Still Too Few Women, Despite Indications Gender-Diverse Boards Perform Better

Companies in the Asia-Pacific region have the least gender-diverse boards, according to the “Mining the Metrics of Board Diversity” study released by Thomson Reuters.

 

In some of the region's countries, the percentage of boards with no women or women membership of 10% or fewer has slightly increased. For example, the percentage of Singapore companies where no women, or 10% or less, are on the board has risen to 58% in 2012 from 51% in 2008.

 

The percentage of Singapore companies where women constituted more than 10% to 20% of the board rose to 42% in 2012 from 31% in 2008. Over in Hong Kong, the percentage of companies where women constituted more than 10% to 20% of the board slipped to 30% in 2012 from 31% in 2008.

 

China also registered an increase in the number of companies with more than 10% to 20% of women on the board, from 31% in 2010 to 36% in 2012.

 

Countries that had an increase in the number of companies that had more than 20% of women on the board are Hong Kong (from 5% in 2010 to 7% in 2012) and China (from 10% in 2010 to 11% in 2012).

 

Japan and India are the laggards in Asia, compared with Singapore, Hong Kong and China.

 

Women at the Top

 

Source: Thomson Reuters  

Impact on financial performance
The Thomson Reuters study also found that, on average, companies with mixed-gender boards have marginally better, or similar, performance to a benchmark index, such as the MSCI World, particularly over the past 18 months.

 

In contrast, companies with no women on their boards underperformed relative to gender-diverse boards and had slightly higher tracking errors, indicating potentially more volatility.

 

Indices of companies with mixed gender boards have, on aggregate, marginally better or very similar performance to a reference benchmark. Companies with no women on their boards underperformed, on average, relative to gender-diverse boards.

 

Adoption of policies and processes to promote gender diversity and equal opportunity increased from 64% in 2008 to 66% in 2012, and is particularly high among the Americas, even without legislation or quotas.

 

Local legal requirements appear to have had a greater impact in the adoption of policies to improve gender diversity in companies, rather than media related controversies.

 

Global trends indicate a gradual increase in the percentage of companies that have women on their boards with 59% of companies reporting women board members, up from 56% in 2008.

 

Only 17% of the companies analyzed report having a board consisting of 20% or more women (13% in 2008); 45% report boards of 10% or more women (39% in 2008).

 

Regional trends 

From a regional perspective, Europe, MIddle East and Africa (EMEA) has the most women on corporate boards, followed closely by the Americas. Companies in the Asia Pacific region  have the least gender-diverse boards.

 

Sector trends indicate that companies within the technology, industrials and non-cyclical consumer goods & services sectors lead in having the most gender-diverse boards, while healthcare companies have the least.

 

“Over the past five years significant measures have been put into place to help increase equal opportunity and diversity and while there has been a gradual increase in the percentage of companies that have women on boards, there is still a long way to go," says Andre Chanavat, product manager, environmental, social & governance (ESG) at Thomson Reuters.

 

“This study suggests that the performance of companies with mixed boards matched or even slightly outperformed companies with boards comprised solely of men, further reinforcing the idea that gender equality in the workplace makes good investment and business sense.”

 

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