Rose-Coloured Glasses On

    This week, just as every year around International Women’s Day, the news is overflowing with reminders that gender equality is, alas, still but a distant dream. I find myself reaching for my rose-coloured glasses instead. After all, nobody likes a Debbie Downer, especially in these war-torn Corona-convalescent times of ours. And to be honest, there’s been progress, however patchy and frustratingly slow it may seem. Luckily for those of us who tend to find solace in numbers, advancement in this area is measurable. Unlike many other aspects of the elusive ‘S’ in ESG, gender equality is relatively easy[1] to track. Evidence is piling up, courtesy of those steadily improving reporting standards and mandatory requirements.

    Take, for instance, the average percentage of women on corporate boards. It feels like yesterday we were all outraged by the dismal representation number of 13.7% quoted in the European Commission’s impact assessment report of 2012. Yes, the findings that first sparked the need for policy action to close the gender gap in corporate management boards were released exactly a decade ago. The only outlier at that point was Norway, boasting some awe-inspiring 42%. Easy to explain, though, as the Nordic country had pioneered a mandatory 40% quota in 2008.

    A lot has happened since. The average for the EU has moved up to around 30%. Yet the quota debate is still very much alive and kicking. Earlier this year, European Commission President Ursula von der Leyen announced that she would make a new push at boosting women’s representation on companies’ boards, trying to unblock the legislation which has been stuck since releasing those disappointing numbers back in 2012.

    Meanwhile, some countries have already chosen to follow in Norway’s footsteps, while others have opted for self-regulation through public disclosure on gender diversity. This begs, of course, for a comparative study of what works and what doesn’t. I’m sure academia is on it, but I’ll offer you my laywoman’s digest.

    There is certainly evidence that quotas do the job. France, an early adopter of the policy, has currently the strongest female representation in the boardrooms of the biggest listed companies, as much as 45%. However, it is worth noting that nearly 40% of board seats at the UK’s top 100 companies are now filled by women, too. No quotas required.

    Naming and shaming would appear to be just as efficient a strategy, according to Denise Wilson, Chief Executive of the FTSE Women Leaders Review. Routinely and openly publishing data about companies that fall short of suggested gender-balance targets is a persuasive argument for businesses to appoint female board directors. And so are the growing expectations on diversity from investors and other stakeholders.

    Well, the UK is no longer part of the family, so perhaps von der Leyen and her colleagues are not too keen on the comparison. Though, neither is Norway, come to think of it. However, the latest statistics for EU member Sweden, another country that has rejected the quota model so far, provides more evidence. For large companies, the proportion of women on boards in Sweden climbed up to 39.2% in 2021, according to the Corporate Governance Board. And we are not talking about ‘token’ board members either. Sweden’s AP2 Female Representation Index for 2021 shows that out of 339 companies in their survey, 271 have at least 25% women on the board (79.9%). Make a note, by the way, that I’m quoting two independent data sources here, both reliable. And they are not the only ones tracking the numbers in Sweden. Transparency and disclosure rule!

    Don’t get me wrong, I am far from complacent. I know that women on boards are no panacea for the gender gap, and true parity is still years away, even in this tiny elite club. The point is we are moving forward. Change is happening, whether forced by regulators or nudged by the public’s watchful eye. It looks good, sisters, at least through the pink shades I’m wearing today.

    Happy International Women’s Day!


    [1] Admittedly, much of the existing research analyses gender in a binary way and there are challenges faced by people of nonbinary and other gender identities in the workplace.

    Image courtesy of Mabel Amber on Pixabay
    Julia Axelsson, CAIA
    Julia Axelsson, CAIA
    Julia has accumulated experience in asset management for more than 20 years in Stockholm and Beijing, in portfolio management, asset allocation, fund selection and risk management. In December 2020, she completed a program in Sustainability Studies at the University of Linköping. Julia speaks Mandarin, Bulgarian, Hindi, Russian, Swedish, Urdu and English. She holds a Master in Indology from Sofia University and has completed studies in Economics at both Stockholm University and Stockholm School of Economics.

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