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Below you will find the highlights of our study, which show improvement in many countries around the world.
Overall, 23.3 percent of board positions are now held by women globally, up from 20.4 percent in 2018. The news is positive, but still far from parity. When it comes to other types of diversity, it is difficult to even find numbers to create a base case, although that is beginning to change.
We believe passionately that increasing diversity in both the boardroom and the C-suite is good for business—and good for the world.
One important measure of progress towards gender diversity is the percentage of major companies that have at least one woman on their board, a number that has risen to 89 percent this year globally, from 85 percent in 2018. And yet, one in ten large global companies still does not have even one female director.
Much depends on the location. In 2020, the number of countries in the “One on Board Club” was the same as in 2018, with 19 of the 44 countries we studied having at least one female director. However, three countries—the Netherlands, Portugal, and the United Kingdom—joined the club this year, while former members India, Poland, and Turkey departed. Nine of the 19 countries have instituted a quota, requiring that companies reach a certain percentage of women on board by a certain time. Yet of the remaining countries sampled, 25 of them, including China, Brazil, Germany, and the United States—some of the world’s largest economies—are still home to large companies with no women on their boards at all.
It is disappointing that the past two years have not led to more countries joining the One on Board Club. If women are not represented on the boards of the world’s largest companies, it’s hard to claim a true commitment to diversity. Those who do not demonstrate this commitment may also be vulnerable to reputation risk as other companies embrace its importance.
In some countries, the perceived lack of sufficiently experienced female and other underrepresented minority candidates leads to many of the same people being approached for several boards. Yet pursuing “overboarded” directors misses an obvious possible solution: opening up the consideration set of board-ready candidates and actively building relationships with them. Says Monica Lozano, a director sitting on the boards of Target Corp. and Bank of America Corp.: “As the chair of the governance and nominating committee of various boards that I’ve been on, I have really pushed us away from titles to competencies. You’re looking for people that have been able to navigate change, that understand the culture of a boardroom, that have been able to demonstrate problem-solving, good decision-making skills.” Using markers of executive potential — a combination of traits including insight, determination, curiosity, and engagement—is, we believe, the best way to evaluate an executive’s ability to take on dramatically different leadership roles, including joining a first board.
The three countries underlined are new in 2020
“As the chair of the governance and nominating committee of various boards that I’ve been on, I have really pushed us away from titles to competencies.”
When it comes to fully experiencing the power of diverse thinking, we believe that it takes three underrepresented voices in a boardroom to truly change internal dynamics. Here, we see significant progress in 2020, as 18 countries, up from 13, average three or more women on the boards of their largest companies.
The countries that have instituted quotas average a much larger number of women on their boards—unsurprising, given that it’s a legal requirement. Eight of the 18 countries averaging three or more women have quotas or regulations in place requiring the hiring of women. Switzerland is the most recent country to add one.
It is clear that a larger number of diverse voices changes the boardroom dynamic. How, then, to get there? Quotas are one clear path. But there are also other actions that have spurred positive change. In Canada, public companies must now provide annual proxy disclosures about their diversity policies and practices at both board and executive leadership levels. Public pressure by institutional investors has impact, as does employee pressure.
Yet what is most important in enabling change is, in some cases the simplest. Nominating committee members and others in leadership roles must commit personally to making diversity an absolute requirement. If they don’t have access to robust pipelines of women or other underrepresented groups, they must hire people who do. “There is sometimes a view that ‘we just don’t know any women,’ or ‘we just don’t know any BIPOC (Black, Indigenous, and People of Color) candidates.’ And that’s often true,” explains Royal Bank of Canada Board Chair Kathleen Taylor. “We’ve seen from the research that like hires like, and like attracts like, and so we shouldn’t at all be surprised that we need to come outside the bounds of what we might normally think of as our regular search process.”
The underlined eight countries on this list have quotas.
There were five new entrants to the list since 2018 – Australia, Finland, New Zealand, Portugal, Republic of Ireland, of which just Portugal has a quota.
“I was pretty determined not to be the token woman appointment that would tick some boxes.”
