Women held less than one-fifth of board seats globally in 2021, up almost 3% since the last report in 2018, putting them on pace to take more than two decades to reach near parity with men in 2045, according to a Deloitte survey, Women in the boardroom: A global perspective.
The share of women in top corporate leadership positions is ticking up but remains relatively rare, with the percentage of boards chaired by women standing at 6.7%, the percentage of female CEOs at 5.0% and the percentage of women CFOs, often viewed as the number two C-suite spot, at 15.7%, the report found.
“Anecdotally, what we understand from most boards that we work with is that their first preference is a sitting or former CEO and the second preference is a sitting or former CFO,” said Dan Konigsburg, leader of Deloitte’s Global Boardroom Program. But boards focused on increasing gender diversity need to cast a wider net given that the still small pool of women in C-suites unnecessarily narrows the search, he said.
While corporate leaders are under increasing pressure to implement diversity, equity and inclusion (DEI) programs, progress in the U.S. toward boosting the number of women on corporate boards still puts them in the middle of the pack.
The percentage of women on corporate boards in the U.S. stood at 23.9%, lagging the European region’s performance at 30.7%, but besting the Middle East and North Africa where the share stood at 10.2%, the study found. However, larger U.S. public companies did have significantly more women on their boards, with the percentage of board seats held by women at Fortune 500 and the New York Stock Exchange companies standing at 26.5% and 30.4%, respectively.
Board diversity can help the bottom line, with studies showing companies with diverse boards are more successful at moving into new markets and achieving higher profits. A 2019 McKinsey study found diverse companies 21% more profitable, with cash flows 2.3 times higher and 70% more likely to capture new markets.
But the progress is coming with a carrot and stick approach, the study found, with mandated quotas putting more women in board seats in some countries. As of October 2020, seven EU countries had national gender quotas for listed companies, with France posting the highest percentage of women on boards at 43%.
In the U.S. a growing number of states have developed their own mandates but there’s been pushback on gender equity. Seventeen states have supported a lawsuit challenging Securities and Exchange Commission (SEC) approval of a NASDAQ rule that requires race and gender diversity on boards.
One of the biggest barriers has been entrenched cultural attitudes of boards, which are shifting. “CEOs often selected their own boards and wanted to see other CEOs on them as they often saw their boards as a kind of trophy,” Konigsburg told CFO Dive. “That has for the most part gone away and most boards have gone to a fiduciary style of board, meaning they're looking for board members who can provide oversight,” which benefits women.
The study published this month was based on a dataset that covered 10,493 companies in 51 countries.