Gender representation on corporate boards of directors refers to the proportion of men and women who occupy board member positions. To measure gender diversity on corporate boards, studies often use the percentage of women holding corporate board seats and the percentage of companies with at least one woman on their board. Globally, men occupy more board seats than women. , women held 20.8% of the board seats on Russell 1000 companies (up from 17.9% in 2015).. Most percentages for gender representation on corporate boards refer only to public company boards. Private companies are not required to disclose information on their board of directors, so the data is less available.
The reasons behind the disproportionate gender ratio of directors is a subject of much debate. A survey of more than 4000 directors found that male directors over the age of 55 cited a lack of qualified female candidates as the main reason behind the stagnant number of female directors. In contrast, in the same study, female directors and younger male directors considered the male-dominated networking that often led to the appointment of directors to be the reason behind women's slow progress.
Given that gender diversity on boards is an issue rooted in the principle of equality of treatment, inequality in gender representation on boards can be combated through equality of opportunity reforms, equality of outcome reforms, or by spreading information on gender bias. Governments and corporations have attempted to address the disproportionality of gender representation on corporate boards through both types of reform measures, including legislation mandating gender quotas (a reform based on the principle of equality of outcome) and comply or explain guidelines (a reform based on the principle of equality of opportunity).
History
The Lettie Pate Whitehead Foundation asserts that Lettie Pate Whitehead was one of the first female directors of a prominent company. She was a member of the board of the Coca-Cola Company from 1934. A survey of Fortune 250 companies in 2012, however, found the first female director of the surveyed companies to be Clara Abbott, a director of Abbott Laboratories from 1900. The survey also found that the average first year of appointing a company's first female director was 1985. In 2001, Sarah Hogg, Viscountess Hailsham, became the first woman to chair a FTSE 100 company.
Katharine Graham, previously the chairwoman of the board of The Post Co., was the first female Fortune 500 CEO in 1972. Ursula Burns, the chairman and CEO of Xerox, was the first African American female CEO of a Fortune 500 company.
Rationale behind gender diversity on corporate boards The desire to achieve proportionate gender representation on corporate boards is derived from the principle of equality of treatment. Equality of treatment requires comparable situations to be treated in the same manner and prohibits direct and indirect discrimination. Equality of treatment refers to either equality of opportunity or equality of outcome. Equality of opportunity requires providing everyone with the same opportunity to attain what they desire. Equality of outcome requires every individual to possess an equal share of outcomes such as goods or positions.
The Convention on the Elimination of all Forms of Discrimination Against Women requires states that have ratified the convention to guarantee the exercise of human rights and fundamental freedoms to women on an equal basis to men. Further, achieving gender equality, including in economic decision-making processes, is one of the United Nations' Sustainable Development Goals.
Many countries have also opted to pursue this principle through their constitution or through various forms of legislation. For example, the Canadian Charter of Rights and Freedoms which guarantees equality rights, including gender equality, and the Equality Act 2010 in the United Kingdom which protects against discrimination based on sex. In the United States, Title VII of the Civil Rights Act of 1964 prohibits discrimination against employees on the basis of sex.
Determinants of gender diversity on corporate boards
A number of studies have been conducted to determine the type of companies that are more likely to have female directors on their boards. A study on Spanish small and medium-sized enterprises found that firm performance increases the probability of having a female director. The same study also found that higher corporate ownership and firm risk led to a lower probability of having a female presence on a company's board. A survey of UK companies found larger companies to be more likely to have a higher proportion of female directors. The findings regarding firm size and corporate risk are consistent with a study conducted on 1002 companies across Brazil, Russia, India, China, the UK and USA. Masayuki Morikawa conducted a study that focused on Japanese companies and found that the probability of having a female director increased for companies that are managed by the owners of the companies, but decreased for public companies and older companies.
