That women have to face barriers while progressing in their careers is no secret. And that the highest glass ceiling hasn’t been shattered yet was proven in November 2016. During the same time, Deloitte analyzed data from over thousands of companies and came up with the Deloitte Global’s Women in the Boardroom: A Global Perspective, which was published recently. Although, in absolute numbers, the picture looks dismal; there are unshakable signs of progress, no matter how sluggish.
What is the report?
On behalf of Deloitte Global, MSCI ESG Research Inc collected data about boardroom diversity from about 7,000 companies in 44 countries. The report is currently in its fifth edition, and the last one was published in 2015. The data collection was completed by December 15, 2016. In addition to giving the global picture, the report also delves into how individual nations have fared, based on local factors. For the Indian perspective, 132 organizations were included in the report.
What are the results?
- 15% of all board seats globally are taken by women, a rise of 3% from the 12% in 2015. However, only 4% of the global board chairs were women.
- Asia-Pacific region fared poorly, with the average gender diversity at top leadership roles at merely 7.8%. This was only higher than the Latin and South America region, which stood at 7.2%. 2.6% of the board chairs were women.
- Japan (4.1%) and South Korea (2.5%) were placed significantly lower than the region and world average, whereas Vietnam (17.6%) and Malaysia (13.7%) were the bright spots in the region.
- An organization with a female chair has almost double the number (29%) of women appointed to boards compared to the number of women on boards led by a male chair (16%). Similarly, companies with a woman CEO have female boardroom representation at 29%, as compared to 15% of those with male CEOs.
- Europe fares better than the world average (22.6%), with Norway, the first country to implement a gender quota in boardrooms, having 42% female boardroom representation. However, some parameters like women board chairs have fallen in a few countries, like Italy.
- Dan Konigsburg, senior managing director of Deloitte’s Global Centre for Corporate Governance has been quoted saying, “Organizations with women in the top leadership positions have almost double the number of board seats held by women. The inverse is true as well, with gender diverse boards more likely to appoint a female CEO and board chair... This illustrates an important trend — as the number of female CEOs and board chairs climbs, it is likely to spur greater board diversity. Yet, the percentage of women securing top leadership roles remains very low, with women holding only 4% of CEO and board chair positions globally.”
How did India score?
- India remains below the global average, with number of women on boards at 12.4%. However, this has increased 4.7% from 7.7% in the last two years.
- 3.2% (an increase of 0.5% from 2014) of the board chairs were women.
- The report says that these increases are due to the revision of the Companies Act, which makes at least one woman director on the boards mandatory and the amendment by SEBI to include a similar provision.
- The top industries with the maximum percentage of women on boards are: Technology, Media and Telecommunications (16%), Consumer Business (15%), Life Sciences & Health Care (15%), Manufacturing (11%) and Energy & Resources (10%).
- However, the efficacy of these quotas has been raised in the report as well. "Although there are concerns that companies will comply by appointing female relatives of incumbent board members, some companies with progressive outlooks were already appointing women directors to their boards before the law was enacted," the study says.
Bottom-line
Similar studies of the past have corroborated the findings of this report. No doubt, progress, and development is taking place, but the pace of the same is glacially slow. In India, specifically, the change is getting the right support from the government, industry and corporate leaders. However, one needs to ensure that the progress happens on the ground and in spirit, not just on paper.
Abhay Gupte, Partner, Deloitte India, rightly sums up in the report, “Gender diversity on corporate boards is a popular topic in both academic and business publications. In recent years, insights from various studies indicate an encouraging correlation between women in leadership positions and corporate performance. Gender-balanced boards are better at managing risks and offer varied perspectives to problem-solving. Such boards increase their ability to question the norm and inspire innovation. In India, both the regulator and industry are driving this change. Although it is easier said than done, I think it is the time we stop providing the cause and effect and address gender diversity with an open mind.”