Gender diversity is viewed as an important element within the social factor that comprises ESG investing, and companies are taking notice.
“Gender diversity is something that not only we care about, but we believe the world needs to care about. Increasingly, investors and regulators are focusing on this issue,” Eugene Klerk, head of global ESG research at Credit Suisse, told a media webinar this week.
The 2021 Gender 3000 report, published by Credit Suisse Research Institute, analyses the gender breakdown of 33,000 senior executives from over 3,000 companies across 46 countries, including more than 1,440 companies across 12 markets in Asia Pacific.
The key finding is that there has been an improvement in terms of female representation on company boards. The average share has steadily increased to 24% now, up from 15% in 2015.
Europe and North America are leading the change, while Japan and South Korea needs to catch up, Klerk said.
There are also considerable differences within Apac, with female board representation ranging from 33% in Australia/New Zealand – where disclosure requirements and an ESG focus are more akin to those in Europe and North America – to a lowly 9% in South Korea.
While there are improvements in all countries, Australia/New Zealand, Singapore and Malaysia are doing better. The progress in other major Asian economies (China, India, Japan and Korea) has been sluggish in comparison.
Among more than 400 companies in the China dataset, changes in boardroom diversity recorded a marginal improvement of 3 percentage points since 2015 to 13% in 2021, significantly below the global average.
In terms of female representation in CEO and CFO roles, the share of women remains low, particularly in Japan.
However, the number of female CEOs globally has increased by 27% though they still only account for 5.5% of the total. The number of CFOs who are women has increased by 17% and now account for 16% of all CFO positions globally.
It is worth noting that mainland China has a relatively high female representation in CFO roles, at about 24%, said Klerk.
Companies that have a broader or a higher share of women in management tend to be more profitable. The corelation has also been seen in terms of share price returns: companies with a higher proportion of women in management have historically generated a higher share price return, noted Klerk.
The study finds this still holds true, with 200 basis points of alpha generated by those companies displaying gender diversity above the average compared with those below.