Fewer women on com­pany boards

The Herald (Zimbabwe) - - Foreign Business/ Zse Stocks -

AS AT Oc­to­ber 2018, women held only 17,9 per­cent of all di­rec­tor­ships in com­pa­nies on the MSCI All Coun­try World In­dex (ACWI). While this was slightly up from 17,3 per­cent last year, it is below the pre­dic­tions MSCI made in 2015.

Three years ago the in­dex provider be­lieved that by 2018, 19,4 per­cent of all di­rec­tors would be women. How­ever, im­prove­ments in fe­male rep­re­sen­ta­tion have been slower than MSCI pre­dicted, and at the cur­rent pace of change the com­pany be­lieves it will be an­other decade be­fore rep­re­sen­ta­tion reaches 30 per­cent.

There are 2 694 com­pa­nies in the MSCI, which cov­ers both de­vel­oped and emerg­ing mar­kets. This is there­fore an ex­tremely com­pre­hen­sive anal­y­sis.

In this uni­verse, 21,3 per­cent of com­pa­nies still have all-male boards. This was slightly down from 22,6 per­cent in 2017, but in cer­tain coun­tries the num­ber of all-male boards re­mains per­sis­tently high.

In Ja­pan, 45 per­cent of com­pa­nies in the MSCI in­dex still have no fe­male rep­re­sen­ta­tion on their boards. In South Ko­rea, it is a star­tling 83,5 per­cent. Qatar has no fe­male di­rec­tors at all in any of the 11 com­pa­nies rep­re­sented in the MSCI ACWI.

By con­trast, South Africa no longer has any all-male boards in any of the 49 com­pa­nies that make the in­dex, and this is also the case in a num­ber of Euro­pean coun­tries such as Spain, Swe­den, France and the UK. In the US, 11 of 583 firms have no fe­male rep­re­sen­ta­tion at board level. That is 1,9 per­cent.

Stud­ies have how­ever shown that in or­der for fe­male di­rec­tors to par­tic­i­pate on an equal foot­ing, boards need to have at least three women. This is con­sid­ered the tip­ping point for mean­ing­ful rep­re­sen­ta­tion, but only a mi­nor­ity of com­pa­nies in the in­dex meet this re­quire­ment.

Only 32,1 per­cent of firms in the MSCI ACWI had at least three women on their boards last year. This is up from 31,5 per­cent in 2017 and 27,4 per­cent in 2016.

Only 43 com­pa­nies had boards that com­prised at least 50 per­cent women. That is just 1,6 per­cent of the uni­verse.

Nor­way, France and Italy are the only coun­tries where 100 per­cent of com­pa­nies in the in­dex all have at least three women on the boards. These na­tions have all set manda­tory re­quire­ments for fe­male rep­re­sen­ta­tion, so it would in fact be a breach for any com­pany not to meet this level.

In South Africa there are no re­quire­ments for women to be rep­re­sented on listed com­pany boards, but 61,2 per­cent of firms in the in­dex do have at least three fe­male di­rec­tors.

One of the most dis­ap­point­ing find­ings of the anal­y­sis is that the per­cent­age of fe­male chief ex­ec­u­tive of­fi­cers (CEOs) at com­pa­nies in the MSCI ACWI has been ef­fec­tively stag­nant for a num­ber of years. In 2015 it stood at 3,5 per­cent. In 2018 it was just 3,8 per­cent.

In only five did more than 10 per­cent of com­pa­nies have a fe­male leader. In South Africa, just one com­pany of the 49 in the in­dex has a fe­male CEO.

Fe­male chief fi­nan­cial of­fi­cers (CFOs) are slightly less rare. In to­tal, 11,1 per­cent of com­pa­nies in the MSCI ACWI had a woman in this po­si­tion last year.

How­ever, 20 coun­tries had no fe­male CFOs at all. In South Africa, just 8,2 per­cent of com­pa­nies had a woman in this po­si­tion.

Over­all, the study gives a mixed pic­ture of fe­male rep­re­sen­ta­tion at board level across the world. While there are coun­tries where progress has stag­nated, many oth­ers have made im­pres­sive strides.

As MSCI notes, “Despite this over­all slow pace, there con­tinue to be sev­eral bright spots of im­prov­ing rep­re­sen­ta­tion. Euro­pean coun­tries with man­dates, in­clud­ing Nor­way, France, and Swe­den, con­tin­ued to in­crease fe­male board rep­re­sen­ta­tion above the level re­quired by law, with Aus­tralia and New Zealand also reach­ing the level of 30 per­cent of di­rec­tor­ships held by a fe­male.

“In the emerg­ing mar­kets, Malaysia and In­dia, who both have rel­a­tively new man­dates, saw in­creases in the per­cent­age of di­rec­tor­ships held by women that were con­sid­er­ably higher than the over­all emerg­ing mar­kets rep­re­sen­ta­tion.”

In South Africa, firms per­form well in terms of fe­male rep­re­sen­ta­tion at board level, but less im­pres­sively when it comes to women in lead­er­ship roles. That is where em­pha­sis should now be placed. — Money­web.

Stud­ies have shown that in or­der for fe­male di­rec­tors to par­tic­i­pate on an equal foot­ing, boards need to have at least three women

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