The new Credit Suisse Gender 3000 report covering the shifting “gender profile of senior executives and boardrooms across global industries” reveals improved gender diversity.
The report outlines the gender breakdown of 33,000 senior executives from over 3,000 companies across 46 countries. What makes the research stand out is that it looks at executive positions and not just the boardroom as a metric to inform gender diversity improvements.
Credit Suisse Gender 3000 report – gender at board level
In terms of increased female representation on company boards between 2015 and 2021, this has increased by 8.9% globally. Europe and the US lead the global average by region with 34.4% and 28.6% of women on boards. This is followed by the Asia Pacific (APAC) region at 17.3% and Latin America at 12.7%.
In Europe, France is the leader in terms of the numbers of board-level female directors at 45%.
According to the report, improved female representation at board level by region “tends to reflect the prevalence of ESG investing but also where policy pressure has been the greatest.”
The APAC region has considerable divergences where female board representation is concerned and ranged from 34% in Australia and New Zealand “where disclosure requirements and an ESG focus are perhaps more akin to those in Europe and North America” to only 9% in South Korea.
While the report referenced the positive progress made in female board representation in Malaysia and Singapore, it noted the “sluggish” progress in other major Asian economies, including China, India, Japan, and Korea.
Gender diversity in senior management teams
The report also looked at the level of gender diversity in management teams (C-suite roles), which was defined by the report as “the number of female executives as a proportion of all executives in our Gender 3000 database”, which has improved from 17.6% in their 2019 report to 19.9% in 2021.
While Europe and the US once again lead the way and have the largest share of women in management roles, the gap between these two regions and the rest of the world is far less than at the board level at only one percentage point.
Female CEOs have increased globally by 27%, although they still only account for 5.5% of the total. Europe has the highest percentage of women as CEOs at 6.7% and has seen the largest increase since 2019, while the US stands at 5.6%.
The number of female CFOs has increased by 17%, where women account for 16% of all CFO positions globally. Women are particularly well represented in the APAC region. They are approaching a quarter of CFOs, which is well ahead of Europe and the USA.
Gender diversity and superior corporate performance
Previous Gender 3000 reports found a correlation between greater gender diversity in companies and corporate and share price outperformance, also known as a “diversity premium.” The new study finds this still to be true with “200 basis points of alpha generated by those companies displaying gender diversity above the average vs those below.”
Furthermore, ESG scores are superior within these firms where the latest report highlights that the best-performing companies display “superior diversity in both the boardroom and the C-Suite.”
This year’s report dove deeper beyond the “male versus female lens” to examine companies in terms of “broader diversity and inclusion policies related to gender and sexual identities,” including LGBT+ inclusiveness.
From this, they found that companies with a greater focus on gender and diversity “more broadly” tend to perform better concerning their environmental and governance policies.
These findings show that investors “seeking to maximise returns should focus on companies that put both women and diversity more broadly at the heart of their corporate strategy.”
Gender diversity in entrepreneurship
The report found that female representation in entrepreneurship has improved over the past five years, with the ratio of female-to-male-founded start-ups rising from 0.62 to 0.73.
They also found that female-founded businesses are generally smaller than male-founded businesses with lower revenue and lower valuation. Among the top 100 unicorns globally, none is founded by a female-only team.
While assets under management devoted to “gender lens investing” have increased to USD 10 billion as of Q1 2021, clearly, more can be done to improve the representation of women in entrepreneurship.
Lydie Hudson, CEO of Sustainability, Research & Investment Solutions at Credit Suisse, said: “Diversity and inclusion are at the heart of the ESG focus among investors and policymakers, specifically shaping expectations as to what good governance looks like.
“This research outlines the important correlation between diversity and corporate performance. As a global business, we have always been committed to diversity of people and thought, and to see such empirical evidence of its benefit is encouraging. However, as the report highlights, we know there is still work to be done. Studies like Gender 3000 are an excellent temperature check to see where we are and how far we still have to go for equitable progress.”
Richard Kersley, Head of Global Thematic Research at Credit Suisse, said: “It is heartening to see a continued increase in boardroom diversity being represented in our latest Gender 3000 report reflecting the positive correlation between gender diversity and corporate outperformance.
“However, as we have always maintained throughout the life of our studies, we do not assert cause and effect in our analysis and only point to the observable and enduring correlation. Although we know for sure gender diversity within management and the boardroom is increasing globally, there is still plenty of room for improvement, particularly in emerging and notable Asian countries. This year, we also delved into the lens of LGBT inclusiveness and found shareholders are becoming increasingly engaged with the topic of diversity more broadly.”
