Views on improving the integrity of global capital markets
27 December 2012

Women on Corporate Boards: A Global Update

One of the most interesting global issues in corporate governance this year was the push for diversity on boards — more specifically women on boards. Go to twitter and search for #WOB to see for yourself.

Institutional shareowners often support board diversity but may blanch at quotas calling for women on boards; a November letter to the European Commission by the International Corporate Governance Network — a network of international institutional investors — stated that 66% of their members opposed such a quota. On the other hand, more diverse boards may outperform their less diverse counterparts according to a building body of academic evidence.

Financial performance was significantly higher at firms with at least three women directors, according to the study Does the Gender of Directors Matter?, authored by Harvard University fellow Miriam Schwartz-Ziv.

The Credit Suisse Research Institute came to similar conclusions after a study of 2,360 global companies. The study found that firms with at least one female director outperformed those with all male boards over the past four years. Interestingly, both firms with female directors and those without performed about the same in the years prior to the financial crisis, but those with women on boards performed better in the aftermath of the recent global financial difficulties.

Below is a summary of actions a number of different markets have and have not taken on the issue of women on boards.


The organization BoardLinks was launched on 7 November by the Australian government to place women on public-sector entity boards in order to give them experience required to become corporate directors.

Earlier in the year, the group Super Springboard was established as a training and mentoring program for women on boards of superannuation funds. This project of the Australian Institute of Superannuation Trustees (AIST) proposes that Australian retirement schemes set targets of a minimum 40% of each gender by 2017, versus a 22% average of female trustees today (according to the Boardroom Diversity Index 2012 published by Women on Boards).

European Union

In November, the European Commission eventually settled on a compromise on justice commissioner Viviane Reding’s push for 40% female director quotas in EU countries. Currently, only about 15% of board non-executive seats are held by women at Europe’s largest publicly listed firms. The proposal settled on a 40% target for non-executive board members instead of a mandate. According to the wording of the proposal, issuers with more than 250 employees will have until 2020 to have 40% targets for women on their boards, while state-owned firms would have until 2018. Reding’s earlier proposal called for fines and a moratorium on contracts for firms that do not comply. As the proposal stands, sovereign governments can come up with their own penalties if they so choose. The plan includes a “flexi-quota,” which requires issuers to set their own targets for women in executive board posts by 2020 and to report annually on progress. The proposal now must be approved by the European Parliament and member states. Member states are under an obligation to adopt the relevant transposition measures within two years from the date of adoption of the directive.

Throughout the year, as the plan was considered, the issue of quotas was hotly debated. Earlier this year a letter to nine European countries, including the Netherlands and the U.K., signed and sent a letter to Reding opposing a final rule based on quotas.

The debate seems to have had the desired effect for those championing more women on boards in Europe. According to a recent report by executive search firm Egon Zehnder International, women comprised 31% of new board appointees in 2012, up from 20% in 2010.

In December, Global Board Ready Women, a searchable database of board candidates, was launched by the European Business Schools/Women on Board Initiative. Some European companies have already enacted gender-based quotas for boards.

In 2006, Norway passed a law requiring public companies to fill 40% of their board seats with women. Proponents of the law say it opens up opportunities for more women in senior management, and point to improved performance of companies that had to make the change.  The law’s detractors, however, feel the law may have placed unqualified individuals on corporate boards.

Whatever the case, more EU countries are following the Norwegian model, with Belgium, France, Iceland, the Netherlands, Spain, and most recently Italy creating their own quotas for women on boards.


Japanese boards rank low on diversity scales with women making up only about 1% of directors, according to the GMI Ratings’ 2012 Women on Boards survey. An October seminar in Tokyo sponsored by the Board Director Training Institute of Japan addressed the issue. Panels at the event discussed board diversity, particularly the influence of a 2011 government proposal for 30% female quotas in public offices. Women’s representation in other high profile positions is not much better than their numbers on corporate boards; women hold only about 11% of the seats in parliament despite a 30% goal for 2020 set by the government in 2005.

United Arab Emirates

According to a decree by UAE vice president, Sheikh Mohammed bin Rashid announced on 9 December that all state-owned companies in the UAE will have to have at least one woman on their board.

United Kingdom

In November, eight U.K. executive search firms agreed to publish data on the percent of women they place. A majority of such firms have not signed on to such a pledge.

An inquiry was announced in September by U.K. Business Secretary Vince Cable addressing diversity on boards. Cable asks whether voluntary targets set by a 2011 diversity review have been acted on and whether investors should “take into account the percentage of women on boards when considering company reporting and appointments to the board.” The U.K., along with a number of other European countries, prefers a” comply-or-explain” model that sets targets in lieu of quotas.

The Executive Pipeline Action Group was formed earlier this year by the U.K. 30% Club. The group plans to work with FSTE 350 Index companies to develop senior female talent for board posts.

United States

No talk of quotas or legislation in the U.S., though a number of different groups are active in promoting women on boards. The campaign 2020 Women on Boards has set a goal of 20% representation by women on U.S. corporate boards by 2020. The organization held a number of events in the past year to publicize their cause.

According to a July 2012 survey by GMI Ratings:

  • Only 12.6% of S&P 1500 directors were women
  • 11.6% of Russell 3000 directors were women
  • 36% of Russell 3000 companies have no female directors

Things are slowly improving as women comprised 21% of new board members in the U.S. this year, up from 18% in 2011, according to a recent Ernst & Young study.

A 13 December summit in New York City sponsored by CalPERS, CalSTRS and the Robert Toigo Foundation aimed to match promising female candidates with U.S. boards. Candidates were pulled from the Diverse Director DataSource, which was launched by CalPERS and CalSTRS. Invited firms include the 41 S&P 500 firms that currently have all male directors.

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About the Author(s)
Matt Orsagh, CFA, CIPM

Matt Orsagh, CFA, CIPM, is a senior director of capital markets policy at CFA Institute, where he focuses on corporate governance, ESG, and climate change analysis. He writes and speaks frequently on these topics on behalf of CFA Institute. His paper, Climate Change Analysis in the Investment Process was named “Best ESG Paper” by Savvy Investor in 2021.

2 thoughts on “Women on Corporate Boards: A Global Update”

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