Executive Summary


Women account for nearly 50% of the world’s population1 and approximately 40% of the global workforce.2  However, women are consistently underrepresented on corporate boards of directors across the globe. Though many countries have made great strides in promoting women’s rights with respect to combating discrimination and representation in public office, women’s equal representation on corporate boards remains elusive, with some shining exceptions. 

France, for instance, is a European Member State that has had the most dramatic increase since legislation was enacted in 2011 to address this issue.   A year before the law was enacted the proportion of women serving on corporate boards in France’s top 40 largest listed companies was 15%. In 2018, that number has significantly increased to 42%.3 

The United Kingdom saw similar progress, with the percentage of female-held directorships at the top 100 companies increasing from 10.5% in 2005 to 27.7% in 2017.4  There are some potentially encouraging signs that this issue is becoming more visible in the United States as well.  The ushering in of the Women’s March globally and the #MeToo movement is bringing gender equality to the forefront of many conversations and making headlines.  Already, in the first five months of 2018, women are gaining more seats on boards – with women making up 31% of new board directors at the top 3,000 publicly traded companies in the U.S.5  

The Link between Diversity and Performance

The business case for diverse boards has also been more firmly established.  There are several empirical studies establishing a correlation – not causation – between diversity and corporate performance.

A 2018 report by McKinsey & Company “reaffirms the global relevance of the link between diversity—defined as a greater proportion of women and a more mixed ethnic and cultural composition in the leadership of large companies—and company financial outperformance.”6  The analysis draws on a dataset of more than 1,000 companies covering 12 countries and found that companies in the top quartile for gender diversity on their executive teams were 21% more likely to experience above-average profitability than companies in the fourth quartile.7 

Morgan Stanley published similar findings in its 2016 report, concluding that companies with more diverse gender populations (both inside and outside of the boardroom) tend to perform better.  The report was based on a proprietary gender-diversity framework that ranked more than 1,000 stocks globally.

8According to the report, “[h]igh gender diversity companies have delivered slightly better returns, with lower volatility, compared with their low diversity or sector peers, and they have moderately outperformed on average in the past five years.”9  Further, “[t]he top fifth of selected companies that consistently rank gender diversity among their priorities, with data to back it up, outperformed their peers based on volatility and risk factors.”10 

It should be noted that while some research has found that diverse boards have a positive impact on a company’s financial performance, other reports have not.The differing results depend in part on how financial performance is defined and what methodologies are used.11  Aside from financial performance, however, research identifies a number of other business benefits to board diversity, including better understanding of consumer preferences, a stronger mix of leadership skills, and improved risk management.12  According to recent reporting, other firms are demanding greater representation in the boardroom in the wake of sexual harassment scandals.13  

Getting to the Root of the Issue

In the United States, studies have looked at the root causes of underrepresentation of women in the boardroom.  The U.S. Government Accountability Office (GAO) – the nonpartisan agency often called the “congressional watchdog” – found that several factors hinder increases in women’s representation, including “boards not prioritizing diversity in recruitment efforts; lower representation of women in the traditional pipeline for board positions; and low turnover of board seats.”14  

The corporate pipeline problem was also identified in a study entitled “Women in the Workplace” (the “WiW Study”), a comprehensive study of the state of women in corporate America conducted by a partnership of McKinsey & Company and LeanIn.Org.15  The objective of the WiW Study is to “give organizations the information they need to promote women’s leadership and foster gender equality.”16  The WiW Study surveyed 222 companies in the United States that employ over 12 million people.More than 70,000 employees completed the survey which focused on their experiences regarding gender, opportunity, career, and work-life issues.17  According to the WiW Study, “Women remain significantly underrepresented in the corporate pipeline.  From the outset, fewer women than men are hired at the entry level, despite women comprising 57 percent of recent college graduates.18  At every subsequent step, the representation of women further declines, and women of color face an even more dramatic drop-off at senior levels.  As a result, one in five C-suite leaders is a woman, and fewer than one in 30 is a woman of color.”19  The WiW Study concludes that, “Until we treat gender diversity, and diversity more broadly, like the business imperative it is, true progress will be hard to achieve.”20

Institutional Investors Lead the Way

The notion that including women and diversity among the top ranks of companies is good for business is so widely recognized that institutional investors are leading the way:

