UK lags behind on gender parity


8 Mar 2023

Boardrooms in Europe, South Africa and Australia lead the way in embracing female talent, finds Andrew Holt.

Boardrooms in Europe, South Africa and Australia lead the way in embracing female talent, finds Andrew Holt.

Boardroom diversity is a source of financial outperformance and helps to create sustainable value, according to a global study of female directors by BNP Paribas Asset Management.

Improving gender diversity is a focus of the asset manager’s voting and engagement policy, which it has strengthened this year by increasing its minimum threshold for female directors by 5%.

The study compared more than 3,000 companies of which BNP Paribas AM is an investor with around 17,800 listed companies included in the Institutional Shareholder Services (ISS) dataset.

Breaking down the data, women, on average, hold 27% of board seats at companies where BNP Paribas AM is a shareholder, an increase of 2% since 2021.

This compares to an average of 20% for companies in the ISS database, which is also 2% higher than it was in 2021.

The asset manager revealed that geographic differences are clear: Europe, South Africa and Australia are the most advanced in terms of board parity, although all regions are improving.

In the 12 months to the end of 2022, female board membership increased, quite markedly in some regions. The ISS universe and BNP Paribas AM investee companies increased by 2%.

The most notable changes were in Asia and Latin America, both rising to 14% from 12%, as well as in North America – up to 30% from 28% – and in Europe, up to 36% from 34%.

There were similar trends within the broader ISS universe, where the most significant increases came in South Africa – up to 32% from 28% – with Australia and New Zealand hitting 30% from 26%.

Nonetheless, national disparities remain.

Within Europe, the trend is positive in France, with an average of 44% of board members being women, compared to 40% in the ISS universe.  

Norway (40%) and Italy (41%) also stand out, compared to ISS averages of 40% and 38%, respectively.

But another study by Deloitte revealed that UK boardrooms lag behind European counterparts with only 30.1% of company seats held by women in the UK.

This places the UK ninth in a gender diversity table, behind France, Norway, Italy, Belgium, Sweden, Finland, New Zealand and South Africa.  

In North America, investee company female representation levels in Canada (33%) and the United States (30%) are substantially higher than for the ISS universe (27% and 23%, respectively), notably due to BNP Paribas AM’s strict voting policy. 

In contrast, investee company rates in Asia are generally lower, although Malaysia (28%), Singapore and India (both 19%) compare favourably with Hong Kong (16%), Japan (13%) and Indonesia (8%).

Rachel Crossley, head of stewardship for Europe at BNP Paribas Asset Management, said: “Investors have a crucial role to play in increasing female board representation, by both expressing their position through voting and intensifying dialogue with issuers.”

And she added: “Although regional differences remain, we are nonetheless very pleased with the progress that has been made, demonstrating greater consideration of diversity issues globally.”


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