Europe leads the way in the number of women on top company boards 5 June 2014

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June 5, 2014

Europe leads the way in the number of women on top company boards

By Hugh Carnegy in Paris

Europe is fast overtaking the US in the number of women board directors at top global companies, driven by legal quotas and corporate governance requirements, according to a new survey.

The research also shows companies in the Asia-Pacific region lagging far behind their European and American counterparts, even as they account for a growing number of top companies.
“Quotas are working,” said Irene Natividad, head of Corporate Women Directors International, a Washington-based group that has run a survey of female board representation for 10 years. “What is not working is doing nothing. Thinking that women will move up by osmosis is a mistake.”
However, the overall pace of change remains slow. CWDI’s annual study, to be published on Friday, shows the percentage of women board directors among Fortune Global 200 companies edging up to just 17.3 per cent, from 10.4 per cent in 2004.
“The 10 year change in percentage of women board directors averages less than 1 per cent per year – a glacial rate,” CWDI commented.
The survey, coinciding with a CWDI conference in Paris, shows that 16 of the 25 Global 200 companies with the highest percentages of women board members are now European, topped by Norway’s Statoil, with 50 per cent.
A total of seven are French, with three from Italy, both countries that have, like the pioneer Norway, implemented legal quotas. The US share was down to eight companies, compared with 20 out of the 27 best performers a decade ago. The top-ranked US company was Procter & Gamble, with 45.5 per cent women directors. The only Asia-Pacific company in the top 25 was from Australia.
The proportion of women on the boards of all French Global 200 companies has shot up to 29.7 per cent since legislation setting a target of 30-40 per cent was enacted in 2010. A decade ago the figure was 7.2 per cent. Likewise in Italy, which passed a quota law in 2011, the proportion has jumped to 25.8 per cent from 1.8 per cent in 2004.
Europe as a whole now matches the US on 22.5 per cent, with Asia-Pacific on 6.5 per cent. In 10 years, the US moved up by five percentage points, compared with a 13.4 point rise in Europe.
CWDI said legal quotas had now been adopted in some form by 22 countries, including Spain, the Netherlands and Belgium. Malaysia will implement a quota system in 2016, with India and the United Arab Emirates also introducing limited quotas.
Ms Natividad said apart from quotas, the inclusion of gender diversity provisions in corporate governance codes had also proved effective in getting more women on boards. CWDI said 24 countries has adopted such measures.
It said the US, China and Japan had the lowest percentage increases in female board representation. “None of these countries have concerted proactive national strategies to improve the number of women directors in their respective countries,” it noted.
Ms Natividad acknowledged that there was still a big issue in increasing the number of women in senior executive roles in top companies, which the CWDI survey did not cover.
But she said: “The bottom-up strategy didn’t work. Putting women on boards is a top-down strategy. The hope is that it will filter down to the executive level because boards make policy. I hope this is what will happen.”
Copyright The Financial Times Limited 2014.