Gender disparity in business, well-chronicled among CEO positions, also extends to corporate boardrooms worldwide. Research has shown that companies benefit not only from being more gender and ethnically inclusive, but also from hiring individuals with a range of experiences and backgrounds.
“Boards that aren’t looking for younger, digitally savvy female and ethnic board members are really going to fall behind. It’s a key part of staying relevant in today’s market,” Macy’s Inc. board member and former PepsiCo CEO Craig Weatherup told Fortune magazine earlier this year.
Research has also shown that companies with gender-diverse boards are less likely to be hit by governance-related scandals. In March, the Financial Times reported that in a review of 6,500 companies worldwide, index provider MSCI found that companies that were more diverse than average were less likely to be affected by scandals involving bribery, fraud or shareholder battles.
However, quotas and targets do not necessarily trickle down to the global workforce, nor increase the number of women in other executive and management positions. There is also some concern that quotas encourage tokenism, where companies hire an individual for diversity’s sake but do little to address the firm’s culture.
In Cayman, Andrea Williams, general counsel for UBS Fund Services and president of the Business and Professional Women’s Club of Grand Cayman, said that while she can see the value of quotas in certain business cultures, she is “not a big fan.”
“I see absolutely no reason why women can’t make it on their own merits, like they’ve done in Cayman,” Ms. Williams said.
“The Cayman Islands is a great place for gender diversity,” she added. “It has a fantastic legislative framework in place to ensure that happens, but also it’s a culture that has historically promoted women in the workplace. She pointed, in particular, to the financial service industry, accounting, law and tourism.
The Business and Professional Women’s Club itself is one of many initiatives in Cayman aimed at raising the profile of women in business and increasing networking opportunities.
Another organization, the Cayman Islands chapter of 100 Women in Hedge Funds, has been recognized as one of the fastest-growing chapters worldwide since its launch two years ago. The professional community of women who work in the alternative investment industry aims to promote change through education, philanthropy and professional peer leverage initiatives.
Another fast-growing organization is the Cayman Islands chapter of the Women’s International Shipping and Trading Association, which was formed in 2014 to connect global professionals by providing networking and career support in an industry where women are a minority.
“WISTA allows relationships to be built which are put to use in an ongoing way for transactions, matters of mutual interest and the general advancement of women and young people in this space,” said Cayman President Sherice Arman.
“The world of shipping, as with law, has traditionally been male dominated but that is changing with many women assuming leadership roles.”
Ms. Arman, who is Of Counsel at Maples and Calder, said she expects to see more and more women taking up roles in the shipping world over the next decade, whether as lawyers, engineers, officers on ships, business owners, or in a variety of other capacities.
“We continue to operate on the premise that there is always room at the top as a reward for good work ethic and intelligence,” Ms. Arman said. “We see it as our responsibility as women who have made it to management positions within our organizations to mentor, encourage and create more opportunities for the women coming behind us.”
Allison Nolan, founder and managing director of Cayman-based Athena International Management Ltd., which offers corporate governance services to the international financial community, said Cayman “has come an awfully long way” since she first arrived, when women in top positions were “few and far between.”
Ms. Nolan practiced law in London before joining offshore law firm Appleby in Cayman. When she became a partner in 2002, there were no other women who had been promoted to partner in the major offshore law firms in the country.
“I think that there has been a vast improvement, and I see it almost year by year, in the amount of women appointed to senior positions, certainly in the financial industry,” Ms. Nolan said. “It feels much more like an environment of equal opportunity.”
Ms. Nolan is also one of the founders of the Cayman Islands Directors Association and currently serves as its vice president.
Addressing diversity on executive boards, Ms. Nolan said it is important to have diversity of experience more than anything else.
Setting quotas, however, may not be the best approach, she advised.
“When somebody chooses me and puts me on their board, I want them to choose me for my qualities and not because we need more women,” she said.
Ms. Nolan added that she is excited about an initiative called Board Apprentice, which is coming to Cayman. The nonprofit organization, founded in the U.K. by Charlotte Valeur, managing director of GFG Ltd, a governance consultancy, is dedicated to widening the pool of board-ready candidates and increasing diversity on boards globally. The organization aims to diversify beyond gender to include candidates of different ethnicities, cultures, ages and skill sets.