Impact Numerous studies have been undertaken on the effects of gender diversity on company boards with mixed results. In exploring the relationship between female directors and firm performance, Corinne Post and Kris Byron argue that differences in cognitive functions and values between the genders should influence firm performance and a board's decision-making process. An academic article produced by Nguyen, et al., suggests that numerous studies have found improvements in firm performance influenced by female staff members on corporate boards. Females bring a number of “social, managerial, and leadership qualities,” (Nguyen, et al.) to the table that directly influence corporate governance practices, such as ethics, trustworthiness, and risk taking/aversions. Another study by Nada K. Kakabadse et al. suggest that a diverse board will expand the board access to resources and networks, either from the directors' personal connections or simply by being a symbol through their position as a female director. The theory that gender diversity on corporate boards is of value is further strengthened by a study of 127 Malaysian firms that found stock markets react in a positive manner to the appointment of female directors. An analysis of the effects of greater female representation in the boards of directors of Iraqi companies by Farhan and Nayan found a "positive and significant" relationship between female directors and firm performance, as measured by return on assets. The study's authors stated that the important policy implication of their findings is that companies on the Iraqi stock exchange and security commission should incorporate gender diversity in their corporate governance practices.
The study by Corinne Post and Kris Byron using results from 140 studies found that the presence of female directors on a corporate board has a positive correlation with accounting returns and monitoring and strategizing tasks. However, the study concluded that there is no significant relationship between female directors and market performance, possibly due to a variations in the female director/firm performance relationship between countries with different levels of gender equality. The relationship was found to be positive in those with more gender equality and negative in those with less gender equality. A study on nonfinancial Spanish small and medium-sized enterprises found a positive relationship between female directors and firm performance using return of assets as a measure of firm performance. Further, a survey of 6500 company boards revealed that an increase in participation by female directors reduces the firm's chances of becoming embroiled in corporate governance issues. A study of S&P 1500 companies by Maurice Levi, Kai Li and Feng Zhang found companies with female directors to be less likely to acquire other companies and to pay less bid premium if an acquisition occurs.
Another study, conducted by Gennaro Bernile, Vineet Bhagwat, and Scott Yonker in 2017, found that "board diversity [was] associated with lower realized firm risk." The study further noted that "both operating performance and asset valuation multiples increase with board diversity." In addition, firms with more diverse boards tended to pay higher dividends, pursue less risky financial policies, and invest more in research and development. The findings of this study were not exclusively positive, however. The study authors found that greater diversity was not always beneficial to firm performance when overall volatility was high. They posited that because diverse boards can endure longer decision-making processes, they can fail to respond rapidly when a quick decision is necessary.
Other studies have found no evidence of a positive relationship between gender diversity and firm performance. A study by Ian Gregory-Smith, Brian G.M. Main and Charles A. O'Reilly III on companies listed on the FTSE 350 found no significant relationship between having a female director and company performance as measured by shareholder return, return on assets, return on equity and price to book ratio. In an interview with 45 corporate insiders, Lissa Broome, John Conley and Kimberly Krawiec found that insiders have difficulty with isolating the particular manner in which female directors contribute solely on the basis of their gender. Further, in the context of emerging economies, the study on Malaysian firms found gender diversity to have a negative effect on firm value in government owned companies, suggesting that the relationship between female directors and firm value might vary across company types.
Another study on 30 companies with female directors in the United Kingdom, United States and Ghana found that having a minority female board representation does not affect board performance. This is in line with previous research based on 50 female directors that concluded at least 3 female directors is required to improve a company's corporate governance.
According to a 2019 study in The Review of Economic Studies, Norway's gender quota "had very little discernible impact on women in business beyond its direct effect on the women who made it into boardrooms." According to a 2019 study in the journal Electoral Studies, Norway's adoption of the gender quota did not have a spillover on politics. It did not lead to greater political representation among women. A 2025 study found that among nine European countries that adopted gender quotas on corporate boards over the period 2005-2021, "the female share of nonexecutive directors increased by 20 percentage points within 6 years after a quotas' adoption" but "women's representation among CEOs or other senior executives hardly changed."
Current landscape
Percentage of women holding corporate board seats As of March 2018, 27.1% of board seats of companies on the Australian S&P/ASX 200 index are held by women.
In Hong Kong and India women hold 10.2% and 9.5% of board seats of the Hang Seng Index and BSE 200 index respectively. Women in Japan hold 3.1% of board seats on companies in the TOPIX Core 30 Index.