While gender diversity on boards has received much attention, the focus is now, appropriately, expanding to include ethnic and racial diversity. In some countries, there are regulations prohibiting identification by race and ethnicity, so accurately tracking leadership representation is difficult if not impossible. Where measurements exist, the board representation numbers are woeful: In the UK, for example, the Parker Review Committee, a nonprofit executive group, set a target for FTSE 100 companies to have at least one non-white corporate director by 2021 and for the FTSE 250 to do the same by 2024. As of early 2020, 37 percent of the FTSE 100 companies did not have any such representation on their boards, and just 54 of those 250 companies had reached that goal.
Momentum is shifting now. The killing of George Floyd in the United States in the summer of 2020 and the subsequent protests that spread around the world led to an unprecedented focus on racial inequity, including in corporate leadership. Says Enrique Lores, CEO of HP Inc.: “I think we all saw what happened a few months ago as our wake-up call. We have realized that we have an obligation to create a better world for our employees, for our companies, for our kids.” Importantly and encouragingly, this has expanded the conversation around diversity in board representation beyond gender.
It is critical that boards seize this moment to make progress on gender diversity and other forms, including ethnic and racial diversity. Well-documented arguments for broad identity diversity on boards abound, including evidence that diverse experiences on any team lead to more innovative thinking when the boardroom reflects the customers. “I believe that you can only achieve the full value of a business if your team is representative of the consumer base that you’re selling into,” explains Robert Hanson, EVP-President of wine and spirits and former board member for Constellation Brands Inc.
Boards that have made progress on gender diversity have set goals, expanded the consideration set of board-ready candidates to include first-time directors, and built relationships with potential candidates outside of the current board’s immediate networking circles. These same disciplines can and should be applied to expand representation beyond gender; just because one underrepresented group has been included does not mean that the board is now diverse. “It’s about the ‘and,’ not the ‘or,’” says Cynthia Soledad, leader of Egon Zehnder’s Global Diversity, Equity & Inclusion Council.
“There’s a shift in both the quality of perspectives and the quality of the discussion. In a male-centric board, usually it panders to either hierarchy or to the wisest man in the room, or a combination of both.”
Overall, 23.3 percent of board positions are now held by women globally, up from 20.4 percent in 2018. This is good news, directionally, and a larger increase than in 2018, when the number rose less than two percentage points. Yet positive change also requires that women and other underrepresented candidates serve as leaders, not merely participants, on boards.
Women now make up 27.3 percent of all board committee leaders globally, up from 25.5 percent in 2018. They comprise 2.1 percent of all board chairs, up from 1.5 percent in 2018. What that means overall is that just 6.7 percent of all board seats are held by women in leadership roles. This is up from 5.6 percent in 2018—a good sign—but it is not enough.
Certain countries, many of which have quotas, have made great strides over the past two years. In Norway, women make up 43 percent of board chairs at the companies surveyed; in Italy, the number is 28 percent. Says Pam Warren, co-leader of Egon Zehnder’s Diversity, Equity & Inclusion Council: “They have had more time to demonstrate the strength of their contributions and be recognized for them.”
One way to get more underrepresented voices into leadership roles is to create more opportunities. That can come from board turnover, expansion of the boardroom, or even by adding new roles, such as vice-chairs of the board and co-leaders of committees. Once there is more diversity in committee leadership—particularly in the nominating and governance arena—the broader networks of those chairs often build a stronger pipeline for these groups as well as within the executive teams themselves. “We are now becoming a truly global business. We are not going to have all the answers,” explains Roberto Marques, executive chair and group CEO, Natura & Co. “We need to open the doors to a different kind of profile.”
Just as purposeful succession planning at the executive level is best practice, it is also true at the board level. Experienced directors are absolutely vital to a board’s success, but they must also share their power. The appointment of vice-chairs can be an effective way to build capability and elevate women and other diverse groups into positions of greater authority. It is also about creating a leadership pipeline inside of a board. This can be done using the same approach to succession used in executive teams, with mentorship, development plans, and formal education.
“Building a great board is a long-term proposition. You have to be very planful and very thoughtful.”
