Cracking the glass ceiling: Women finally represent 10% of corporate boards

Cracking the glass ceiling: Women finally represent 10% of corporate boards

Woman in corporate boardroom

Thursday marked International Women's Day, which means, among many other things, that GovernanceMetrics International (GMI) has published its annual Women on Boards report. The survey, which includes data on more than 4,300 companies in 45 countries, concludes that there has been "incremental improvement in most measures of female board representation" since GMI's 2011 report.

This year's report marks some milestones for the representation of women on corporate boards, which, according to a 2010 report from GMI, "increases the conscientiousness of board oversight, and leads to more accurate value assessments." For the first time, "women hold more than one in ten board seats globally: 10.5% of the directors in our coverage universe are now women, a 0.7 percentage point increase from last year," according to this year's report. 

Also, almost 10 percent of companies now have at least three women on their boards, "a level that some research suggests may constitute a critical mass and allow women's leadership styles to come to the fore," the survey reports. 

On the other hand, marked disparities among countries persist. Industrialized nations have significantly higher percentages of women on corporate boards than do emerging nations. And even among industrialized nations, statistics vary widely: while more than 36 percent of Norway's directors are women, only 4.5 percent of Italy's corporate directors are women. In Japan, the number barely tops 1 percent. 

The report suggests that national regulatory efforts can be effective in increasing the representation of women on boards. The two countries with the greatest increase over last year are France and Australia. In France, a 2010 law was passed "requiring French boards to be 20 percent female within three years and 40 percent female within six years." In Australia, companies listed on the Australian Securities Exchange are required to report on the establishment of "measurable objectives for achieving gender diversity and for the board to assess annually both the objectives and progress in achieving them." 

"The percentage of women on U.S. boards has increased only marginally," to 12.6 percent, the report found. "While over 70 percent of U.S. boards have at least one female director, only about 10 percent have three or more women, and a mere 2 percent of board chairs are women." 

The report does note efforts in the U.S. to increase gender diversity on corporate boards. The 30% Coalition launched last month, with the goal of securing "a minimum of 30 percent multicultural women on every U.S.-based publically listed company board of directors by the end of 2015." 

Included among the Coalition's founding members is Joseph Keefe of PAX World Funds, whose Global Women's Equality Fund invests primarily in large-cap companies that promote gender equality and women's advancement. 

Shareowner action is another method used by sustainable investors and corporate governance advocates to pressure companies to improve the gender diversity of their boards. For the 2012 proxy season, members of the Interfaith Center on Corporate Responsibility filed resolutions with five companies, requesting that they report to shareowners on their efforts to encourage diversified board representation. And in its Proxy Preview, As You Sow identifies six resolutions that focus on board diversity, all filed by Calvert Investments.

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