The number of women on boards has increased by 8% since 2021, according to a study of thousands of companies by BNP Paribas Asset Management.

Women hold on average 27% of board seats at companies in which BNP Paribas AM invests, up from 25% in 2021.

This is higher than the average of 20% female board membership for companies in the Institutional Shareholder Services database, a figure which is also up from 18% versus in 2021, pointing to a wider trend for more women on boards.

Improving gender diversity is a major focus of BNP Paribas AM’s voting and engagement policy. This year, BNPP AM is increasing its minimum threshold for women on boards by 5%. 

The fund manager’s voting policy will oppose the election of all-male directors at AGMs in all markets in 2023.  It has also set a threshold of 40% female board membership at all investee companies by 2025.

Female boards globally

Geographic differences in equal gender representation on boards remain marked despite improvements, the study found.

Europe, South Africa and Australia are the most advanced in terms of board gender parity, although all regions are improving.

The study compared more than 3,000 companies in which BNPP AM invests with around 17,800 listed companies included in the Institutional Shareholder Services database. The data is as at the end of December 2022.

Within BNPP AM’s portfolios, the most notable changes were in Asia and Latin America, both rising from 12% to 14% female board membership, as well as in North America (up from 28% to 30%) and in Europe (up from 34% to 36%).

There were similar trends within the broader ISS universe, where the most significant increases were in South Africa (up from 28% to 32%) and Australia and New Zealand (up from 26% to 30%).

In contrast, investee company rates of women on board in Asia are generally lower, although Malaysia (28%), Singapore and India (both 19%) compare favourably with Hong Kong (16%), Japan (13%) and Indonesia (8%).

Michael Herskovich, global head of stewardship at BNP Paribas Asset Management, said: “Investors have a crucial role to play in increasing female board representation, by both expressing their position through voting and intensifying dialogue with issuers.

“Similarly, the existence, or absence, of legally-imposed quotas, as we have recently seen in Europe, also impacts the growth of female board membership.”

The European Union directive adopted in November 2022 requires all large companies listed on EU stock exchanges to take measures to increase the presence of women in leadership roles and at board level by July 2026.

Since 2019, BNPP AM has applied specific voting criteria on gender diversity regarding the election of directors at AGMs.  

In Europe, North America, Australia, South Africa and New Zealand, BNPP AM now requires a minimum level of female board membership of 35% (up from 30% in 2022).  Currently 43% of investee companies meet this requirement.

In Latin America, Asia, the Middle East and Africa (excluding South Africa), BNPP AM now requires a minimum level of 20% (up from 15% in 2022).  Currently 27% of investee companies meet this requirement.

Women in tech leadership

Technology leadership roles are particularly lacking female representation, according to separate research.

Women made up just 27% of chief information officers (CIO) at FTSE 100 companies in 2022, according to a study by Frank Recruitment Group.

Progress on closing the gender gap is also slow. This figure is only 10% higher than it was in 2018, the study found.

Between 2018 and 2022, just 42 women held CIO positions at FTSE 100 companies, compared to 138 men. Women also held the role for a shorter period.

While the overall average tenure for a CIO was found to be three years, the average was three years for a male CIO but just two years for a female CIO.

Only four women had a tenure of five or more years, compared to 37 men.

During the data collection process, the study looked at hundreds of companies, but only 15 had women as CIOs in 2022. These included AstraZeneca, HSBC, Intertek. 

CIOs are responsible for managing a company’s IT systems and functions. They also make executive decisions, implement policies, and enable new business models. 

The lack of women in this senior leadership position is despite companies led by female decision-makers outperforming their peers.

Female-led profits

Out of the top 500 companies, above average profits were reported at almost 90% of those led by women last year, according to another study, beating those run by men.

While 78% of male-run firms achieved outsized profits, that figure rose to 87% at those businesses with a female lead, Revolent, a cloud computing company, found.

Various studies including the Harvard Business Review (HBR), have found women attain higher scores for most leadership skills compared to their male counterparts. 

They are more resilient, inspiring, honest, proactive, and results-driven than men, HBR found. Additionally, they practise self-improvement and enjoy helping others in their pursuits.  

Providing mentorship opportunities for women, rethinking hiring processes and supporting women with leadership potential with training programmes are all ways to improve diversity in leadership roles, the studies found.