The value of diversity goes far beyond one particular ethnic group or even gender. And while it is necessary to bring new voices into the boardroom, they must also be included to the point that all these perspectives become a seamless part of a board’s governance process. The LGBTQ+ community is an example of a group whose views have been largely ignored. It does not help that data on the number of LGBTQ+ executives is nearly non-existent.
In 70 countries, being openly gay remains illegal; in many others, prejudices are still culturally acceptable. Adding to the complexity is the fact that LGBTQ+ is not a physical characteristic, making measurement that much more challenging. Yet even in the U.S., where many protections have been afforded to members of this group, just 24 of the more than 5,000 board seats in the Fortune 500 index are held by openly LGBTQ+ individuals, according to Out Leadership. Of that tiny number, only two are people of color, and zero are women of color.
As we see in the statistic above, the number of openly out LGBTQ+ board members remains incredibly low. And only nine of those Fortune 500 companies include sexual orientation and/or gender identity as diversity criteria in their nomination and governance policies. Bringing the LGBTQ+ perspective and experience into the boardroom requires an understanding of the challenges that these individuals face, as well as openness and comfort in discussing and disclosing sexuality. Only once that is done—and alternative viewpoints are not just represented but also consistently included—can true change occur.
“When I arrived at Lloyd’s, we had very few people filling that box in as to their sexuality. As soon as we started talking about inclusion, the importance of diversity, when I started using words like lesbian, gay, bisexual in town halls, we shot up immediately to 90 percent of people declaring their sexuality,” explains Dame Inga Beale, former CEO of Lloyds and current director of several boards. “But you’ve got to have this safe environment.”
“When people come to work, they need to feel like they can contribute, and they need to feel like they have a chance for advancement. If they don’t see themselves in the middle management and the upper management in the company, then they struggle to feel like they belong. And if they don’t see it at the board, then they struggle to feel like they belong.”
In the past two years, women have made up 30 percent of all new directors (those hired in the past 12 months), up from 27 percent in 2018. The number of new directors overall has also risen, from 11.4 percent in 2018 to 13.5 percent in 2020. This is certainly good news; it shows that there are more slots available, and that women are being considered and chosen more frequently for them. Yet, what this means in reality is that just 4 percent of all current directors are women new to the board, up from 3.1 percent in two years. In almost no region of the world do women make up a larger percentage of new board members than men. One bright spot is New Zealand, where a full two-thirds of new directors in our data set are women, and South Africa, where the number is 62.5 percent.
Of the 13.5% of new appointments
Of the 13.5% of new appointments
Currently, women make up 27.3 percent of new
directors, defined as those hired in the past 12 months.
That means that just 4 percent of all directors are women new to the board.
The obvious reality from the statistics above is that we are not doing nearly enough to change the perspective of the modern boardroom. This is despite the fact that many efforts are being made—whether via quotas, incentives, targets, or simply a shifting realization that it is good for business. “What diversity promotes is disagreement,” says Nadia Shouraboura, technology executive and member of several boards. “When you are making a business decision, the worst thing and biggest waste of time is if you sit at the table and everybody agrees.”
One way to address this is by looking at board turnover itself. More regular pruning and refreshing of the board should be considered, along with expanding the board size if that is an option. However, our data show that the average board size has actually fallen in the past two years, from 11.4 members to 11.1 globally.
Another way to bring fresh perspective to boards is to keep lists of potential directors so that you can act quickly when space emerges.
“I believe that if you want to be successful integrating the world of tomorrow, you also need to have the players in the world of tomorrow playing a role.”
Since we conducted our last Global Board Diversity Tracker in 2018, the world has changed dramatically. The need for diversity has only increased: The global pandemic has proven that nontraditional types of leadership skills—be they increased ability, courage, more emotional intelligence, or comfort with a digital-first approach—are needed more than ever. At the same time, a painful and public global reckoning with a culture of embedded racism and discrimination has put increasing pressure on companies to make quick and significant changes to their leadership teams, both inside and outside of the boardroom.
Visualize the tracker results on our animated Tracker Highlights pageTracker Highlights
Explore specific results by category, country, and yearBuild Your Own Report
Learn from chairs and directors how they diversified their boardsVideo Interviews
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