Report highlights link between diversity and performance

A Credit Suisse report finds representation of women in senior roles increasing worldwide and a strong link between performance and diversity at senior levels.

Woman in boardroom


Female representation on boards globally has doubled in a decade, with the US and Asia Pacific [except Japan] leading Europe on representation of women in management and strong evidence that having more women in decision-making roles improves stock market, diversity and corporate performance, according to a new study.

The CS Gender 3000 report, ‘The CS Gender 3000 in 2019: The changing face of companies’, from the Credit Suisse Research Institute analyses the gender mix of the executive teams of over 3,000 companies stretching across 56 countries and comprising 30,000 executive positions.

The report says that the percentage of women on boards globally now stands at 20.6%. This has broadly doubled since the start of the decade and risen from around 15.3% since the last report in 2016. It highlights regional differences, for instance, representation is as low as 5.7% in Japan, but closer to 29.7% in Europe. It says Europe has “the greatest tailwind of policies and initiatives seeking to address gender diversity within supervisory boards”.

North America has arguably seen the most significant improvements without formal regulatory pressure, with board representation rising from 17.3% in 2015 to now close to 24.7%. This sharp uptrend of improvement in North America has not been mirrored in South America, which has seen only gradual improvement toward 7.8%, says the report.

Asia Pacific has also seen a more modest upward trend, although there is a considerable range of country-by-country experience, ranging from 3% to 30%. While the absolute representation of women on the board is low in Japan, the report notes that it was less than 1% at the start of the decade.

The countries with the largest representation include those where quotas or less formal targets exist such as Norway, France, Sweden and Italy. The countries seeing the biggest proportional increase in the last five years have been Malaysia, France, Australia, Germany and Austria (between 9.4% and 12.8%).

The proportion of women in management has risen to 18% from 14% in the 2016 study. Regionally, the US (21%) and Asia Pacific (19%) reflect greater management diversity than witnessed in Europe (17%) despite the policy focus upon quotas in the boardrooms in many European countries, says the report, adding that the spillover from this trend into the most senior executive positions has been limited. Barely 5% of the CS Gender 3000 have female CEOs, and less than 15% female CFOs. Female roles are still clustered away from operational decision-making. A third of all “shared services” functions are held by women. 80% of heads of IT positions are male.

Contrasts across the Power Line are less marked in Asia Pacific than in other regions. It has the highest number of female CEOs (5.6%) and CFOs (18.9%). The comparable figures for Europe and North America are 4.1% and 4.5% for CEOs and 13.3% and 13.6% for CFOs, respectively.

The report shows that the proportion of women in management increases as the percentage of women on boards rises, suggesting that the impact of greater diversity in the boardroom leads to a better gender balance in executive functions. At the 50% level of board representation, the report finds nearly 30% of women in management.

However, the report questions whether there is as much of a “spillover” effect from board to management as might be expected. Despite the existence of quotas and related policies, the board representation in European countries is not mirrored in exceptional management representation by women when compared to countries such as those in Asia Pacific as we have seen in the CEO and CFO data, and also the USA.

The report found strong correlations between boardroom diversity and share price outperformance [the act of producing better results in a particular situation than others have done] and there was also a coincidence of higher levels of profitability when industries are judged like for like.

The 2019 report has shifted focus to analyze gender diversity and corporate performance through the lens of management rather than just boardroom. It says outperformance among companies with more diverse management teams is more than threefold that when only considering boardroom diversity.

The report also finds that family-owned companies in general tend to outperform non-family-owned peers in terms of financial and share-price returns. Those that tend to perform best, however, appear to have substantial female representation at the executive level.

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