These movements are having an impact in the political and business arenas.  More countries are creating government-led and -funded initiatives to evaluate the disparity between genders.  In the UK, for example, Business Minister Lord Davies commissioned a report in 2010 that not only provided insights into the gender imbalance on boards, but provided actionable solutions and goals for companies to do better, including a target of at least 25% female representation by 2015 at the top 100 companies on the Financial Times Stock Exchange.26  A review five years later, conducted by the Cranfield School of Management in cooperation with the UK Government, found that the FTSE 100 had exceeded the 25% goal and raised the voluntary target for FTSE 350 companies to 33% female representation within five  years.27

Other initiatives range from studying the problem and addressing so-called traditional areas of gender inequality like pay gaps, such as in France, to recommending voluntary gender diversity policies, such as in Japan, to helping implement mandatory quotas, such as in Norway. 

While legislative bodies play a large part in creating such policies in the private sector, other public and private institutions are also playing a large role.  Many countries’ public exchanges are requiring the adoption of diversity policies and mandating companies “comply or explain” why they have failed to comply. 

The Australian Securities Exchange (ASX) has done just that—and seen the total percentage of board of director seats allotted to women increase, with over 50% of board positions appointed in 2018 belonging to women.28  Additionally, corporate codes that govern businesses are increasingly issuing guidelines that encourage companies to adopt gender-based diversity policies.  Even such non-mandatory measures seem to have an effect on companies’ policies, as evidenced by Kenya which has had a non-binding code provision since 200229. The country now boasts one of the highest percentages of female representation on boards of directors on the African continent. 

There are three primary methods that countries employ to increase the percentage of female members on boards of directors: (i) mandatory, government-applied quotas; (ii) stock exchanges encouraging in, and requiring disclosure by, listed companies of diversity policies and, often, requiring that targets are set and measured against; and (iii) corporate governance codes or other private organizations that set voluntary standards.

In certain countries, such as the United States, private non-government organizations have taken up the mantle and pushed for policies to address this issue, with results being seen at the state and municipal levels.  While virtually all are non-mandatory and aspirational, one state legislature (California) has recently passed quota legislation and sent it to the Governor to sign.30 At the local government level, New York City and Philadelphia each have taken steps to increase diversity disclosures by city contractors.31  The New York City Comptroller and New York City’s pension funds launched a Boardroom Accountability Project designed to enhance public disclosure reporting. The initial phase, which began in 2014, included pressing companies to make “‘proxy access’ – the right of large, long-term shareholders to nominate corporate board candidates on a company’s ballot – a market standard.”32 When the project began, just six U.S. companies allowed proxy access. Today that number has increased to more than 524. 

Further, in 2017, the Board Accountability Project 2.0 launched and included an initiative to ask 151 companies to disclose the race, gender, and skills of their board members, as well as their process for adding or replacing board members.33  The results of the project were announced in June 2018: 35 of the targeted companies now disclose information on racial and gender diversity and 49 of the companies have chosen 59 new directors who are women or minorities.34  In launching the program, New York City Comptroller Scott M. Stringer said, “We’re doubling down and demanding companies embrace accountability and transparency.”35  

Mandatory Quotas

Mandatory quotas are currently more prevalent in Europe than any other region.  Certain of the countries studied for this report—such as Belgium, France, Germany, Italy, the Netherlands, and Norway—utilize them.  Norway, one of the  early adopters of quotas in 2003,  also has one of the most stringent penalties attached to non-compliance: a company can face dissolution if it fails to comply with the quota requirement.36  Though strict, the impact has been tremendous. In 2018, 40.5% of public company boards of directors’ seats belong to women.  This increase is nearly 35 percentage points higher from the year prior to the law’s enactment. 

Belgium, France, Germany, and Italy all adopted quotas nearly a decade later.   The penalties for non-compliance range from nullification of any non-compliant appointment of a director to monetary penalties.  No countries in East Asia currently have mandatory, government-set quotas in place. (Malaysia has set a quota of 30% but it is not mandatory37.)

In Africa, Kenya mandates a quota for state-owned enterprises.  In the Middle East, Israel has had a quota mandate in place since 1999, where public companies were required to appoint a director of the opposite sex if all directors were of one sex.38 

Though quotas are not as prevalent in the Americas (of the countries analyzed in this report, only Panama has some type of mandatory quota39), legislation has been introduced in Brazil40 and is gaining momentum.

