UK Women Level Up As Stoxx 600 Corporate Board Diversity Rises
By CultureBanx Team
- 8 Stoxx 600 companies increased the number of diverse women on their boards
- Goldman Sachs will vote against FTSE 100 boards that don’t meet its diversity goals from March 2022
Across the pond in the United Kingdom women are improving their board director standings on Stoxx 600 publicly traded companies. Eight Stoxx 600 companies increased the number of women on their boards, as the appointments come ahead of a target set by the Parker Review that each company in the U.K.’s FTSE 100 Index to have at least one director from an ethnic minority background by the end of this year. Even Wall Street firms like Goldman Sachs have said it will vote against FTSE 100 boards that don’t meet its diversity goals from March 2022.
Why This Matters: There’s research showing the many benefits of diversity in thought among corporate leadership. McKinsey and MSCI shows companies with higher levels of diversity at the board level are more likely to have strong financial performance and fewer instances of poor corporate governance.
Ngozi Edozien became a non-executive director of Imperial Brands on November 15 and is also on the board of Guinness Nigeria, a listed unit of Diageo. Harmeen Mehta, who was born and raised in Chandigarh, India, joined the Lloyds Banking Group board at the start of last month. The aforementioned firms are also in the FTSE 100 Index.
About 20% of Stoxx 600 companies had no ethnic minorities on their boards as of March, compared with about one in two in January 2020. Specifically, the percentage of Stoxx 600 female directorships increased to 37.3% from 37.2% in November, according to Bloomberg. This is above the 30.4% of the S&P 500 right here in the U.S.
One-hundred forty-five S&P 500 companies have appointed at least one Black director to their board since last June, according to Latino Corporate Directors Association. However, there is a concerning development of a consensus across boardrooms on the value-add of diversity. A PwC survey of 900 board directors found 24% of directors don’t believe racial diversity has an impact on diversity of thought within boardrooms.
Situational Awareness: There are institutions like the Nasdaq that are challenging the status quo by requiring its listed companies to make their boardrooms more diverse. Board appointments for people of color in the U.S. increased from 13% in 2010 to 23% in 2019, so if Nasdaq companies don’t, or seemingly can’t diversify their boards, they will be publicly required to explain why not and possibly delisted.
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