(Bloomberg) -- Female representation in the boardroom almost tripled since 2010, with the most gender-diverse companies delivering higher shareholder returns compared to male-dominated boards, according to Bloomberg Intelligence.
Women made up 26% of boards in 2023, up from 9% in 2010, highlighting how regulations in Europe, US and Asia that compel change are impacting global corporations, a Bloomberg Intelligence report released Monday showed.
The top 20% of companies for female board membership returned 2% to 5% more than the bottom 20% in developed markets, the report said. In emerging markets, they were 2%-6% less volatile than their diversity laggards, according to the research.
“Whether you believe that diversity is a moral imperative or not, at the end of the day, the higher performance linked to higher diversity shows it has a financial and business case,” Bloomberg Intelligence’s Chief ESG Strategist Adeline Diab said on Bloomberg TV. “This should bolster D&I programs.”
Global exchanges from Hong Kong to the European Union to Japan have all placed requirements on companies to diversify their boards between now and 2030. Even in the US, where there’s growing backlash against diversity practices from conservative politicians and lawyers, companies are under pressure to add more women.
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The average share of women on boards on the S&P 500 hovers at around 35%, data compiled by Bloomberg show. It exceeds 40% in some European countries with diversity quotas, the data show.
Still, gains in the boardroom remain less evident in the top job; women make up less than 10% of chief executive officers in the S&P 500, data compiled by Bloomberg show. Globally, women are most well-represented in chief financial officer roles, though men still outnumber them by five times, Bloomberg Intelligence found.
The report forecasts women to reach boardroom parity in Western markets before the next decade. However, there’s a risk that the same women will be asked to serve on too many boards, which is happening in Asia and is a growing concern in the US and Europe, the report found.
The biggest headwind remains the growing backlash against diversity, equity and inclusion programs, which US President-Elect Donald Trump has pledged to curtail as he creates a cabinet hostile to diversity initiatives. At the same time, social media pressure is prompting companies to backtrack even without government action, the report said.
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