Fewer women on company boards
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