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Women on Boards Survey Finds Legislation Major Driver of Change

From GMI Ratings

Based on data for almost 6,000 companies in 45 countries, and including historical data, the survey provides a broad and detailed assessment of global progress on gender diversity among corporate directors. The survey finds extremely slow progress in most of the world outside Europe, which has led on this issue through the adoption of legal mandates for the representation of women on corporate board. The findings will be of particular interest to investors and others seeking to increase board diversity through non-legislative means in North America and elsewhere.

Key Findings

  1. Women now hold 11% of board seats at the world’s largest and best-known companies. This marks an increase of one-half of a percentage point since December 2011 and only 1.7 percentage points since 2009.
  2. Europe accounts for most of the modest improvements in the representation of women on corporate boards. Excluding Europe, female representation on boards has risen only eight-tenths of one percentage point since 2009. Indeed, more than half of the new female directors since 2009 have joined European boards.
  3. Norway, Sweden and Finland continue to lead the developed world in their percentage of female directors, with 36.1%, 27.0%, and 26.8%, respectively.
  4. Italy and France are seeing significant increases in women’s representation following the passage of recent laws on board diversity. France now ranks fourth in the world for female directors, with 18.3%, and more than half of French boards have at least three women.
  5. The percentage of women on UK boards has risen 4% since 2009, possibly in reaction to the threat of EU-level regulation on the issue, and now stands at 12.6% of directors.
  6. US boards, meanwhile, have seen little progress on gender diversity for more than a decade. The proportion of female directors is highest among S&P 500 companies, at 16.9%; it is lower at S&P Midcaps (13.5%) and S&P Smallcaps (11.3%). In all three of these indices, moreover, the level of female representation has risen by fewer than 5 percentage points since 2001.
  7. Canada’s progress on gender diversity among directors is stagnant: the proportion of female directors is at 13.1%, unchanged from a year ago and up less than 1 percentage point since 2009.
  8. Representation of women on boards remains poorest in Japan, where 1.1% of directors are female.
  9. Women continue to make up a higher percentage of directors in developed markets (11.8%, up from 11.2% last year) than they do in emerging markets (7.4%, both this year and last).
  10. India has seen an increase of 1.3 percentage points in the level of female directors since 2011, a faster rate of change than in many other countries. The proportion of women on its boards is now 6.5%.

The survey was authored by Kimberly Gladman, Ph.D., CFA, Managing Director, ESG Research, and Michelle Lamb, Senior Research Associate. They are available to discuss their findings with journalists.

About GMI Ratings

GMI Ratings is an independent provider of research and ratings on environmental, social, governance and accounting-related risks affecting the performance of public companies. The firm’s ESG ratings for more than 6,000 companies worldwide incorporate 150 ESG KeyMetrics® to help investors assess the sustainable investment value of corporations. The firm also provides Accounting and Governance Ratings (AGR®) for approximately 18,000 public companies worldwide. AGR metrics reflect the accuracy and reliability of a company’s financial reporting. Clients of GMI Ratings include leading institutional investors, banks, insurers, auditors, regulators and corporations seeking to incorporate accounting and ESG factors into risk assessment and decision-making. A signatory to the Principles for Responsible Investment (PRI), GMI Ratings was formed in 2010 through the merger of GovernanceMetrics International, The Corporate Library and Audit Integrity. In the 2012 Independent Research in Responsible Investment (IRRI) Survey conducted by Thomson Reuters Extel and SRI-CONNECT.com, GMI Ratings was named “The Best Independent Corporate Governance Research Provider”. For more information please visit the GMI Ratings website.