Equity, Diversity and Inclusion

The boardroom still has a gender gap: Here’s what it looks like - and how to fix it

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Female leadership is increasing, but the gender gap still needs to be closed. Image: Unsplash/Keren Levand

Iman Ghosh
Author, Visual Capitalist
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  • While the number of women on boards is rising across the globe, the rate of increase has slowed for three of the past four years.
  • 30% female representation on corporate directors boards is considered a crucial goal on the road to gender equality.
  • Europe continues to have the highest representation of women on boards and there has been a global increase in women taking on CFO roles.
an infographic showing the rise of women on corporate boards
The number of female leaders grows every year, but more representation is still needed for women. Image: MSCI ESG Research LLC

The rise of women on boards of directors worldwide

Women’s representation in the boardroom is a mixed bag. The number of women on boards is rising across the globe—but the rate of increase has slowed for three of the past four years.

Based on MSCI research of All Country World Index (ACWI) constituent companies, the graphic above reveals a 10-year trend of women’s representation on corporate boards, and projects three future scenarios on the way to parity.

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ESG goals: the path to parity

The ESG ecosystem considers 30% representation to be a critical milestone on the road to reaching gender parity on corporate boards of directors.

Following a small uptick in 2019—and two years of slowed growth from 2017 to 2018—the rise of women on boards slowed again in 2020, gaining 0.6 percentage points (p.p.).

Based on different forward-looking scenarios, here’s how long it could take to reach equal representation:

a chart showing how long it could take for women to reach equal representation based on different scenarios
In a 'business-as-usual' scenario, it's likely to take 9 years for women to reach 30% representation on boards. Image: MSCI ESG Research LLC as of Oct. 30, 2020.

On the whole, parity on corporate boards could be reached as early as 2039 or as late as 2070.

Women’s representation: state of the unions

MSCI research reveals trends that highlight significant traction. In 2020, fewer women became directors, but all-male boards continued to decline worldwide to 17% in 2020 (a 2 p.p. drop) among the ACWI contingent.

This trend is partially driven by emerging markets, where all-male boards dropped to 31%, from over 34% initially. Hong Kong is one of the few places that actually experienced an increase of 5 p.p. in all-male boards. In contrast, Saudi Arabia’s share reduced by 8 p.p. to 86% in 2020.

Europe continues to lead the world in gender representation on boards. All top 10 countries with three or more women directors are found in the region, with countries like Norway, Italy, and Belgium being the closest to reaching parity.

Across sectors, utilities experienced the largest increase in companies with three or more women on boards, with a 9% jump between 2019-2020.

The other glass ceiling: the C-Suite

The number of women CEOs remains low across all regions, but CFO roles show more promise.

a chart showing the representation of women in CEO roles and CFO roles
There is currently more representation of women in CFO roles due to emerging market companies. Image: MSCI ESG Research LLC as of Oct. 30, 2020.

This global rise is also largely thanks to emerging markets. Since 2017, emerging market companies have exhibited higher percentages of CFOs than companies in developed markets, and the difference is widening.

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The glass ceiling isn’t unbreakable

As MSCI reports, the progress towards parity in boardrooms does not necessarily represent the workplace. Emerging research suggests that women have been more negatively impacted by the pandemic’s economic fallout—potentially undoing several years’ worth of improvements.

However, developing nations still show promising results in key indicators of gender diversity, with further opportunity to grow corporate bottom lines.

As more post-pandemic recovery data becomes available amidst vaccine rollouts, we’ll gain a better sense of whether we’re still on track to follow these long-term trends.

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