Since women are typically the underrepresented gender on corporate boards, the percentage of board seats they occupy is a common indicator used by investors concerned with diversity, equity, and inclusion (DEI). Compounding the importance of this indicator are the high rates of disclosure from companies with respect to their boards and low disclosure on other areas of corporate diversity. While MSCI provides gender diversity data at the board level for nearly all companies in the MSCI ACWI® Index, data availability on gender composition drops to 67% of companies for the entire workforce and 16% of companies for senior management. Additionally, only 8% of companies disclose their policies on promoting workforce diversity, in general.

Given the importance of board gender data to investors, understanding recent trends may be helpful.  While there is still a gender gap on the corporate boards of publicly traded companies, data from MSCI indicates a steady increase in the number of women holding those board seats in recent years. Today, a company listed in the MSCI ACWI Index has a quarter of its board filled by women, on average, up from 19% in 2019, as seen in Figure 1.

Figure 1. Average percentage of women on boards of directors (calculated as the ratio of female board members to total board members) in the MSCI ACWI Index, from July 2019 through July 2023. Source: Aperio and MSCI.

Achieving gender equality is one of UN’s global sustainable development goals¹ and many countries have chosen to promote this principle through various forms of legislation.  Last year, the European Parliament passed a law requiring publicly traded companies to have at least 40% of non-executive director posts filled by the “underrepresented sex” by July 2026.² In the EU, France and Denmark have the highest averages of women on boards, 46% and 44%, respectively, compared to 31% in US, based on data from MSCI. Of the countries in the MSCI ACWI Index, New Zealand has the highest average at 50%, making it the only country achieving board gender parity.  Conversely, Qatar, Saudi Arabia, and Kuwait are among the lowest ranking countries, as shown in Table 1.

Table 1. Top and bottom 5 average percentage of women on boards of directors (calculated as the ratio of female board members to total board members) in the MSCI ACWI Index, by country as of July 2023. Source: Aperio and MSCI.

Notably, the gender gap in corporate boards is lower in companies with larger capitalizations. Divided evenly into quartiles by size, the largest companies in the MSCI ACWI Index, on average, have 32% female representation on boards, twice that of companies in the lowest quartile, as shown in Figure 2. A similar relationship was present in mid-2019, where the average was 25% women in the top quartile compared to a mere 11% in the lowest.

Figure 2. MSCI ACWI Index sorted by market capitalization from smallest to largest, divided evenly into 4 groups (quartiles) and the percentage of women on boards is averaged in each group as of July 2019 and July 2023. Source: Aperio and MSCI.

Besides company location and size, data from MSCI suggests an association between the proportion of women in the workforce and the proportion of women on the board. Today, 36% of employees in Healthcare are women, on average - one of the largest ratios in all sectors.³ Healthcare also surpasses other sectors in female board representation with an average of 28%. Information Technology, on the other hand, has a relatively low presence of women in its workforce (21%, on average) and ranks the lowest at 22% on female board representation. Incidentally, a tech company’s board is more representative of the gender of its overall workforce, on average, whereas Healthcare falls short on proportional representation of women in its top leadership.

As with all data concepts, board gender data comes with its limitations. It is usually collected directly from company sources and when the gender of a board member is not explicitly disclosed by the company, identification may require additional research and evaluation by the data provider.  It also offers a binary gender representation of male or female, lacking more inclusive forms of self-identification.  Based on the available data, much improvement is still needed for investors concerned with DEI issues on board gender diversity as well as higher rates of disclosure across a broader set of diversity indicators.

Send questions or comments to aperio.blog@blackrock.com.

¹ United Nations, Department of Economic and Social Affairs Sustainable Development, The 17 Goals.
² Small and medium-sized enterprises with fewer than 250 employees are excluded from the scope of the directive.   “Parliament approves landmark rules to boost gender equality on corporate boards.”
³ Based on data coverage from MSCI and to the extent data is available, coverage may not be uniform across industries and/or the statistics shown may not represent an entire industry.

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Benchmarks & Indexes

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The MSCI ACWI® Index is an equity benchmark for global stock performance. It is a capitalization-weighted index covering large and midsize companies. The index includes approximately 2,900 stocks from 23 developed-market countries and 24 emerging-market countries. The MSCI Index(es) referenced herein are the registered trademark of MSCI or its subsidiaries in the United States and other jurisdictions. The indexes are used by Aperio under license from MSCI. The strategy referenced herein is not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such strategies, or any MSCI index upon which such strategies are based. Aperio’s license agreement with MSCI contains a more detailed description of the limited relationship MSCI has with Aperio and any related strategies. No further distribution of data from any MSCI index is permitted without the MSCI’s express written consent.

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