Progress in female representation globally but pace of change in US remains slow
GovernanceMetrics International (GMI) has released its annual 2012 Women on Boards report, which shows progress toward boardroom diversity across the globe.
The study coincided with International Women’s Day, an event set up by the United Nations to raise social awareness of the many struggles women face worldwide.
The survey takes an in-depth look at women’s participation in international boardrooms by compiling records from 4,300 firms in 45 different countries.
Today, about 60 percent of companies have at least one female director and 9.8 percent have three or more women who quickly rose to the top echelons in companies.
Slow pace of change in US
In the US, however, the percentage of women on boards grows at a glacial pace. The report says the presence of women on boards increased by only 0.5 percent in 2009-2011 and has reached 12.6 percent this year, well below the figures for the Nordic countries, Canada, Australia and France.
More than 70 percent of US boards have at least one female director and roughly 10 percent have three or more women. The lowest figure can be seen in the 2 percent of female board chairs.
This year France took the winner’s title for most women on boards, while Australia took second place. Why? The answer is simple: legislation.
According to the report, when France’s National Assembly passed a law in 2010 requiring French boards to have 20 percent female composition within three years and 40 percent within six, the number of women instantly accelerated. Now the percentage of female representation in France has reached an all-time high of 16.6 percent.
Australia, meanwhile, has seen a 3.5 percentage point jump in the number of women directors in the last year, taking it to 13.8 percent, with 68.5 percent of the country’s companies having at least one female director in place.
Australia may be handling this matter slightly differently, as the country has not implemented any legislation calling for mandatory quotas.
Different approaches
‘This heterogeneity reflects the wide range of approaches countries are taking with respect to board diversity,’ says Kimberly Gladman, GMI director of research and an author of the report, in a prepared statement.
‘In the past year, France has seen the largest increase in female directors, due to a legal requirement. Australia has also made significant gains, in response to a corporate governance code change and a mentoring program by the Australian Institute of Company Directors.’
It is still hotly debated whether mandatory quotas are the right solution for boardroom diversity. In December, the Institute of Corporate Directors (ICD) published a report titled ‘Diversity in the boardroom: findings and recommendations of the ICD’, which revealed that a majority of survey participants are strongly against government-imposed quotas or legislated mandates.
Just 4 percent of respondents were in favor of such measures, says the association, which represents corporate directors across Canada. Of those surveyed, 90 percent agree that board diversity is a hot governance issue and 80 percent believe a diversified boardroom results in more informed decision making.
Canada has successfully promoted boardroom diversity, reaching 19.4 percent female representation. These moves have prompted the US to take heed of what other countries are doing. For example, the largest pension funds, CalPERS and CalSTRS, together with GMI Ratings, have created the Diverse Director DataSource (3D), a resource where directors can nominate themselves for inclusion in the system by providing extensive detail on their qualifications and interests.
This article originally appeared on the website of Corporate Secretary, the sister publication of IR magazine.
