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CS Gender 3000 report shows one fifth of board positions globally now held by women

The Credit Suisse Research Institute (CSRI) today releases its third CS Gender 3000 report, ‘The CS Gender 3000 in 2019: The changing face of companies’. The report:
• shows that female representation on boards globally has doubled in a decade
• proportion of women in management is higher in US and APAC (excluding Japan) than in Europe
• reaffirms findings from previous iterations: that a material correlation exists between companies with a higher participation of women in decision-making roles and their stock market and corporate performance.

The report draws on the knowledge base of the global company analysts at Credit Suisse to build a genuine bottom-up profile of the gender make-up of the corporate sector. It analyzes the gender mix of the executive teams of over 3,000 companies stretching across 56 countries and comprising 30,000 executive positions; the CS Gender 3000.

Women on boards
The percentage of women on boards globally now stands at 20.6%. This has broadly doubled since the start of the decade and risen from around 15.3% since the last report in 2016.

• The experience across geographies does vary considerably, being as low as 5.7% in Japan, but closer to 29.7% in Europe. Europe has retained the greatest tailwind of policies and initiatives seeking to address gender diversity within supervisory boards.
• North America has arguably seen the most significant improvements without formal regulatory pressure, with board representation rising from 17.3% in 2015 to now close to 24.7%.
• This sharp uptrend of improvement in North America has not been mirrored in South America, which has seen only gradual improvement toward 7.8%.
• Asia Pacific has also seen a more modest upward trend, although there is a considerable range of country-by-country experience, ranging from 3% to 30%. While the absolute representation of women on the board is low in Japan, we would note it was less than 1% at the start of the decade. Policy initiatives are ongoing to improve female representation.
• The countries with the largest representation include those where quotas or less formal targets exist such as Norway, France, Sweden and Italy. The countries seeing the biggest proportional increase in the last five years have been Malaysia, France, Australia, Germany and Austria (between 9.4% and 12.8%).

Women in management
The proportion of women in management has risen to 18% from 14% in the 2016 study. Regionally, the US (21%) and APAC (19%) reflect greater management diversity than witnessed in Europe (17%)despite the policy focus upon quotas in the boardrooms in many European countries. The US and APAC have seen women in management increase more organically.

However, the spillover from this trend into the most senior executive positions has been limited. Barely 5% of the CS Gender 3000 have female CEOs, and less than 15% female CFOs. Female roles are still clustered away from operational decision making. A third of all “shared services” functions are held by women. 80% of heads of IT positions are male.

Contrasts across the Power Line are less marked in Asia Pacific than in other regions. It has the highest number of female CEOs (5.6%) and CFOs (18.9%). The comparable figures for Europe and North America are 4.1% and 4.5% for CEOs and 13.3% and 13.6% for CFOs, respectively.

The report shows that the proportion of women in management increases as the percentage of women on boards rises, suggesting that the impact of greater diversity in the boardroom leads to a better gender balance in executive functions. At the 50% level of board representation, we find nearly 30% of women in management.

However, the report questions whether there is as much of a “spillover” effect from board to management as might be expected. Despite the existence of quotas and related policies, the board representation in European countries is not mirrored in exceptional management representation by women when compared to countries such as those in Asia Pacific as we have seen in the CEO and CFO data, and also the USA.

Corporate performance

• While not asserting cause and effect, the CSRI’s previous reports found that strong correlations existed between boardroom diversity and share price outperformance and there was also a coincidence of higher levels of profitability when industries are judged like for like.
• The 2019 report has shifted focus to analyze gender diversity and corporate performance through the lens of management rather than just boardroom. At close to 4% outperformance, the “alpha” (excess returns) we find when analyzing differing diversity levels amongst management teams is more than threefold that when only considering boardroom diversity.
• On a sector adjusted basis, the report shows the spread between EBITDA margins between the more diverse versus less diverse companies to be 229 basis points. Credit Suisse’s unique corporate performance framework, HOLT®, finds the cash flow returns on investment to be 2.04% higher and also exhibiting less volatility over time for the companies with a higher proportion of female senior managers. It accords a higher “Quality” attribute to these more diverse companies statistically.

Gender diversity and family-owned companies
Family-owned companies in general tend to outperform non-family-owned peers in terms of financial and share-price returns. Those that tend to perform best, however, appear to have substantial female representation at the executive level. Their EBITDA margins tend to be higher, their reliance on debt tends to be lower, whereas cash flow returns over the past ten years have on average been more than 400 basis points higher. Based on a proprietary survey among 120 family-owned companies, we find that a greater share of female executives also correlates with a greater focus on sustainability, ESG and the UN Sustainable Development Goals.

The female labour market and career progression through macro lens
The report also includes a macro assessment of the dynamics of female labor market participation and the frictions at work that potentially impact female career progression, particularly where managerial roles are concerned. Amongst the policies that potentially need addressing to enhance mobility and flexibility, one is the gender pay gap. The Gender 3000 companies interestingly reflect the lower the diversity, the higher the pay gap.

Patsy Doerr, Global Head of Diversity & Inclusion commented: “It is heartening to see progress being made in most parts of the world to ensure female progression and promotion in the senior positions of the workplace. Though the business case for doing so has long been known, studies such as the CS Gender 3000, and our continued commitment to this research mean we are able to draw ever-clearer conclusions as to how we can achieve an equitable and inclusive workforce.

“That being said, we are still a long way off achieving workplace parity. This is why we are keen to spotlight the issues that persist globally and be part of the conversations that can impact material change in the direction of better gender representation and better corporate performance.”

Richard Kersley, Head of Global Thematic Research commented: “We were uniquely placed to conduct this research using our HOLT valuation framework and global spread of company analysts who have built a comprehensive picture of the gender make-up of the corporate sector. In our view, an understanding of diversity in executive management is of crucial importance if one wishes to really assess the impact of enhanced diversity in the work place and its specific relevance for shareholders. We do not assert cause and effect in our research but let the data speak. We find a material correlation between gender diversity and corporate performance.”

The Gender 3000 report is available at:

About the Credit Suisse Research Institute
The Credit Suisse Research Institute is Credit Suisse's in-house think tank. The Institute was established in the aftermath of the 2008 financial crisis with the objective of studying long-term economic developments, which have – or promise to have – a global impact within and beyond the financial services. Further information about the Credit Suisse Research Institute can be found at www.credit-suisse.com/researchinstitute.