In the United States, while federal legislative efforts have stalled, states are increasingly playing a role in encouraging gender diversity on boards of directors.  Illinois and Massachusetts’ state legislatures have introduced measures designed to promote diversity41 and California’s state legislature has passed legislation that would require all California-headquartered public companies to have at least one woman director by the end of 2019. 42 The bill is on the Governor’s desk to sign as of the date of this report.  And cities such as  Philadelphia have taken steps to increase diversity by requiring contractors who do business with the city to disclose certain demographic information including the gender and race of those serving as board members and executive staff.43

Exchange-Encouraged Diversity Programs

Public stock exchanges have been another key driver of the increase in gender diversity in the corporate boardroom.  Both Australia and New Zealand boast relatively high percentages of women on boards and neither country has adopted mandatory quotas.  Both the Australian and New Zealand stock exchanges, the ASX and NZX respectively, have adopted diversity policies and encourage companies to have a written diversity policy. Listed companies are required to explain how they have complied with the diversity recommendations or otherwise explain why they have failed to do so. So far, Australia is leading the way with 28.5% of board seats held by women at Australian Securities Exchange (ASX) 200 companies,44 as compared to 19% for New Zealand Stock Exchange companies.45 

Where countries in Asia have adopted widespread board diversity recommendations they have largely done so through exchanges.  Hong Kong and Malaysia’s exchanges have both adopted diversity requirements, with Malaysia even requiring a diversity policy for companies to be able to list publicly on the exchange.46  Women now comprise 14.6% of public company board seats in Malaysia. Hong Kong has seen less success, with only 1.06% of the board seats on all listed companies belonging to women47 (but among the top 51 blue chip companies in Hong Kong that figure is 13.8%)48

Other exchange programs are less direct.  For example, Mexico’s exchange, BMV, created a “sustainability index,” one factor of which is the percentage of women on a company’s board of directors.49  Singapore’s exchange promulgates a Code of Corporate Governance, which provides that gender diversity be included as a factor to be considered in a board’s composition.50

Private Organization and Other Voluntary Standards

The most prevalent, and least stringent, method of encouraging gender diversity on boards of directors is voluntary standards established by primarily non-governmental, non-regulatory bodies.  This method can be found in some form for most countries surveyed in this report.

African countries have embraced the concept of voluntary standards. In Egypt, Morocco, and Nigeria, a corporate governance code  encourages gender diversity. Morocco’s code, directing companies to consider gender diversity in evaluating potential board members, employs a “comply or explain” requirement.  In Morocco, only 7% of directors at companies listed on the Casablanca Stock Exchange were women.51 

*           *           *

Our report outlines the measures adopted in 41 jurisdictions.  As you will see, the methods employed often involve a combination of approaches  to foster gender equality in boards of directors.  Different regions have made strides using different techniques, and we hope that this report helps highlight some of the progress made and spark conversation about ways the gap can continue to close in the future. 

While this report is intended to examine gender diversity on corporate boards, we also consider whether, and in what ways, countries have addressed the broader issue of diversity beyond gender. In some countries, there has been little if any consideration. In others, diversity writ large is a focus.  Both Austria and Belgium, for example, have developed voluntary diversity charters that companies can sign to make commitments to diversity, including having a diversity plan or promoting diversity principles.

The Bottom Line

Board diversity, and gender diversity more specifically, continues to garner attention across many countries, and in some countries has been made a priority both in the private sector and in governments.  Given the seismic social changes over the past year or so – #MeToo and more – the next five years will be pivotal in determining whether further significant progress is achieved.

Tara Giunta, Partner
Paul Hastings (Washington, DC)

Christine Cedar, Associate
Assistant Editor
Paul Hastings (Washington, DC)

Quinn Dang, Associate
Assistant Editor
Paul Hastings (Washington, DC)

Talya R. Hutchison, Associate
Assistant Editor
Paul Hastings (Washington, DC)

1 Population, female (% of total), World Bank, https://data.worldbank.org/indicator/SP.POP.TOTL.FE.ZS (last visited Aug. 16, 2018).

2 Labor force, female (% of total labor force), World Bank, https://data.worldbank.org/indicator/SL.TLF.TOTL.FE.ZS (last visited Sept. 16, 2018).

3 Women in the boardroom: A global perspective, Deloitte 52 (2017), https://www2.deloitte.com/content/dam/Deloitte/za/Documents/technology-media-telecommunications/za_Wome_in_the_boardroom_a_global_perspective_fifth_edition.pdf.

