Paul Hastings Study of Major Global Exchanges Reveals Few Address Gender or Diversity in Listing Requirements or Corporate Governance Codes
Washington, DC – The world’s largest stock and securities exchanges have significant room for improvement in their approach to diversity, particularly gender diversity, for listed companies, according to “
The study, which is a supplement to the full report, “
“Exchanges can play an important role in advancing women’s representation on corporate boards because they are in a position to incent companies to examine their own diversity policies and initiatives, and increase the importance of such issues to shareholders,” said
Other key findings of the study include:
The major exchanges in Australia, New Zealand, and Hong Kong have made the most tangible progress. These exchanges all require listed companies to disclose information on board gender composition and their efforts to encourage gender diversity.
Australia’s reporting recommendations and enhanced disclosure for corporate boards’ gender composition have been effective in expanding the diversity profile of Australian Securities Exchange-listed companies.
While Europe continues to be a leader in public and private initiatives to increase gender parity on corporate boards, only a few European stock exchanges have diversity-related requirements provisions for listed companies. However, the European Commission has proposed significant legislation for EU Member States that would require large companies to disclose nonfinancial and diversity-related information in annual reports and to increase women’s presence on corporate boards of certain listed companies to 40% by 2020.
In the United States, the Securities and Exchange Commission rules require companies to disclose if and how they consider diversity when searching for a new board member. However the disclosure rule has not apparently had any measurable effect, as women remain greatly underrepresented on corporate boards of US listed companies. The New York Stock Exchange and Nasdaq stock exchanges have taken little action to address the lack of diversity on boards of listed companies.
Paul Hastings has been working independently, as well as collaborating with various organizations, to spark an informed dialogue on best practices, raise awareness, and help enact positive change around the issue of gender parity. In 2011, the firm launched “
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