CWDI Report Shows Women Hold 32.1% of Board Seats in Europe
The recent decline of women leading powerhouse companies, now at 4.8%, drops the U.S. below the percentage of women CEOs of Europe’s leading companies for the first time. Among 600 blue-chip companies in the 28 EU countries at the end of 2017, there are 33 women CEOs or 5.5%, according to the European Institute for Gender Equality. Both percentages, however, clearly show the long road to equity at the top of the corporate ladder.
A new report by Corporate Women Directors International (CWDI) shows the U.S also lagging behind European companies in appointing women to board seats. Among the 200 largest companies in the world as ranked by Fortune, the percentage of women board directors of European companies has increased from 9.1% in 2004 to 32.1% in 2018. In contrast, the pace of change in the U.S. has been sluggish, with U.S. companies in the Fortune Global 200 only increasing from 17.5% to 26.3% in the past 14 years at a rate of .5% annually.
“The U.S. no longer leads in gender diversity on boards as it did in 2004 when CWDI began tracking women directors in the 200 largest companies globally,” says CWDI Chair Irene Natividad. “While European countries have taken proactive steps to accelerate women’s access to board seats, there has been no national approach in the U.S. As a result, there is now a far larger pool of women directors in Europe appointed in a shorter period of time.”
What accounts for Europe’s success in moving more women into the corporate boardroom is the proactive use of quotas now adopted by 24 countries. In CWDI report’s Top Ten list of best performing companies with the highest percentage of women directors, the majority are based in Europe with French energy giant, Engie, topping the global listing with a predominantly female board at 52.9%. Only 3 U.S. companies made it to this Top Ten listing – General Motors, HP Inc. and Hewlett Packard Enterprises.
“The ‘supply’ of board-ready women has been there for some time, but what quotas do is force the demand from companies within a specified deadline. That’s why they’re effective,” states Natividad.
Beyond quotas, another effective initiative now adopted by 28 countries is the inclusion of gender diversity as a principle of good corporate governance. Australia, the U.K. and Finland are cited in the report as having been particularly successful in combining this recommendation with specific targets to be reached in terms of women’s appointments to boards.
What distinguishes both strategies is that they are national initiatives, and the report repeatedly underscored that efforts to increase women’s access to corporate leadership must be national in scope in order to be effective.
The largest economy in the world, the United States, does not have a national strategy in place, nor do the second (China) or the third largest (Japan), so the rates of increases in the appointments of women to board seats are low in these three leading economies compared to European countries which have adopted more aggressive measures to open up board directorships to women.
The report recommends continued exposure of the ‘business case’ — that more women in senior leadership correlates with companies’ better financial performance — to CEOs and C-suite executives so that they see gender diversity at the top as a business priority and not a socio-cultural, issue.
For a copy of the full report, click HERE or find it on Amazon. For more information on the CWDI Report, please contact Larry Grady, Corporate Women Directors International, at cwdi@globewomen.com.
