French companies lead the way on gender diversity
Luxury brand Kering and hospitality group Sodexo have majority of women board members
France’s ambitious moves to increase gender diversity among its top companies is paying off as it leads the way over the number of women on boards at European corporates.
The largest listed French companies have an average of 44 per cent of women on their boards, topping the inaugural European diversity index with the highest number on the continent.
Nine groups listed on the Paris CAC 40 exchange have a majority of women or an equal number of females on their boards, according to research by European Women on Boards (EWOB) and data provider Ethics & Boards.
French luxury brand Kering and hospitality company Sodexo have a majority female board of directors and nine other groups have reached parity.
This has helped Paris hit its target of a quota of 40 per cent of females on boards for companies listed on the CAC 40 by 2017. France has also proposed a requirement that companies narrow their gender pay gap or face fines.
However, despite the progress in non-executive roles, there has been criticism about the failure of senior women to break through in top executive positions.
In the UK, the latest review found that the number of female chief executives had fallen from 15 to 12 over the past year. There was also scant improvement in the top non-executive role of chair.
The number of female chairs in the FTSE 350 had only risen from 17 to 22, according to the Hampton-Alexander women on boards review, which was published earlier this month.
Still, the research from EWOB and Ethics & Boards was encouraging.
They published the rankings of the 200 largest European listed companies from the Stoxx 600 on Wednesday. It covers EWOB’s nine member countries — Belgium, Czech Republic, Finland, France, Germany, Italy, the Netherlands, Spain and the UK.
Overall, 11 companies in the index have reached board gender parity: Accor, Axa, Bouygues, Diageo, Kering, Legrand, Publicis Group, Sodexo, Terna, Total and Vivendi. Nine are French-listed, the others are British and Italian.
“Diversity is really part of sustainable growth,” said Monique Lempereur, chairwoman of EWOB and managing director of Continental Carbon Company Europe, in an interview with the Financial Times.
Based on data compiled by Ethics & Boards, EWOB has used its index to issue awards to recognise diversity on the board and within the leadership team of the various companies.
Sodexo won the award for the most diverse board that is chaired by a woman. Sophie Bellon leads a board of seven women and six men.
The award is “very powerful recognition” of the company’s efforts to promote diversity said Ms Bellon.
The prize for the board with the highest per cent of women went to Kering, owner of Gucci, Alexander McQueen and other brands, with 60 per cent female directors.
A few years ago Kering appointed a majority of women to the board in an effort to lead on gender parity by setting an example at the top, said François-Henri Pinault, chief executive and chairman of Kering.
British-based pharmaceutical group GSK won the prize for a company led by a woman with the most diverse board. Emma Walmsley is chief executive and GSK’s board is 46 per cent women.
An increasing body of research suggests that more diverse boards improve decision making and financial returns.
Over the past decade countries brought in a patchwork of targets, voluntary initiatives and quotas. Norway led the way with France, Italy, Germany and Belgium among the countries establishing legal quotas. Others such as Denmark, Netherlands, and the UK have opted for softer, more voluntary regimes.
Last month California became the first US state to require public companies to have a female board member. Beyond government, big investors such as BlackRock and Japan’s Government Pension Investment Fund, or GPIF, have also begun to champion the cause.
There is debate about whether a binding quota or voluntary target is more effective. However, Therese Murphy from the European Institute for Gender Equality, said the “disparity (between member states) shows it is difficult to effect change without positive action, which can come in the form of legal measures, such as quotas, or voluntary company initiatives”.
In the UK, the voluntary target succeeded — the 100 largest British listed companies had 26.1 per cent women on their boards by 2015, more than the 25 per cent target and they are on track to achieve the 2020 ambition of 33 per cent.
However, EWOB’s Ms Lempereur said: “As soon as you go to (smaller) companies that do not have quotas . . . the percentage of women in board positions is significantly lower and we see the same as well at the executive committee.”
The UK’s smaller FTSE 350 have a rate of 26.7 per cent and 75 companies appear to have stopped efforts after appointing one female non-executive — a so-called one and done
Increasing diversity in the leadership and senior management team requires organisational change and takes time to deliver results, but female non-executive directors can set an example.
“If women see a woman at the top, they can expect they will have their fair chance to progress,” said Ms Lempereur. “If there are only white men, they may think twice about joining that company.”