Female Representation on Corporate Boards of Directors

Values-Aligned Investing
September 18, 2023

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.

Country Top 5 Country Bottom 5
New Zealand 50 Hungary 11
France 46 Indonesia 11
Denmark 44 Kuwait 5
Norway 43 Saudi Arabia 4
Netherlands 42 Qatar 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.

Important notes
Aperio Group, LLC, provides this material for informational purposes only and for the sole use of the recipient. The information contained herein was carefully compiled from both internal data and external  data, but  we do not guarantee its accuracy. The information is provided with the understanding that we are not engaged in rendering legal, accounting, or tax services. We recommend that all investors seek out the services of competent professionals in these areas. The strategies and/or investments referenced may not be suitable for all investors, because the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. None of the examples should be considered advice tailored to the needs of any specific investor or a recommendation to buy or sell any securities. The fees and expenses Aperio charges may be higher than the fees and expenses of other investment advisors and may offset profits. Additional information about the firm, and our fees and expenses, is included in our Form ADV.
Investing involves risk, including possible loss of principal. Asset allocation and diversification may not protect against market risk, loss of principal or volatility of returns. There is no guarantee that any investment strategy discussed herein will work under all market conditions. Many factors affect performance, including changes in market conditions and interest rates, as well as other economic, political, or financial developments.
You should not assume that investment decisions we make in the future will be profitable or will equal the investment performance of the past. With respect to the description of any investment strategies, simulations, or investment recommendations, we cannot provide any assurances that they will perform as expected and as described in our materials. Past performance is not indicative of future results.

Benchmarks & Indexes
Any indexes referenced herein are used under license by Aperio. Indexes represent unmanaged groups of securities. Investing directly in an index is not possible. Reference to an index does not imply that the portfolio would achieve returns, volatility, or other results similar to those of that index. Further, an index’s composition may not reflect the manner in which a client portfolio is constructed in relation to expected or achieved returns, investment holdings, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility, or tracking error targets, all of which are subject to change over time. Any index referenced would necessarily be materially different in strategy and volatility from the client account.
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.


© 2023 BlackRock, Inc. or its affiliates. All rights reserved. BLACKROCK and APERIO are trademarks of BlackRock, Inc. or its affiliates. Other trademarks are property of their respective owners.

This material is provided for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are subject to change at any time without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations.

This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of yields or returns, and proposed or expected portfolio composition. Moreover, any historical performance information of other investment vehicles or composite accounts managed by BlackRock, Inc. and/or its subsidiaries (together, “BlackRock”) included in this material is presented by way of example only. No representation is made that any performance presented will be achieved, or that every assumption made in achieving, calculating or presenting either the forward-looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein by way of example. Past performance is no guarantee of future results.

The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy.