Where are the women?


We had to wait 366 days before the calendar gave us a new “International Women’s Day”! An excellent occasion to (re)look at the place of women in corporate governance.

So where do we stand? Entering into effect in 2011, the French Copé-Zimmermann Act(1) on gender balance in corporate governance bodies has already increased the number of women on company boards. And at least one year before the last quota level enters into effect (40% for women starting 1 January 2017), the High Council on the gender equality has already released a first report on its application(2).


A certain number on boards of directors…

The result is flattering: France ranks first in the European Union for the percentage of women on boards (29% for all listed companies). More importantly, their presence contributes significantly to improved corporate governance: their arrival in significant numbers on French boards has lowered the age of boards and increased their international make-up. These new women directors are also more independent, less likely to hold multiple offices and for that reason more available. In effect, 81% of women directors of the SBF 120 hold only one office. Finally, the requirement of recruiting women has been accompanied by increasing professionalism in the recruitment process, making it possible to dispense with co-optation. These trends open the way for appointing women representing all relevant areas of expertise for the company.

At the same time, the adoption of quotas does not entail only virtues. A certain number of companies have adopted strategies to circumvent these constraints (reducing the number of members to mechanically increase the percentage of women, changing the legal structure, etc.). Others invoke an insufficient candidate pool for women. 630 positions for women directors remain to be filled between now and early 2017 in listed companies, and twice this amount if one includes unlisted companies. While the first quota level (20% in 2014) was easily met, the second seems much more difficult to surmount. Why is the candidate pool so limited?

… though much less on management boards

The most natural women candidates for board directorships are of course those occupying management positions in companies (the so-called C-suite executives). However, this is where things become problematic: the presence of women on management boards remains very limited, much more so than in the case of boards of directors. A study by McKinsey & Company shows that in US companies in 2015, women occupied only 17% of management positions, a figure that has not increased significantly (16% in 2012). With the adoption of quotas, it is to some extent as if the problem was addressed backwards!

This is too bad because studies show that the correlation between feminization and company performance is much more important when one looks at management boards as opposed to boards of directors. In February 2016, Harvard Business Review published the results of the study conducted by the Peterson Institute(3) of a worldwide selection of 22,000 companies. This study showed that for companies where 30% of C-suite positions are occupied by women, the net margin was 15% higher than those companies with no women (7.4% vs. 6.4%). It also shows that the impact of feminization on performance is higher for companies having a feminized management team than for companies headed by a woman or having a board of directors with good gender diversification.

More than feminization – which is improving, and of course a good thing –, we are firmly convinced that diversity in the broad sense of the term contributes to performance, whether in terms of ethnicity or skills. The McKinsey & Company “Diversity Matters 2014” study demonstrates that operational outperformance of companies characterized by high ethnic diversity is higher than the outperformance of companies with high gender diversity. Like Christine Lagarde, we believe that “diversity provides a different perspective on the world, and original analytic approach and new solutions. Real added value”: nearly 10 years of analysis of the governance and performance of companies has demonstrated its every day contribution.

Sonia Fasolo


(1) The French act on gender diversity and equality in corporate governance bodies.
(2) Report of the French High Council of Gender Equality of 10/02/2016
(3)  Working Paper « Is gender diversity profitable? Evidence from a global survey » www.piie.com/publications/opeds/oped.cfm?ResearchID=2915