Study finds that having women on the board of directors or senior management promotes diversity

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If you want to make a good guess about a company’s gender diversity, you can first look at who its CEO or chairman of the board is, according to a new study.

Having a female CEO at the helm of a company or chairman of the board of directors tends to make a huge difference, according to Altrata’s latest report. Global Gender Diversity reported on Thursday.

The report looked at BoardEx data to examine the representation of women on the boards and management teams of 1,677 public companies in 20 countries as of the first quarter of this year.

It turned out that the representation of women in boards of directors and executive bodies remains extremely low. And women who sit on company boards are often not in the most powerful positions.

The study showed that about 28.2% of board members are women. However, many of these women have been appointed to non-executive positions, which often involve board oversight rather than actual decision-making power.

Breaking down the representation on the board of directors further, it turns out that women make up about 9.9% of executive directors and 8.9% of chairmen of the boards of directors. The report states that about a third of non-executive positions are held by women.

The news from C-suite is even worse. Only 5% of CEOs are women, and 19.2% of corporate management members are women. (Focusing only on S&P 500 companies results in a slightly higher share of female CEOs at 6.8%, the report says.)

But having a woman at the top can affect the entire organization. Of the companies studied, registered in the USA Organon had the highest proportion of women on the board of directors, while in Singapore Integrated Commercial Trust CapitaLand tops the global corporate leadership list.

The organon was isolated from Merck about a year ago and is dedicated to women’s health. Its board is dominated by female directors and is chaired by Carrie Cox. She was joined on the board by eight other women and four men.

None of the companies surveyed had an all-female board of directors, but as of June 2022, 81 boards of directors had only men.

Achievements can be fragile. As leaders come and go, the numbers change.

Tasks Ulta Beauty. It ranked second on the list of global companies with the most women in leadership positions. About 70% of top managers are women. But it’s worth noting that its previous CEO was a woman. Following the departure of Mary Dillon in June 2021, Dave Kimbell was appointed to the top post. For now, women still dominate Ulta’s leadership team, with half of its board, including the chairman, made up of women.

It’s also worth noting that a female CEO is not required to have gender diversity. etsy, Bristol-Myers Squibb, Autodesk as well as Bathroom and body work all have male CEOs, but there is still a large percentage of women in key positions.

However, the report says that having women in senior management is key to increasing the number of women holding CEO positions. CEOs are often drawn from senior management and the presence of women in these positions is a reflection of the company’s ability to support and train them.

“If not enough women get the corporate experience needed to compete for the most powerful board positions, such as CEO, it could slow down progress towards achieving equity at the highest levels of corporate power.” – Maya Imberg and Mein Shaban, lead authors of the report. authors wrote.

Some advocate the introduction of quotas to increase diversity. Eleven of the 20 countries surveyed have either mandatory or voluntary benchmarks for women’s representation on boards of directors. As a result, 32% of corporate boards in these countries are women. By comparison, nine countries without such a requirement, including the US, have an average of 24%.

According to Altrata, women’s representation could further increase as a result of legislative efforts. For example, Spain has not yet reached its goal of 40% of directors in public companies being women. Just over a third of CEOs are currently women, and companies should hit the target by the end of this year.

One of the arguments against such requirements was the fear that the same women would be invited to the board of directors of companies again and again, but the study shows that concern is exaggerated.

“Fears that women may be more likely to ‘go overboard’ than men seem overblown,” the report says. The analysis showed that male directors served on average in 1.8 public companies, and women served on average on 2.1 boards of directors.