For a second successive year, BNP Paribas Asset Management (‘BNPP AM’) has published the results of its global study on female board membership, ahead of the 2023 AGM season. Board diversity is a source of financial outperformance and helps to create sustainable value.
For this reason, improving gender diversity is a significant focus of BNPP AM’s voting and engagement policy, which is being strengthened further this year. The study compares more than 3.000 companies in which BNPP AM invests with around 17.800 listed companies included in the Institutional Shareholder Services2 (‘ISS’) database. Data is as of the end of December 2022.
- Women hold, on average, 27% of board seats at companies in which BNPP AM invests, an increase of two percentage points from 2021 (25%).
- This compares with an average of 20% for companies in the ISS database, also two percentage points higher than in 2021 (18%).
- Geographic differences remain marked: Europe, South Africa, and Australia are the most advanced in terms of board parity, although all regions are improving.
- This year, BNPP AM is again enhancing its voting policy and increasing its minimum threshold for women on boards by 5%.
Ongoing increase in female board membership
Between 2021 and 2022, female board membership has increased overall, quite markedly in some regions, with a two percentage point increase for both the ISS universe and BNPP AM investee companies, demonstrating positive progress.
Within BNPP AM’s portfolios, the most notable changes were in Asia and Latin America, both rising from 12% to 14%, as well as in North America (up from 28% to 30%) and Europe (up from 34% to 36%). There were similar trends within the broader ISS universe, where the most significant increases were in South Africa (up from 28% to 32%) and Australia & New Zealand (up from 26% to 30%).
Nonetheless, national disparities remain. Within Europe, the trend is positive in France, with an average of 44% of board members being women at investee companies, compared to 40% for the ISS universe. Norway (40%) and Italy (41%) also stand out, compared to ISS averages of 40% and 38% respectively. In North America, investee company female representation levels in both Canada (33%) and the United States (30%) are substantially higher than for the ISS universe (27% and 23% respectively), notably due to BNPP AM’s strict voting policy. In contrast, investee company rates in Asia are generally lower, although Malaysia (28%), Singapore and India (both 19%) compare favourably with Hong Kong (16%), Japan (13%) and Indonesia (8%).
“Geographic differences should be viewed in the context of economic, socio-cultural and regulatory factors. Companies with large market capitalisations tend to integrate diversity issues more easily than smaller companies. Similarly, the existence – or absence – of legally-imposed quotas, as we have recently seen in Europe, also impacts the growth of female board membership.”
Michael Herskovich, Global Head of Stewardship at BNP Paribas Asset Management.
The European Union directive adopted in November 20224 requires all large companies listed on EU stock exchanges to take measures to increase the presence of women in leadership roles and at the board level by July 2026.
