Kuala Lumpur, 11 December 2019 – Deloitte Global’s sixth edition of Women in the Boardroom: A Global Perspective reports that women hold just 16.9 per cent of board seats globally, a 1.9 per cent increase from the report’s last edition published in 2017. The numbers underscore a now-familiar challenge: women are largely under-represented on corporate boards, and progress to change this trend continues to be slow.
“If the global trend continues at its current rate of an approximately 1 per cent increase of women on boards per year, we will be waiting more than 30 years to achieve global gender parity at the board level. Even then, actual parity is likely to be concentrated to the few countries that are currently making concerted efforts to overcome this issue, leaving several regions lagging behind,” says Sharon Thorne, Deloitte Global Board Chair.
“Our report throws into sharp relief the progress and lack of progress countries around the world are making to increase the gender diversity of their boardrooms. For example, some countries, particularly in Europe and Australia, are showing real momentum. Yet, others continue to have very low rates of women serving on their boards. While the global average posted a small uptick, only six countries in the world can claim an average above 30 per cent. These statistics illustrate an urgent need for organisations to take action to drive more positive and dramatic change.” says Dan Konigsburg, Senior Managing Director, Deloitte’s Global Center for Corporate Governance.
Studies have repeatedly shown that increasing diversity is not only the right thing to do for an organisation’s culture, it also leads to better business outcomes. Increased diversity leads to smarter decision-making, contributes to an organisation’s bottom line, and powers innovation, among other benefits.
“The benefits of diversity extend beyond the four walls of any single corporation. The trickle-down effect of women in the boardroom, such as breaking down stereotypes, encouraging girls and young women to pursue careers traditionally dominated by men, and breaking down the wage gap are all important steps along the way to greater economic opportunity for women and to more inclusive workforces and societies,” continues Konigsburg.
Yet barriers to gender diversity in the boardroom, and more broadly throughout the workplace, persist. Outdated workplace cultures, unconscious bias, and lack of sponsorship are just a few of the factors which prevent many women from reaching senior leadership roles. Women hold just 4.4 per cent of CEO positions globally. CFO positions are nearly three times more diverse, but women still hold just 12.7 per cent of these positions globally. Given that many board members are recruited from the executive level, this also contributes to a shortage of women in the boardroom.
“It is critical we take tangible, meaningful action now—or gender parity will remain an elusive goal rather than an enabler of inclusive economic growth,” Thorne added. “Based on our own experience, there are a number of actions that chairs, boards and executives can put in place today to accelerate progress. This includes setting the tone from the top—making gender parity a priority throughout the entire organisation and holding leadership accountable to make progress. I have seen firsthand that it’s possible to speed up the rate of change. Representation on Deloitte Global’s Board jumped to 30 per cent in 2019 from 16 per cent the previous year, following structural changes and a concerted effort to ensure some of our highly talented women were given the opportunity. While I’m immensely proud of this progress, I know we still need to do more to move the needle and demonstrate our commitment through concrete actions.”
Asia trails global trend in gender diversity
While gender diversity is improving across businesses in Asia, it trails behind the global trend. In Asia, women hold 9.3 per cent of board seats, a 1.5 per cent increase from 2016, albeit behind the trend of 16.9 per cent women in board seats worldwide. Women also fill 4.2 perc ent of board chair positions in Asia, a 1.6 per cent increase from 2016, but trails 5.3 per cent of board chair positions held by women globally.
“In Malaysia, certain biases are still prevalent in the organisations and one real example is the assumption that men and women have the same career trajectories and opportunities. In the past, women in Malaysia were expected to focus on their families, instead of being a member of the business community. Hence, when considering the talent pipeline, there is a higher fallout rate for women in business and the talent pool is generally skewed to men. We see some shifting of trends in the direction which supports women and we should work together to make sure women stay connected and contribute their unique talents to the business community” says Cheryl Khor, Operational Risk Leader, Deloitte Asia Pacific, Corporate Governance Leader, Deloitte Malaysia.
There are encouraging signs, however, that businesses in Asia value the benefits of having women on their boards. The average tenure of women as board members in Asia is 5.6 years, above the global average of 5.5 years. Women holding board chairs in Asia average a tenure of 8.0 years, compared to 5.4 years globally. The average age of women serving as board members and chairs in Asia are 57.0 and 57.1 respectively, on par with the global average of 57.0 years for board members and below the global average of 59.4 years for board chairs.
In Malaysia, the government has adopted a 30 per cent target for women in company leadership and decision-making positions in 2011, calling for 30 per cent representation of women on board by 2020.
“While the progress to hit 30 per cent is still ongoing amongst public-listed companies in Malaysia, it is great to see consistent efforts being made by the government through the Malaysian Code on Corporate Governance. We are hopeful that in a year, the majority of the women holding senior leadership or management roles will get to break the glass ceiling” says Khor.
Deloitte Global’s Women in the Boardroom report shares the latest statistics on global boardroom diversity, exploring the efforts of 66 countries to increase gender diversity in their boardrooms and features insights on the political, social, and legislative trends behind the numbers.
More key findings from the research include:
- Germany saw a 6.7 per cent increase which is likely linked to recent gender quota legislation passed in 2015.
- Finland saw a 7.2 per cent increase through corporate governance code recommendations and the encouragement of career development programs for women.
- Malaysia saw a 6.9 per cent increase after implementing a series of targets for women in leadership positions, as well as through corporate governance code recommendations.
- South Africa also saw a 6.9 per cent increase after implementing recommendations for listed companies to disclose targets for gender and race representation at the board level.
- Similarly, Australia, which saw a 5 per cent increase, has a recommendation that listed companies establish and disclose board diversity policies, as well as voluntary targets for gender representation on boards.
Boardroom diversity across the Americas rising slowly
Boardroom diversity in Australasia continues to rise
- Australasia has the highest boardroom gender diversity at 26.1 per cent.
To read the full report, please visit: www.deloitte.com/WOB6
