More women on boards boost firm performance: Bloomberg Intelligence report
NEW YORK, UNITED STATES — A recent report from Bloomberg Intelligence reveals that female representation on corporate boards has nearly tripled since 2010, with women now occupying 26% of board seats in 2023, up from just 9%.
This surge is largely attributed to regulatory changes across Europe, the United States, and Asia that mandate greater gender diversity in boardrooms.
Higher shareholder returns linked to gender diversity
The report highlights that companies with more women on their boards are delivering significantly higher shareholder returns compared to their male-dominated counterparts.
According to the research, the top 20% of companies with the highest female board membership achieved returns of 2% to 5% more than the bottom 20% in developed markets. In emerging markets, these companies exhibited 2% to 6% less volatility than those lagging in diversity.
“Whether you believe that diversity is a moral imperative or not, at the end of the day, the higher performance linked to higher diversity shows it has a financial and business case,” said Adeline Diab, Bloomberg Intelligence’s Chief ESG Strategist. “This should bolster D&I programs.”
Regulatory changes and backlash risks
Global exchanges, including those in Hong Kong, the European Union, and Japan, are implementing requirements for companies to diversify their boards by 2030.
In the U.S., despite a rising backlash against diversity initiatives from conservative factions, there remains significant pressure on corporations to increase female representation. Currently, women hold approximately 35% of board positions within the S&P 500, while some European nations with diversity quotas report figures exceeding 40%.
However, women occupy less than 10% of CEO positions within the S&P 500. Although they are most represented in chief financial officer roles, men still outnumber them by a ratio of five to one. The report anticipates that women could achieve boardroom parity in Western markets before the end of the decade.
Concerns about “overboarding”—whereby a small number of women are asked to serve on multiple boards—are rising in both Asia and Western markets.
Additionally, with U.S. President-elect Donald Trump pledging to roll back such programs and social media pressures prompting companies to reconsider their commitments without governmental intervention, the future of female representation in corporate leadership remains uncertain.
