Women are rising to the highest levels of government in many countries, advancing to executive ranks at top corporations, and earning more undergraduate and advanced degrees than men. Women’s employment rates held up better than men’s in the years following the recession, and in 2014, a record number of women were on the FORBES list of World Billionaires. Despite these successes, however, there is still a dearth of female directors on the boards of public companies around the world.
A few countries, Sweden, Italy and Norway among them, are blazing trails for board gender diversity, but most have a long way to go. In fact, at the current rate, it would take more than 70 years to achieve gender-balanced boardrooms in the United States and the United Kingdom.
Given the relatively low number of female board members, it is unsurprising that gender diversity has become a focus of investors in recent years. In the wake of the 2008 financial crisis, many investors expect boards to lead companies in new directions, to introduce fresh perspectives and focus more on risk mitigation. Investors are aware of the risks presented by “group think” among board members and are pressing companies to ensure that boards provide more effective oversight by asking challenging questions. It is believed that new and different ideas will more likely come from boards that are diverse in race, gender, background and experience and that have appropriate levels of independence.
In Mind the Gap: Board Gender Diversity in 2014, Glass Lewis looks at the current state of gender diversity in the boardroom in 14 markets. We reviewed the constituents of the following stock indices: S&P 500, S&P/TSX 60, FTSE 100, OMX 30, IBrX 50, MIB 30, CAC 40, DAX 30, OBX 25, AEX 25, ASX 200, KOSPI 200, India Over USD 5 Billion and Nikkei 225. The data is derived from companies that held director elections at annual meetings between November 1, 2013 and November 1, 2014. This report examines not only the proportion of women on boards, but also director independence, tenure and other aspects of female representation in leadership positions. Many of the countries included have adopted voluntary or mandatory gender diversity quotas, which are also discussed throughout this review.
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