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.
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
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.
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
"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.
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.