Apprentices are paired with a company’s board, where they sit for a year. The apprentice’s role is to observe and learn from the board and gain insight into how boards operate. Board Apprentice helps individuals get their foot through the boardroom door, providing them with the kind of experiences that directors seek.
Ms. Nolan said the initiative will not only increase gender diversity, but will also help equip Caymanians, in general, who seek a board seat or want to join government.
Gender diversity worldwide
To put the issue of diversity into some perspective, in the United States, there are more men named John who are CEOs of the country’s biggest corporations than there are women who are CEOs in those companies.
In Australia, there are more men named Peter than women with top positions in the ASX200, and in the U.K., men with the title “sir” outnumber women in leadership positions of top companies.
According the a 2014 census of women board directors by Catalyst – a nonprofit with a mission to expand opportunities for women and business – the world’s largest economies have a long way to go to achieve gender parity on executive boards.
At the time that survey was conducted, 19.2 percent of board seats in S&P 500 companies in the United States were held by women. Women in Canada held 20.8 percent of seats in S&P/TSX 60 companies. The country with the lowest percentage of seats held by women was Japan, with 3.1 percent. Norway had the highest percentage at 35.5 percent.
In recent years, a number of initiatives worldwide have focused on efforts to increase the number of women appointed to corporate boards, including legislation in several European countries requiring companies to meet certain gender quotas in board appointments.
Norway, Spain, France and Iceland have all set boardroom quotas for women at 40 percent. Italy has a quota of one-third, Belgium has a quota of 30 percent, and the Netherlands has a non-binding target of 30 percent.
In March, Germany passed a law that requires 100 of the country’s most recognized companies (including Volkswagen, BMW, Siemens, Bayer and Merck) to appoint women to 30 percent their boardroom seats, starting in 2016. By Sept. 30 of this year, another 3,500 companies must submit to the government their plans to increase the number of women in top positions.
The New York Times reported that Germany’s Justice Minister Heiko Maas called the law “the greatest contribution to gender equality since women got the vote.”
Prior to the legislation, women held 22 percent of boardroom seats in companies on Germany’s DAX 30 index.
German Chancellor Angela Merkel, who had opposed quotas, told parliament at the introduction of the law in November 2014 that the legislation “is an important step for equality because it will initiate cultural change in the workplace.”
As it tries to recover from recent scandals and begins its reform process, world football’s governing body FIFA recently announced that it will seek to fulfill a target of 30 percent for women’s participation on boards and committees and in senior management roles.
Web-based magazine “Inside World Football” in August quoted Moya Dodd, chief of FIFA’s Task Force for Women’s Football, as saying, “This is a crucial time for FIFA as the reform process is set to advance in the coming months and the Task Force for Women’s Football will continue to push for better gender balance in football given that it undoubtedly enhances governance and improves the game overall.”
Other global efforts lag
Meanwhile, Britain and the United States have been reluctant to adopt boardroom quota laws, although independent efforts have helped increase women’s representation slightly in those countries.
In July, the British government announced that it had met a target set in 2011 for women to hold at least 25 percent of FTSE 100 board directorships – although few of those positions are executive directorships.
Bloomberg reported in July that the pace at which women were added to Fortune 500 boards in the United States slowed to about 2 percent yearly after a decade of 5 percent annual growth ended in 2005.
Some high-profile some companies, including Twitter, have appointed women to their boards after public criticism over a lack of diversity.
Despite such independent efforts, however, progress to get women appointed to boards in the U.S. has been slow. In February, Fortune magazine reported that fewer than 1 percent of companies in the Fortune 500 had achieved gender parity on their boards, as only 18 percent of directors were women.
Beyond hiring solely for the sake of diversity, however, there are pragmatic reasons for companies to strive for gender parity – and to diversify in other ways as well.
According to research by multinational management consulting firm McKinsey & Company, businesses in the top quartile for diversity financially outperform those in the bottom quartile. Gender-diverse companies are 15 percent more likely to financially outperform, and ethnically diverse companies are 35 percent more likely to outperform.