Shareholders, Regulators Increase Impetus to Change
The S&P Global article, “Shareholders, Regulators Increase Impetus to Change," quoted Russell Reynolds Associates Consultant
Jennifer Rockwood on female representation on corporate boards. The article is excerpted below.
Governments and regulators are increasingly watchful of companies that are lagging in female representation on corporate boards. Norway imposed a 40% quota on boards of listed companies more than a decade ago. A number of other European countries, including France, Italy, and Germany, have followed suit with varying quotas, some with more teeth than others. California imposed something similar in 2018. And gender pay gap disclosure in the UK, which started in 2018, has shed light on the issue of gender disparity in leadership positions, prompting some companies to address it.
Investors are also playing a role. State Street Global Advisors, one of the world’s largest asset managers, in 2017 threatened to vote against the full slate of board members for companies with all-male boards. Another large money manager, BlackRock, has said in proxy voting guidelines that it would expect to see at least two women directors on boards. The New York State Common Retirement Fund is among large pension funds warning of votes against directors on boards that lack diversity.
Even as many CEOs strive to diversify because they think it’s the right thing to do, “I don’t think you can extricate the fact that there are a lot of these external pressures, and truly commercial pressures to be mindful of this and purposeful about this,” said Jennifer Rockwood, global power and utilities practice leader for recruiting firm Russell Reynolds.
That was particularly true for publicly traded companies, she said. Meanwhile, companies that sell directly to individuals may be more vulnerable to consumer reactions or social media campaigns.
To read the full article, click here.