Elusive Target: Women Securing Board Chairmanships

June 19, 2015 – According to the most recent ‘Women in the Boardroom: A Global Perspective’ report by Deloitte, representation of women on corporate boards continues to increase, but the number of women leading boards still remains low globally. Overall, women now hold 12 percent of seats worldwide with only four percent chairing boards. European countries continue to lead on gender diversity in the boardroom, with Norway, France, Sweden and Italy among the countries with the highest percentage of women serving on boards. Regionally, countries in the Americas and Asia-Pacific have progressed the least. With respect to women chairs, the three regions have approximately the same percentage: EMEA (five percent), the Americas (four percent) and Asia-Pacific (four percent).

In the U.S., only 12 percent of board seats are held by women and three percent of board chairs are held by women. At present, in Canada, 13 percent of board seats are held by women. However, the percentage of boards led by women there is six percent.

In the U.K., there are no quotas in place for women on boards, but all Financial Times Stock Exchange (FTSE) 100 companies have women represented, with 16 percent of board seats held by women, while four percent of board chairs are held by women. France reinforced boardroom gender diversity quotas in 2014. As a result, the number of women serving on boards (30 percent) continues to increase, while three percent of board chairs are held by women. Italy introduced a ‘gender balance’ quota in 2011. The quotas have helped to provide a significant increase in the number of women represented on boards, with the percentage of board seats and board chairs currently at 22 percent. Germany will introduce a mandatory gender quota from 2016 onward for supervisory boards of about 100 listed companies with employee codetermination (where workers participate in management of the companies they work for). Eighteen percent of board seats are currently held by women and four percent of board chairs are held by women.

At six percent, gender diversity in some of Asia’s leading economies is the lowest compared to other parts of the world. Only a few countries in the region have quotas or other approaches to address the issue. Many Indian companies have started to introduce women directors to their boards. Currently eight percent of board seats are held by women and three percent of boards chairs are held by women. In Hong Kong, only about 10 percent of the board members of listed companies are women, even though women account for almost half of the total workforce. There are no gender quotas in Australia for women on boards or in senior positions; however the numbers are gradually improving. The percentage of board seats held by women is currently 15 percent and six percent of board chairs are held by women.

“We’ve seen a welcome increase in women on boards; however the number of women securing the top spot remains elusive even in the most progressive countries. Of course, in many countries, the chair is an executive position, but this absence of women among chairs is revealing. For example, Denmark has the sixth-highest number of women on its boards, yet ranks at the bottom—not a single board in Denmark had a woman chair in our study,” said Dan Konigsburg, managing director, Deloitte Global Center for Corporate Governance.

“The global statistics mask important differences within countries. For example, Scandinavian countries have successful policies that make it easier for women to serve on boards, compared with the Asia-Pacific region’s slow growth,” Mr. Konigsburg added. “We actively encourage increased collaborative effort from organizations, governments and policy-makers; it is the only way we will begin to see results.”

A number of initiatives are underway globally to mobilize efforts to increase women board representation. A national campaign to increase the percentage of women on U.S. company boards to 20 percent or greater by 2020 is underway by an organization aptly named 2020 Women on Boards. Overseas, the 30% Club has helped increase female participation on boards by offering mentoring and convening working groups to share best practices on board diversity. Its target is to bring FTSE 100 board membership representation of women to 30 percent by the end of this year (the number stands at just under 24 percent). And The Diversity Action Committee, formed to build up the representation of women directors on boards of companies in Singapore, has signed up nearly a dozen leading executive recruiters to help expand directorships to women.

Search firms themselves are also mobilizing: Egon Zehnder has set out to boost the number of female chief executives of the U.K.’s top 100 companies to 25 by 2025. Zehnder, which advises roughly half of the U.K.’s FTSE 100 companies on succession planning and recruitment, says that only nine percent of top executive jobs at British companies are filled by women. The firm launched its ’25 by 25′ drive about eight months ago. Today, just five female executives run FTSE 100 companies.

Spencer Stuart and WomenCorporateDirectors (WCD) teamed up earlier this year to launch a series of global initiatives aimed at bringing more women onto boards. “Moving the needle in the U.S., an area where the presence of women on boards is still at just less than 19 percent, takes incredible amounts of action on all sides of the equation,” said Julie Hembrock Daum, Spencer Stuart’s North American board practice head. WCD is the largest membership organization of women on boards, with 66 global chapters representing more than 3,500 members serving on 6,500 boards.

Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media

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