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April 20, 2004
Women Directors Rare Even in Developed Economies, According to First Global Study
    by William Baue

A UK-based socially responsible investment research firm study of companies in global developed economies finds only seven percent of board seats occupied by women.

In what it believes to be the first global study of women directors, Ethical Investment Research Services (EIRIS), a UK-based socially responsible investment (SRI) research firm, reports that women make up only seven percent of directors in developed countries. The study, which follows up on last year's version focusing only on Europe, examines 1817 companies in 24 countries with developed economies in the FTSE All World Developed Index.

"Women remain heavily under-represented in the boardroom in all developed countries, despite their substantial labor force participation rate," said Jeremy Baskin, head of research at EIRIS.

Almost half (46.6 percent) of the companies studied have no women on their boards, and less than a quarter (23.1 percent) have more than one woman on their boards, according to the study.

"At the top end of the scale, Norwegian company boards still comprise only one-fifth women," said Mr. Baskin.

Norway topped the list, with 21.1 percent board representation of women, with its Scandinavian neighbors Sweden and Denmark following at 16.9 and 12.8 percent, respectively. Finland placed seventh, with 10.5 percent of its companies having women on their boards. EIRIS attributes this leading performance to the fact that senior politicians in Norway and Sweden have threatened to legislate quotas for the number of women on corporate boards if companies did not bring the numbers up voluntarily.

North American companies comprised the next cluster of top performers, as the US placed fourth with 12.8 percent of its leading companies having women on their boards, and its neighbor Canada placed sixth at 10.6 percent.

Countries from down under made up the third cluster at the top of the list, with New Zealand placing fifth at 10.9 percent and Australia coming in eighth with 9.4 percent.

At the other end of the scale, Japan placed last, with 0.4 percent women directors.

"The figures suggest Japanese companies are, generally, not seeing women in leadership as a business issue," said Mr. Baskin.

Southern European countries also emerged at the bottom on the list, with Spain (3.8 percent), Italy (2.6), and Portugal (0.8) bringing up the rear guard.

The findings, which are based on ongoing and regularly updated research conducted by EIRIS for its clients, take into consideration both full-time, executive directors and part-time, non-executive directors, as women are more likely to fall into the latter category. Isolating the former category for examination shrinks the percentage of women directors even lower.

EIRIS maintains that it does not promote any one particular view on SRI.

"It is unclear whether the figures reflect opportunities companies may be missing by limiting the diversity of their boards," said Mr. Baskin.

Others are less coy about correlating board diversity to financial opportunity.

Connecticut State Treasurer Denise Nappier, a vocal proponent of board diversity, cites research from Oklahoma State University, the University of Delaware, and Florida A&M correlating corporate market value with board and upper-management diversity.

"It has been shown that added diversity and independence helps a company's bottom line, and increasing diversity in the boardroom to better reflect a company's workforce, customers, and community is ultimately in the best interest of shareholders and our economy," Ms. Nappier said.

In late 2002, Ms. Nappier, who is the principal fiduciary of the $20 billion Connecticut Retirement Plans and Trust Funds (CRPTF), launched the Board Diversity Initiative, which promotes diversity of corporate boards, including increasing percentage of women.


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