By Valerie Hermann
The Modern Global Leadership report and its Board Diversity Gaps report, created by the Diligent Institute in collaboration with 22 organizations worldwide, is the first global analysis of boardroom diversity to be conducted and provides unique insight into the progression of inclusion on public and private boards worldwide.
For this study, each organization shared information on objectives, proposed goals and employment opportunities for minorities and underrepresented groups on boards, such as women, racial/ethnic minorities, members of the LGBTQ+ community and individuals with international perspectives.
The report included data at the global level with emphasis on several regions such as:
The results were similar across regions, showing great opportunities for improvement. One of the main findings in Latin America is men's and women's perception of their own boards and that they do not have a direct relationship with reported objective diversity, i.e., women report on average a lower level of perceived diversity.
Also, 66% of female directors surveyed perceived "low" or "very low" levels of diversity; versus 44% of male directors. Notably, most directors reported that their boards needed more women and younger board members, as well as directors with different skills and experience, in order to work more effectively.
An important finding of the study was that women reported experiencing discriminatory treatment on their boards based on their origin or identity to a greater extent than men (30% vs. 11%) and this treatment is more likely to be reported by board members representing boards with lower perceptions of diversity.
Another key point to highlight in the region is leadership on the boards of family businesses. There is a latent concern about the lack of external and independent directors who can offer a different perspective and help balance power among family members.
Compared to the worldwide increase in gender diversity, there is still less change in the boards with regard to nationality and ethnic and racial diversity.
Most boards tend to appoint a director who comes from the country where the company is headquartered. This is the case in Japan, whose boards have the highest percentage of local directors relative to other nationalities, 98%.
The United Kingdom is the exception, as it is the only country that requires listed companies to include at least one director from a racial or ethnic minority group.
In the case of the Middle East, for example, according to research, the number of seats held by women on boards has doubled in the last two years. The UAE's continued efforts to improve gender diversity in boardrooms have led to more women filling these positions, rising from 3.5% in 2020 to 8.9% this year.
In terms of directors' skills, women tend to have more experience and proficiency in areas such as technology, sustainability and the legal area.
According to Diligent's research, there are three times as many female directors with professional experience in sustainability compared to their male counterparts. In the same order, female directors are twice as likely to hold three board seats compared to male directors.
It is worth noting that in most of the regions that participated in the report there is very little, if any, data available regarding the LGBTQ+ community. This is mainly due to three key factors: (i) stigma and cultural differences regarding the acceptance of LGBTQ+ people; (ii) regional differences when it comes to the recognition of LGBTQ+ status as a characteristic to be tracked; and (iii) the challenges of maintaining confidentiality and protection of personal data information when it comes to disclosing the LGBTQ+ status of employees.
The United States is the only country among those surveyed that provides data and information on LGBTQ+ board members. According to the data provided, only 0.5% of Fortune 500 board seats are held by members of the LGBTQ+ community.
Even though companies and organizations globally are working to improve opportunities for these groups, the reality is that there are still many gaps and the speed of these changes is very diverse and varies between public and private companies, even within the same country.
Diversity gives companies a broader perspective on the actions they take and the messages they want to convey to society and future generations.
