SMI(M) Board of Directors Study 2023 | Excerpt

Russell Reynolds has again conducted an annual comprehensive board study, which analyses Switzerland’s SMI and SMIM companies. The findings can be viewed below

Changes in the SMI and SMIM since last year's study

On SMI, Credit Suisse was replaced by Kuehne+Nagel in June, SGS already last year by Sonova. Development of the SMI and SMIM index compositions since last year’s study.

Russell Reynolds Associates’ study covers executive committees of 47 Swiss companies (Lindt & Sprüngli, Roche & Schindler represented twice in indices).

^{* Roche is represented in both indices with different types of shares. Lindt & Sprüngli and Schindler are represented with two types of shares on SMIM, resulting in 30 SMIM stocks but only 28 companies.}

SMI: Share of women among newly elected directors

Despite only a marginal increase, the share of women on SMI BoD reaches a new all-time high. For the third year the share of women among newly elected directors is higher than 50%.*

^{(From 2018 including all executive directors elected to the BoD by Annual General Meetings * Changes in index composition (i.e., Credit Suisse exit) negatively impacts the otherwise positive development of the share of women)}

Average share of women on Boards of Directors of major European stock indices

The share of women on SMI and DAX has only slightly increased since last year. SMI takes last place in a comparison of major European indices.

^{Sources: Own research for Germany and Switzerland; Other countries: European Institute for Gender Equality (eige.europa.eu)}

Share of women board members per company

All SMI boards have reached the mandated 30% share of women, except for Credit Suisse replacement Kuehne+Nagel (95% of boards; PY: 80%).

SMI: Newly elected women

Ten newly elected women in 2023: 50% are Swiss nationals (PY: 14%). Swiss companies seem to find more female directors in country.

Gender representation among chairs and committee chairs

Gender representation among chairs and committee chairs remains mostly unchanged. The number of female deputy chairs increased by 85%.

^{* Data from before AGMs 2023}

SMIM: Share of women on boards of directors

For the first time, SMIM overtakes SMI with regards to share of women on boards of directors. 36% of directors are female.

SMI & SMIM: Proportion of women on boards of directors by industry

IT and Financials have the highest share of female directors and together with Industrials show the biggest increase. Consumer Staples has the lowest and Consumer Discretionary a decreasing share of women.

Share of companies with more than 30% female directors

All but one SMI companies have reached the target of 30% female directors. Despite positive developments of several companies, the overall development on SMIM has slowed down significantly.

SMI: Share of women in Sr. management and total workforce and share of women on BoD and EC**

Women continue to be significantly under-represented in Sr. management and Executive Committee positions when measured against total female workforce.

^{* Arithmetic average of the 16 companies for which such numbers were available from their annual reports
** “True” average of all companies in index from this and last years’ studies}

SMI: Share of women in Sr. management over total and share of women on EC over Sr management

There is a strong correlation between share of women in Sr. management vs. total in workforce. The correlation between share of women on ECs vs. Sr. management is weaker. Women are promoted to management positions but less likely to the EC.

SMI companies with committees for Sustainability* and SMI: Number of companies with director and/or committee

Less than half of SMI companies have committees explicitly tasked with ESG.

^{* SGS left the index; Credit Suisse not included}

SMI: Number of companies with compensation link to ESG and Approximate share of total compensation linked to ESG targets (at 100% target achievement)

All but one SMI companies have now tied a portion of executive remuneration to ESG KPIs (on average 6%).

Share of boards with digital expertise: Switzerland vs. Germany

The SMI has lost significant ground compared to DAX 40 with regards to digital expertise on BoD. In Switzerland, 60% of companies can rely on such expertise, in Germany almost 80%.

SMI: Number and share of current directors by region and 2023 newly elected

The share of newly elected women from Switzerland has increased significantly, for men it has decreased. Overall, the share of Swiss nationals increased YoY.

^{This assessment and evaluation is based on publicly available biographical data* of SMI and SMIM board of director members. The effectiveness of supervisory boards also depends on the board culture, the personalities of their members and their constructive dialogue, which cannot be assessed from an outside perspective.”}

Our team