France has overtaken the United States’ lead role as the country with the highest percentage of women directors among the 200 largest companies in the world, according to the latest Corporate Women Directors International study of women directors. Propelled by quota legislation passed in 2010, a quarter of directors (25.1%) in France are now women, while the percentage in the U.S. peaked at 20.9%.
“France has raised the bar for other countries interested in opening up corporate board rooms to women,” said Irene Natividad , chair of the Washington-based international research group CWDI. “The dramatic increase in the number of women now serving on the boards of French companies shows that it is possible to do this at a quicker pace as long as there’s a plan to do so.” Among the Fortune Global 200 companies, the average percentage of women directors came to only 15%.
An impetus behind the increases in France and other European countries is through government quotas, which require 30-40% of board seats to be allocated for women. Norway, which paved the way by successfully reaching its 40% mandate for women on boards in 2008, has now been joined by Spain, the Netherlands, Iceland, Italy, and Belgium. Outside of Europe, Malaysia has a quota which will be implemented by 2016. With10 other countries with quotas for women on the boards of government-owned companies, there are now 18 countries using this strategy, with the United Arab Emirates the latest to require companies to have women on their boards.
The other propellant that led to more women board directors this year is the inclusion of gender or board diversity in the corporate governance code in several European countries – an initiative that has now spilled over to other continents. A very popular strategy for countries wanting to avoid quotas, there are now 17 countries who have adopted this initiative. Finland led this drive resulting in 22% of board seats now held by women, without a quota in place.
Among the Fortune Global 200 companies covered in the 2013 CWDI Report, those companies based in countries with quotas had a higher percentage of women directors (18.9%) than the average representation of women in peer companies at 15%. The three countries with the largest increases in the percentage of women directors since 2004, when CWDI first tracked women directors in the Fortune Global 200, all have quota laws – France (7.2% to 25.1%), Spain (1.9% to 12.7%), and Italy (1.8% to 9.3%).
Similarly, those companies which made it to the Fortune listing, which are based in countries with gender diversity recommendations for corporate boards also had a higher percentage of women directors at 19.9% than those companies in countries without such a directive in their corporate governance code.
“Quotas work,” said Natividad. “Inserting gender diversity into corporate governance codes works. What doesn’t work is assuming that women will rise to board seats ‘naturally’, and therefore do nothing.” The three countries with the lowest percentage increases in women-held board seats are the United States, China and Japan and all three countries combined have the largest cluster of companies among the 200 largest in the world at 104. None of these countries have concerted proactive strategies to improve the numbers of women directors in their respective countries. Should they do so, the percentage of women directors among the Fortune listing would rise significantly.