Initiatives to Place Women on Corporate Boards of Directors

Posted by R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Friday July 27, 2012 at 9:09 am
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Editor’s Note: The following post comes to us from Douglas Branson, W. Edward Sell Chair in Law at the University of Pittsburgh.

In the paper, Initiatives to Place Women on Corporate Boards of Directors, forthcoming in the Australian Corporate & Securities Law Review, I investigate initiatives to place women on corporate boards. In the United States, the representation of women on corporate boards of directors has been flat for 6 years now. By contrast, elsewhere around the world the topic is a hot button issue. This includes Australia where the proportion of board seats held by women has suddenly jumped from 8% in 2010 to nearly 14% today. The Australian Stock Exchange (ASX) has adopted a “comply or explain” diversity disclosure requirement (for emphasis termed an “if not, why not” disclosure requirement), which emphasizes gender diversity. The requirement is even more stringent than the London Stock Exchange (LSX) comply or explain regulation adopted after the Lord Mervyn Davies Report on women in corporate governance appeared in February 2011. The Australian Institute of Company Directors also has instituted a mentoring/sponsorship program, the first of its kind in the world, designed to obtain board seats for women. This article reviews these Australian as well as global developments, including enactment of quota laws (especially Norway and France), certificate and pledge programs (“Rooney Rules”), and hard law disclosure requirements (United States).

As part of a study group which includes governance scholars from Norway, the UK, the U.S., Australia and New Zealand, we interview women company directors, along with company chairpersons and representatives of adjective organizations interested in the subject of diversity on corporate boards of directors. Examples of adjective organizations who have undertaken efforts to place women on corporate boards are, in the U.S., Catalyst, Inc., or Women Corporate Directors (WCD), or in Australia, the Institute of Company Directors (AICD) or the Australian Business Council (ABC). The expected outcome of our study group endeavor is to describe how various women actually have attained elevation to corporate boards and senior management positions, as opposed to the anecdotal and other non-empirical accounts which have dominated the literature to date.

In 2010, at the New South Wales State Library in Sydney, the group interviewed 16 women who serve as directors of publicly held companies, 5 company chairmen, and 4 representatives from adjective organizations. A subsidiary goal is to repeat the process in several countries, developing a comparative as well as empirical model of pathways for women to corporate board seats.

In this process, each of the group members reported on the progress that is occurring in her part of the world. For example, two leading experts, Dr. Susan Vinnicombe and Dr. Ruth Sealy, from the School of Management at Cranfield University, in the United Kingdom (UK), described what a headline issue women on corporate boards has become throughout much of the European Union. Agnes Bolso, Professor of Interdisciplinary Studies, from the University of Trondhiem, augmented our knowledge of what had occurred in Norway (the 2003 enactment of a quota law).

Revelations at the study group session lead to the realization that, while prior to 2010 promotion of women to board and senior management positions had become a dormant issue here in Australia, from at least 2002 the issue has received significant emphasis in Europe and around the Pacific Rim, gathering increased momentum in recent years. The European Union’s Justice Commissioner, Viviane Reding, has strongly urged a quota measure applicable to all 27 member states. Several EU member nations (Belgium, France, Italy, the Netherlands and Spain) have followed Norway, a non EU member, in adopting quotas laws, as have Iceland, Israel, Switzerland, and Malaysia, among non-member states. Impatience with the continued male dominance of seats on corporate boards is growing. The purpose of this article is to detail that added importance and emphasis, as well as to document responses to the glass ceiling, work/life and other issues that have impeded women’s progress toward board and management positions.

The full paper is available for download here.

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