The sixth edition of Deloitte’s Women in the boardroom – A global perspective report was published recently.
The report shares the latest statistics on global boardroom diversity, covering 66 countries. It looks at how companies are trying to improve gender diversity, and the political, social, and legislative trends that sit behind the findings.
What does the report tell us about firms’ efforts to reach gender parity? And what can your board do to ensure it drives and supports your own diversity targets?
- A global picture of boardroom diversity
The report shows that, although some progress is being made, it is still too slow:
- Women are still largely under-represented on corporate boards globally, occupying just 16.9% of board seats worldwide
- Although this is a 1.9% increase from the previous report, an article in Harvard Business Review notes that if progress continues at this rate, it will take more than three decades to achieve gender parity in the boardroom
- Globally, women hold only 5.3% of board chair positions and 4.4% of CEO roles
- When it comes to CFO roles, women are slightly better represented; 12.7% of CFO roles globally are held by women – nearly three times the number of CEO positions
What should your board be doing?
Reporting on the Deloitte findings, Harvard Business Review stated that gender parity in the boardroom won’t happen on its own. The board itself plays a crucial role here.
And there’s significant potential reward for success. Deloitte’s report notes that:
‘increasing diversity is not only the right thing to do for an organization’s culture, it also leads to better business outcomes. Increased diversity leads to smarter decision-making, contributes to an organization’s bottom line, and powers innovation, among other benefits.’
The HBR article believes that ‘it will take concerted efforts to address the cultural barriers that prevent many women from reaching senior leadership roles and the boardroom’.
Among these barriers, it identifies:
- Inconsistent efforts across countries. While there is no ‘one size fits all’ solution to improving gender diversity, there are some consistencies among countries that are doing better here. Gender quotas, target-setting and a focus driven by corporate governance requirements have all been seen to improve gender diversity. Conversely, countries with no targets or quotas are lagging behind.
- A lack of women in senior leadership roles. There are few women in the senior leadership positions that typically take places on the board; an increase in the number of women in these roles will consequently increase the number of women on boards.
Linked to this, organisations with women in these leadership positions tend to appoint more women to the board – evidence, perhaps, of a virtuous circle of diversity.
How can boards respond?
With the board playing a central role here, what should you do to tackle the obstacles to greater gender diversity?
A report in December last year showed that diversity in leading UK companies was ‘flatlining’. How can your board be part of the solution, not part of the problem?
- Don’t make excuses for your lack of diversity. Are you using one of the top 10 reasons firms give for having no women on the board?
- …Although make sure you’re not appointing women for symbolic value
- Don’t make it difficult for women to reach the top positions in your organisation. Find out how women can overcome the barriers to becoming CEO
Of course, diversity doesn’t just apply to the boardroom. The Deloitte report notes that: ‘Any initiative to address diversity in the boardroom must go hand in hand with efforts to address diversity more broadly throughout an organization’.
And of course, even if you move towards greater gender diversity, this isn’t the only challenge when it comes to running an efficient board that makes informed decisions and sets business-winning strategy.
You need to ensure your meetings have a clear purpose. They need to be chaired effectively for key areas to be adequately discussed and business-critical decisions made. Your governance and reporting need to be up to scratch.
Growing numbers of boards are approaching the need for information by introducing a board portal approach to their papers and member information. If this is something you are interested in learning more about, you can download a copy of our Board Portal FAQs.
They answer some of the most commonly-asked questions about portals and the way they can help boards to become more efficient and effective.
Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.
How can we help!