4 The Female FTSE Board Report 2017, Cranfield Univ. Sch. of Mgmt. (2017),   https://www.cranfield.ac.uk/som/expertise/changing-world-of-work/gender-and-leadership/female-ftse-index.

5 Vanessa Fuhrmans, Women on Track to Gain Record Number of Board Seats, Wall St. J. (June 21, 2018), https://www.wsj.com/articles/women-on-track-to-gain-record-number-of-board-seats-1529573401..

6 Delivering through Diversity, McKinsey & Co. (Jan. 2018), https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Organization/Our%20Insights/Delivering%20through%20diversity/Delivering-through-diversity_full-report.ashx.

7 Id.

8 Why It Pays to Invest in Gender Diversity, Morgan Stanley (May 11, 2016), http://www.morganstanley.com/ideas/gender-diversity-investment-framework; see also An Investor’s Guide to Gender Diversity, Morgan Stanley (Jan. 17, 2017), https://www.morganstanley.com/ideas/gender-diversity-investor-guide.

9 Id.

10 Id.

11 U.S. Gov’t Accountability Office, GAO-16-30, Corporate Boards: Strategies to Address Representation of Women Include Federal Disclosure Requirements 5 (Dec. 2015), https://www.gao.gov/assets/680/674008.pdf (hereinafter “GAO Report”).

12 Investors letter to companies–2017, Thirty Percent Coalition (Oct. 4, 2017), https://www.30percentcoalition.org/simplepagemenu/thirty-percent-coalition-investors-letter-to-companies-2017.

13 Fuhrmans, supra note 5.

14 GAO Report, supra note 11,at 13.

15 Women in the Workplace, McKinsey & Co. & Lean In (2017), https://womenintheworkplace.com/Women_in_the_Workplace_2017.pdf.

16 Id at 1.

17 Id.

18 Id.

19 Id.

20 Id. at 31.

21 The Parity Portfolio Strategy, Matterhorn Grp. atMorgan Stanley, https://fa.morganstanley.com/matterhorn/mediahandler/media/147218/Parity%20Fact%20Sheet%20022015.pdf; see also Gender Lens Investing: Q&A with Eve Ellis, Financial Advisor and Portfolio Manager in The Matterhorn Group at Morgan Stanley, US | SIF (Nov 3, 2016), https://www.ussif.org/article_content.asp?edition=1&section=5&article=7.

22 Press Release, State Street Corp., State Street Global Advisors Launches Gender Diversity ETF to Help Investors Seek a Return on Gender Diversity (Mar. 7, 2016), https://newsroom.statestreet.com/press-release/corporate/state-street-global-advisors-launches-gender-diversity-etf-help-investors-se.

23 See SHE:US, Bloomberg, https://www.bloomberg.com/quote/SHE:US (last visited Aug. 16, 2018).

24 Corporate Board Diversity: Gaining Traction Through Investor Stewardship, Bus. Law Today (Jul. 16, 2018), https://businesslawtoday.org/2018/07/corporate-board-diversity-gaining-traction-investor-stewardship/.

25Press Release, Office of the N.Y. State Comptroller, DiNapoli: State Pension Fund Will Vote Against Board Members at Corporations with no Women Directors (Mar. 21, 2018), https://www.osc.state.ny.us/press/releases/mar18/032118.htm.

26 Independent Review into Women on Boards, Dep’t for Bus., Innovation, & Skills 1 (Feb. 2011), https://www.gov.uk/government/news/women-on-boards.

27 Influencing national policy on gender diversity on top corporate boards, Cranfield Univ. Sch. of Mgmt., https://www.cranfield.ac.uk/som/case-studies/women-on-boards-ftse-research (last visited Aug. 27, 2018).

28 Australian Institute of Company Directors, http://aicd.companydirectors.com.au/advocacy/board-diversity/statistics.

29 The Capital Markets Act (Cap. 485a), Code of Corporate Governance Practices for Public Listed Companies in Kenya (2015), https://www.kenya-airways.com/uploadedFiles/Content/About_Us/Investor_Information/Code%20of%20Corporate%20Governance%20Practices%20for%20Issuers%20of%20Securities%20to%20the%20Public%202015%20-%20Code-8.pdf.

