Thursday, August 26, 2010

The gender gap: Investors aim to boost number of women on corporate boards

Corporations around the world should increase the number of women on boards of directors, according to a coalition of global investors managing more than $73 billion (US) in assets, including Canada’s Vancity Investment Management and Bâtirente, who recently issued a joint press release on the topic.

In 2009, GovernanceMetrics International looked at 4,200 global companies, and found that only 9% of directors on corporate boards were women. Canada was slightly better than the average, at 11.3%. Norway led the way at 36%, thanks to laws that require a minimum number of directors from each gender.

“These findings have led a number of mainstream investors to identify gender balance and diversity as a strategic issue in their investment activity", VanCity and Bâtirente said in the press release. “The investors in this new coalition have asked 54 selected companies from across the business spectrum for greater clarity about gender balance within their organizations.”

“We think that companies with diversity on boards, in terms of both gender and experience, are better long term investments, says François Meloche, Extrafinancial Risks Manager, Bâtirente. “There is a correlation between financial performance and board diversity.”

Dermot Foley, Strategic Analyst, Vancity Investment Management, says the problem goes beyond boards of directors, noting that there are no female CEOs in the top 60 publicly-traded companies in Canada. ”A diversity of perspectives on the board and in management leads to better decision-making and improves the quality of governance.”

The coalition members are all signatories to the UNPRI, and this initiative is a response to the Women’s Empowerment Principles recently developed by the United Nations Development Fund for Women and the United Nations Global Compact.

“This engagement shows that gender balance within senior corporate management is not just a social issue but also a shareholder issue”, says UNPRI executive director James Gifford. "In an increasingly complex global marketplace, companies that effectively attract, hire, retain, and promote women are often better equipped to capitalize on competitive opportunities than those who do not.”

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