulfill the requirements at the absolute minimum level with little regard paid to creating any impetus for change. There is no “one size fits all” solution to increasing gender diversity; each region has different levels of societal acceptance for gender equality, and regulation would have different impacts in each region.

Source: Gender Parity on Boards Around the World

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s