30 See S.B. 826, 2017-2018 Sess. (Cal. 2018), https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB826.

31 Philadelphia Mun. Code § 17-104, as amended by B. 130457 (2013), https://phila.legistar.com/LegislationDetail.aspx?ID=1432999&GUID=0DB3C132-E00B-46D1-B7D5-6C96FEE35D3F; New York City Local Law No. 44 (2016), http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=2240496&GUID=43C2F69D-B671-4363-917F-3F8265961E93.

32 Comptroller Stringer, NYC Pension Funds Launch National Boardroom Accountability Project Campaign — Version 2.0, City of New York Boardroom Accountability Project, https://comptroller.nyc.gov/services/financial-matters/boardroom-accountability-project/boardroom-accountability-project-2-0/ (last visited Sept. 13, 2018).

33 Id.

34 Press Release, Comptroller Stringer, NYC Funds: Unprecedented Disclosure of Corporate Boardroom Diversity Following Groundbreaking Campaign, (June 27, 2018), https://comptroller.nyc.gov/newsroom/comptroller-stringer-nyc-funds-unprecedented-disclosure-of-corporate-boardroom-diversity-following-groundbreaking-campaign/.

35 Press Release, New York City Comptroller Scott M. Stringer, Comptroller Stringer, NYC Pension Funds Launch National Boardroom Accountability Project Campaign — Version 2.0 (Sept. 8, 2017), https://comptroller.nyc.gov/newsroom/press-releases/comptroller-stringer-nyc-pension-funds-launch-national-boardroom-accountability-project-campaign-version-2-0/.

36 Public Limited Liability Companies Act (Nor.), https://www.oslobors.no/ob_eng/obnewsletter/download/20fd77664bccdf3f6b8cb0dc95eeb7bb/file/file/Norwegian%20Public%20Limited%20Liability%20Companies%20Act.pdf.

37 See Towards Achieving at Least 30 Percent Participation of Women at Decision Making Levels in Malaysia, UNDP (Nov. 2006), http://www.undp.org/content/dam/malaysia/docs/WomenE/GenderProDocs/Towards%20Achieving%20At%20Least%2030%20Per%20Cent%20Participation%20of%20Women%20at%20Decision%20Making%20Levels%20in%20Malaysia.pdf.  

38 Deloitte, supra note 3, citingGovernment Companies Law, Sec. 18A.

39 See Law 56 of July 11, 2017 (Pan.).

40 See Bill No. 112 (2010).

41 H.R. Res. 439, 99th Gen. Assemb., Reg. Sess. (Ill. 2015); S. Res. 1007, 189th Gen. Ct. (Mass. 2015). 

42 S.B. 826, 2017-2018 Sess. (Cal. 2018), https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB826.

43 Philadelphia Mun. Code § 17-104, as amended by B. 130457 (2013), https://phila.legistar.com/LegislationDetail.aspx?ID=1432999&GUID=0DB3C132-E00B-46D1-B7D5-6C96FEE35D3F; New York City Local Law No. 44 (2016), http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=2240496&GUID=43C2F69D-B671-4363-917F-3F8265961E93.

<44/sup> Australian Institute of Company Directors, supra note 29.

45 Gender Diversity Statistics, NZX (Jan. 2018), https://s3-ap-southeast-2.amazonaws.com/nzx-prod-c84t3un4/comfy/cms/files/files/000/003/158/original/Gender_diversity_statistics_as_at_31_December_2017.pdf.

46 Bursa Malaysia Main Market Listing Requirements: Chapter 16.11(1)(a), http://www.bursamalaysia.com/misc/system/assets/5001/MAIN_Chap16_CIS_9Apr18.pdf (last visited Aug. 23, 2018).

47 Distribution of female directors per HK-listed company, Webb-Site, https://webb-site.com/dbpub/FDirsPerListcoHKdstn.asp?d=2018-03-30 (last visited Mar. 30, 2018).

48 Sophie Hui, Women still struggle for boardroom space, The Standard (Mar. 7, 2018), http://www.thestandard.com.hk/section-news.php?id=193483&sid=4.

Social Responsibility, Grupo BMV, https://www.bmv.com.mx/en/Grupo_BMV/Mercado_responsabilidad_social#.VbjCo_mqpBc (last visited Mar. 23, 2018).

50 The Diversity Scorecard 2016: Building Diversity in Asia Pacific Boardrooms, Korn Ferry Institute 32 (2016), https://www.kornferry.com/institute/korn-ferry-diversity-scorecard-2016-building-diversity-in-asia-pacific-boardrooms.

51 Deloitte, supra note 3, at 39.