Men continue to dominate the boardrooms of publicly traded companies. This is evident from the Female Board Index 2023, which charts the proportion of female directors and supervisory directors at 88 listed companies. Mijntje Lückerath-Rovers, professor of Corporate Governance, who drew up the inventory, speaks of “a standstill” and sees how companies fail to increase the number of women in their boardrooms.
Just like last year, the share of women in the boardroom, for which there are no enforceable rules, is only 15 percent. Of the thirty new positions within the Executive Board, where the real decisions are made, only four went to a woman. Three female directors also left at the same time, all after just one term. Still, 61 of the 88 listed companies do not have a single woman on their Board of Directors, although they appointed 14 new directors last year.
Women are much better represented within the Supervisory Board, which fulfills a supervisory role. They have held 39 percent of the positions there in the past two years. That is more than enough for the women’s quota, which was imposed on listed companies last year. According to that quota, at least one third of the Supervisory Board must consist of women.
The hope was that this legislative intervention would also correct the historically distorted ratio between men and women in other high positions, such as on the Board of Directors. The thought was that as soon as the number of female supervisory directors with enforceable regulations skyrockets, the number of female directors will follow. Nevertheless, according to Lückerath-Rovers, the so-called flywheel effect does not materialise. “Attention to the issue of equality has slackened completely.”
What does this new index say about publicly traded companies’ attitudes to gender diversity in the boardroom?
“The issue is clearly not a priority enough. Otherwise, the proportion of women among recently hired directors would have increased. That figure is especially painful. Especially when you consider that many female board members leave after one term. This way you as a company do not make progress. Like there’s some kind of complacency. Companies think: the quota for supervisory directors has been achieved after all. Why then still invest energy in the Board of Directors? While those numbers really lag behind. That may take time, but there has been no improvement for a second year in a row.”
Don’t these results represent a strong case for a hard quota for the Board of Directors?
“You see that such a measure does work to overcome a certain threshold. Because once the proportion of women in high positions is acceptable, companies will not easily go back to the old situation. I myself am not in favor of a hard quota and in politics such a rule is surrounded by controversy: there is insufficient support to get such a rule through parliament. Many do not want government interference in private sector hiring policies. After all, sometimes there are legitimate arguments to hire a man, such as track record for example. On the other hand, that argument has been used for twenty years. We know that now.”
How can this balanced male-female ratio be enforced?
“Companies need to be held accountable for this. Raising awareness is the best way, through shareholder meetings, consumers and societal pressure. But companies with success stories around diversity should also continue to highlight the positive aspects of this.”
Are the obstacles women face generally acknowledged?
“Basically nobody is against diversity in the broad sense of the word. There is consensus that diversity contributes to innovation and better decision-making. The biggest challenges are the unconscious patterns. Such as assessing and acknowledging quality. Concepts of who is the best driver are still riddled with stereotypes. Men are still considered decisive, assertive, result-oriented and hardworking. Recruiting personnel in particular is a very subjective process in which these feelings and thoughts are decisive.”