SocialFunds.com reported in late December that women are underrepresented on corporate boards in 51 countries, as surveyed by Corporate Women Directors International (CWDI).
“Very simply,” the report states, “Studies all echo the same principle: the greater the percentage of women on boards and in senior management, the better the company’s financial performance.”
The report, entitled “Accelerating Board Diversity Globally”, cites several reports published in the last decade that find a correlation between female directors and improved corporate profitability (more notably reports by McKinsey & Co. and Goldman Sachs).
A recently published study of the diversity practices of the US S&P 100 by Calvert found that more than half of these companies have no female or minority representation in the highest paid executive positions.
CWDI’s report analyzes a number of strategies to increase women representation on boards and in senior management, and found that quota legislation is effective. Many European countries, as well as Israel and South Africa, have passed legislation that requires a certain percentage of director positions be allocated to women. Recently Italy has come on board with similar legislation.
Because passage of quota legislation would be unlikely in the US, investors and other shareholder activists are issuing resolutions to pressure companies to improve board diversity.
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What do you think of this issue? Do you think the statistics for corporate performance under female leadership are true? Do you think shareholders should continue to lobby for board diversity? Discuss!
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