Gender diversity progress in corporate boardrooms over the past two years is positive overall, but their composition still doesn’t reflect the versatility of thought, gender, age, nationality or perspective of the global stakeholders that businesses serve, reports Egon Zehnder.
The firm, a global leadership advisory specialist for more than 50 years, has released its 2016 Global Board Diversity Analysis. The bi-annual study, issued since 2004, examines board data for 1,491 of the world’s largest companies across 44 countries globally with market capitalisation exceeding €6bn.
“A modern organisation is only as successful as its leadership’s ability to navigate a near-constant state of change, and the momentum for achieving gender parity is simply not occurring at the pace of progress required,” said Rajeev Vasudeva, chief executive officer (CEO), Egon Zehnder.
“[The study] reinforces that we must continue to accelerate efforts to broaden opportunities at the highest levels of leadership for women, requiring we rethink what great leadership entails. Leaders today must pave the way for diversity to become the next disruptive force in business, embracing diversity as a fundamental and reimagining it for the long-term benefit of organisations.”
The message from the 2016 analysis is that gender parity in the boardroom continues an upward trajectory globally, with slow but positive progress. The report explores why some countries are able to transform their boards to better represent the society around them, and reveals continuing challenges in gaining parity in the boardroom.
Key findings include:
- Nearly 19% of seats on the boards of the largest companies globally were held by women, up from about 14% in 2012.
- The global total of companies with at least one woman on the board reached 84% in 2016, up from 76% in 2012.
- In 2016, the average board size globally was 11.5, with an average of 2.1 female members.
- If progress continues at the same global rate as the last two years, 1.6% per annum, the average number of women per board will reach the critical mass of three, which is the number of women per board needed for transformative and sustainable change, by 2021, while gender parity remains 20 years away.
Pipeline progress for increasing female presence in the boardroom is weak, however:
- The overall global ratio of male to female directors for new appointments remained on average at three males to one female for board appointments.
- Specific country performance varies: For example, inRussia the rate is nearly 8 to one, and in China it is 18 to one.
Of the 44 countries studied, 16 “diversity champion countries” worldwide have achieved the critical mass of three female board directors on average: Italy, France, Belgium, Sweden, Germany, Austria, Spain, the UK, Netherlands, Republic of Ireland, Canada, Denmark, Poland, Finland, Norway, and South Africa. Nine of the top 10 countries in terms of board diversity progress over the period 2012 to 2016 were in Western Europe.
However, the US is relatively stagnant, with just 1% growth in board diversity from 19% in 2012 to 20% in 2016. The country has also fallen short of the three-female member tipping point with 2.1 women per board.
Eleven of the 44 countries studied are slow to progress on board diversity, where at least half of the boards are without a single female representative: Czech Republic, Argentina, Taiwan, Saudi Arabia, Brazil, Russia, Colombia, Hungary, Japan, South Korea, and United Arab Emirates (UAE).
The study also found that men held 95% of board chair roles in 2016, down slightly from 96% in 2014.
The major oil producers have agreed a further reining-in of production in a bid to push the price higher.
The General Data Protection Regulation (GDPR) will be enacted on May 25 2018 and promises to revolutionise the way that firms collect, store, process and protect the personal information of customers, clients and employees.
Today sees the publication of set of global principles of good practice in the foreign exchange market.
The one-notch downgrade by the credit ratings agency is the first for nearly 30 years.