gender diversity
Women on the boards and in management of listed companies: an international comparison
Since 2011, the year in which the Golfo-Mosca law was introduced, increasing attention has been paid to the question of gender diversity. This law stipulates that the less-represented gender be at least one-third of the members of the board of directors. The article by Valerio De Molli, Marco Visani and Beatrice Tarabelli.
Since 2011, the year in which the Golfo-Mosca law was introduced, increasing attention has been paid to the question of gender diversity.
This law, for years at the center of the corporate governance debate, stipulates that the less-represented gender be at least one-third of the members of the board of directors.
The European House – Ambrosetti Observatory on Corporate Governance has analyzed the effects of this law on FTSE MIB companies, that is, those companies with higher capitalization, for the period 2009-2018.
What emerges from this analysis is a trend of constant increase in the presence of women on BoDs, which in 2018 reached 37.8%. In addition, taking into account the recent increase in the share of the less-represented gender from one-third to two-fifths as provided for in the 2020 Budget Law, a further improvement can reasonably be expected.
Figure 1. 2009-2018 trend in Female Presence on BoDs in the FTSE MIB segment.
Source: The European House – Ambrosetti elaboration based on company data.
In light of the positive trend seen, The European House – Ambrosetti has prepared an international comparison of the main stock exchange indices of a number of leading countries: FTSE MIB (Italy), CaC40 (France), DAX30 (Germany), IBEX35 (Spain), FTSE 100 (United Kingdom) and S&P500 (United States). The analysis involved companies with total capitalization of over €35,000 billion.
The comparison involved three areas of analysis:
- percentage of women on the board of directors
- percentage of women compared to total number of employees
- percentage of women in management
Figure 2. International comparison of female presence on BoDs, in the workforce and in management (average % vs. total members, 2018).
Source: The European House – Ambrosetti elaboration based on Bloomberg data.
In terms of the percentage of women on BoDs, in 2018 Italy was in second place (37.8%), after France (44.6%).
However, it should be noted that in France, a law has been in effect since 2011 that requires a 40% female presence on BoDs.
In terms of the percentage of women to total employees, the segments analyzed are roughly in line with each other.
However, the FTSE MIB (35.6%) is below the international average (38.0%), despite the fact that it includes a number of companies such as Amplifon, Moncler and Salvatore Ferragamo which have very high percentages (in 2018, respectively, 71.5%, 70.5% and 67.6%).
The presence of women in management is much lower, however.
Specifically, the FTSE MIB ranks last with a differential of about 13 percentage points compared with the no. 1 on the list (S&P500 with 30.9%). Among FTSE MIB companies, the number of cases with percentages above the international average are limited: Campari and Moncler, for example, have a percentage of women managers of 45% and 42%, respectively.
Although the recent efforts of the Italian legislators have been concentrated on the percentage of women on boards, the FTSE MIB is already one of the top performers on an international level.
On the other hand, clear gaps emerge involving the other aspects analyzed, in particular regarding the percentage of women in management.
For this, actions could involve two aspects: on one had meritocracy and, on the other, the development of corporate measures regarding work-life balance. Therefore, on one side, companies should promote a culture of meritocracy by reinforcing the introduction of formal succession plans and performance assessment systems developed using objective goals and instruments. On the other, despite the fact that many companies have already implemented a number of measures to balance family and work and permit flexible working, in many cases clear obstacles to ambitious career paths are still evident, which complicate the attainment of executive roles.
In this regard, as yet, few companies promote support and mentoring activities focused on career paths, in particular involving the transition from management to executive positions.
By Valerio De Molli (CEO of The European House – Ambrosetti), Marco Visani (Governance & Executive Compensation Manager of The European House – Ambrosetti) and Beatrice Tarabelli (Analyst)
Valerio De Molli
Managing Partner and Chief Executive Officer,
The European House - Ambrosetti