Gender representation on corporate boards of directors
[10] Further, achieving gender equality, including in economic decision-making processes, is one of the United Nations' Sustainable Development Goals.
[13] In the United States, Title VII of the Civil Rights Act of 1964 prohibits discrimination against employees on the basis of sex.
[14] The same study also found that higher corporate ownership and firm risk led to a lower probability of having a female presence on a company's board.
[15] The findings regarding firm size and corporate risk are consistent with a study conducted on 1002 companies across Brazil, Russia, India, China, the UK and USA.
[18] An academic article produced by Nguyen, et al., suggests that numerous studies have found improvements in firm performance influenced by female staff members on corporate boards.
Females bring a number of “social, managerial, and leadership qualities,” (Nguyen, et al.) to the table that directly influence corporate governance practices, such as ethics, trustworthiness, and risk taking/aversions.
[20] The theory that gender diversity on corporate boards is of value is further strengthened by a study of 127 Malaysian firms that found stock markets react in a positive manner to the appointment of female directors.
The study's authors stated that the important policy implication of their findings is that companies on the Iraqi stock exchange and security commission should incorporate gender diversity in their corporate governance practices.
[14] Further, a survey of 6500 company boards revealed that an increase in participation by female directors reduces the firm's chances of becoming embroiled in corporate governance issues.
[25] Another study, conducted by Gennaro Bernile, Vineet Bhagwat, and Scott Yonker in 2017, found that "board diversity [was] associated with lower realized firm risk.
"[26] In addition, firms with more diverse boards tended to pay higher dividends, pursue less risky financial policies, and invest more in research and development.
They posited that because diverse boards can endure longer decision-making processes, they can fail to respond rapidly when a quick decision is necessary.
In the Scandinavian countries, Norway leads the way with 35.5% of board seats of the companies in the OBX index held by women.
Some of the more recognizable companies in that group are Vodafone, Hermès, Diageo, H&M, Auto Trader, BNP Paribas, Pernod Ricard, Shell, SAP, and Heineken.
Some of the more recognizable companies are Citigroup, Coca-Cola, General Mills, Hasbro, Match Group, Omnicom, Paramount Global, Progressive, TJX, Ulta Beauty, Walgreens Boots Alliance, and Walt Disney.
Belgium, France, Germany, Iceland, India, Israel, Italy, Norway, the UAE[50] and Pakistan[51] and Spain currently have legislated quotas for women on corporate boards of publicly listed companies.
[54][55] In Australia, the ASX Corporate Governance Council announced proposed amendments to its guidelines to include a 30% quota in April 2018.
[58][59] In 2006, the Norwegian government introduced quota legislation that required both public and state owned companies to have 40% female board representation by 2008.
[63] In 2021, the United Arab Emirates made it law for each locally listed company to put at least one woman on their board of directors.
Regulator the Emirates Securities and Commodities Authority (ESCA), had previously set a 'comply or explain' target for 20 percent female representation on their boards.
The move is “in the context of keenness to empower Emirati women and encourage them to play a greater role in the boards of directors of listed companies,” ESCA said in a statement.
[64] Quebec's Bill 53, passed in 2006, is the only provincial legislation currently in effect in Canada that deals with gender representation on corporate boards.
So even if there is greater gender diversity on a corporate board, the pool from which candidates are chosen remain disproportionately occupied by men.
[87] Fifteen countries have inserted requirements to report gender diversity board composition in their corporate governance codes.
[94] In 2012, the Finland Chamber of Commerce implemented a mentoring program for women in mid to high-level managerial positions as a supplement to their current approach.
[105] In the United States, The Nasdaq stock exchange filed with the SEC to adopt new listing rules mandating board diversity.
[107][108] Philipp Geiler and Luc Renneboog found that female executive directors of listed UK companies earn 23% less than their male counterparts.
Other relevant factors found by Maria Consuelo Pucheta-Martinez and Inmaculada Bel-Oms include whether the Compensation Committee contains female members and the size of the companies.
[109][111] Protests in the United States in 2020 have ignited controversy that progress on board diversity has advanced significantly faster for white women than for racial minorities.
[119] In 2020, several major companies appointed Women CEOs, including Citigroup, Clorox, CVS, Dick's Sporting Goods, and UPS.
