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Five of Macy\u2019s 10 directors are women, making it one of a handful of major U.S. companies to have achieved gender parity in the boardroom. A Macy’s store in San Francisco. Photo: Justin Sullivan\/Getty Images<\/p>\n
By\u00a0Vanessa Fuhrmans\u00a0<\/strong><\/p>\n Updated April 25, 2018 6:28 a.m. ET\u00a0<\/em><\/p>\n The pressure is on for companies around the world to put more women on their boards.<\/p>\n Diversity advocates have been making a business case for women in high-ranking roles for years. Now blunt-force measures, rather than financial arguments, appear to be moving the needle.<\/p>\n The U.S., once the leader in female directors, is lagging Europe where mandates have forced corporations to boost the ratio of women holding board seats.<\/p>\n In Italy, Germany and several other European nations, the number of women on big company boards has tripled and, in some cases, quadrupled in recent years, according to a new report by the Corporate Women Directors International, a research and advocacy group.<\/p>\n France passed a law in 2011 requiring that blue-chip firms fill at least 40% of board seats with women and gave them six years to meet the requirement. In that time, the share of directors at<\/p>\n the country\u2019s biggest companies more than doubled to 43% of board representation, CWDI data show.<\/p>\n Sophie Bellon, chairwoman of Sodexo SA\u2014a French food and facilities services firm founded by her father, Pierre Bellon \u2014also joined the board of cosmetics giant L\u2019Or\u00e9al<\/a> SA in 2015. She says quotas are prodding companies to develop more rigorous processes for recruiting new directors.<\/p>\n \u201cThere is more energy and more thought put into how people are chosen, what kind of talent or skills companies want,\u201d she said.<\/p>\n The mandates, however, so far appear to have done little to increase the overall number of women in management\u2014an outcome that proponents of the quota system hoped it will achieve.<\/p>\n In Norway, the first European country to set a 40% quota<\/p>\n for women on corporate boards more than a decade ago, only 15 of the country\u2019s 200 biggest companies have a female CEO, according to Norwegian government data\u2014roughly the same number as in the U.S. Other countries have had just a few years\u2019 experience with the boardroom quotas.<\/p>\n In the U.K., a government-backed, business-led commission is urging major British firms to fill at least a third of all board seats with women by 2020 and publishes an annual list of worst and best performers on that measure. Today women make up 26% of major-company board seats there.<\/p>\n In the U.S., several institutional investors, including State Street Global Advisors and state pension funds in Massachusetts, California and New York, are prodding companies to diversify, threatening to vote against certain board members at firms lacking female directors.<\/p>\n Sophie Bellon, chairwoman of Sodexo, also joined the board of L\u2019Or\u00e9al in 2015. Photo: eric feferberg\/Agence France-Presse\/Getty Images<\/p>\n Among other benefits, they argue that a growing body of research links a greater number of women in the boardroom with stronger, long-term financial performance, while boards with no women tend to suffer more corporate governance-related scandals than average.<\/p>\n Studies from consultants, banks and investment research firms, including McKinsey & Co., Credit Suisse<\/a> , Catalyst and MSCI, bear out the correlations. Detractors of those reports counter that it is difficult to prove female directors are the true cause underpinning more positive outcomes.<\/p>\n BlackRock<\/a> Inc., BLK +2.12% <\/a>t<\/a>he world\u2019s largest money manager, said earlier this year that companies in which it invests should have at least two female directors<\/a>.<\/a> New York State Common Retirement Fund said last month it would oppose the re-election of directors on hundreds of U.S. corporate boards with no women.<\/p>\n Such efforts appear to be quickening the pace of change, albeit not as fast as across the Atlantic. In the first quarter, women accounted for 32% of all new board seats at Russell 3000 companies\u2014which represent the majority of U.S.-traded stocks\u2014up from 29.4% for all of last year and 21.4% in 2016, according to Equilar, a research firm that gathers data on executives and boards.<\/p>\n \u201cThe institutional investors are definitely having an impact,\u201d said Beth Stewart, whose firm Trewstar Corporate Board Services specializes in placing qualified women on boards<\/a>.<\/a><\/p>\n In the first three months of the year, Ms. Stewart said she placed more women on previously allmale boards than she did in all of 2017. The common refrain she hears: \u201cWe\u2019ve gotten enough letters. We\u2019ve had enough pressure. We\u2019re doing something about it.\u201d<\/p>\n Even people pushing for greater boardroom diversity balk at the idea of a U.S. mandate like those in parts of Europe. Rakhi Kumar, a senior managing director at State Street, said rushing companies to comply with a quota could create new problems. \u201cYou don\u2019t want to create unintended practices,\u201d she said.<\/p>\n Instead, she said investor efforts like State Street\u2019s were prompting real change. In the past year, State Street has put on notice more than 700 companies in the U.S., U.K. and Australia with no women on their boards. Ultimately, it voted against certain directors at more than 500 firms that it said failed to show progress in boardroom diversity. But 152 companies it contacted have since recruited at least one female director, and 34 more have pledged to do so.<\/p>\n Despite the recent uptick, the share of women on S&P 500 company boards rose 1 percentage point last year to 22%, according to Spencer Stuart, an executive recruitment firm. It said one big reason is the lack of boardroom turnover: The average director stays on more than eight years.<\/p>\n Write to <\/strong>Vanessa Fuhrmans at vanessa.fuhrmans@wsj.com<\/u><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" \u00a0How to Get More Women in the Boardroom? Some Try Blunt Force\u00a0 U.S. is lagging behind Europe, where mandates have forced corporations to boost the ratio of women holding board seats Five of Macy\u2019s 10 directors are women, making it… Continue Reading