This week, BNP Paribas Asset Management released the results of its latest global study on female board membership, ahead of International Women's Day on 8 March. The study compares the average board composition of the companies in which BNPP AM invests with those on the ISS database.  

A study by BNP Paribas Asset Management found that female board membership rose by 2 per cent in 2022, compared with the previous year. 

According to the firm, board diversity is a source of financial outperformance and helps to create sustainable value. For this reason, improving gender diversity is a major focus of BNPP AM's voting and engagement policy, which is being strengthened this year.

The European Union directive adopted in November 2022 also requires all large companies listed on EU stock exchanges to take measures to increase the presence of women in leadership roles and at board level by July 2026.

The study compares more than 3,000 companies in which BNPP AM invests with around 17,800 listed companies included in the Institutional Shareholder Services database. Data is current as at the end of December 2022.

On average. women hold 27 per cent of board seats at companies in which BNPP AM invests, an increase of two percentage points from 2021, the firm said. This compares with an average of 20 per cent for companies in the ISS database, also two percentage points higher than in 2021.

Nevertheless, geographic differences remain marked: Europe, South Africa and Australia are the most advanced in terms of board parity, although all regions are improving, the firm continued.

Between 2021 to 2022, within BNPP AM’s portfolios, the most notable changes were in Asia and Latin America, both rising from 12 per cent to 14 per cent, as well as in North America, up from 28 per cent to 30 per cent, and in Europe, up from 34 per cent to 36 per cent.  

The study shows that there were similar trends within the broader ISS universe, where the most significant increases were in South Africa, Australia and New Zealand.

However, national disparities remain. Within Europe, the trend is positive in France, with an average of 44 per cent of board members being women at investee companies, compared with 40 per cent for the ISS universe, the firm said. Norway (40 per cent) and Italy (41 per cent) also stand out. 

In North America, investee company female representation levels in both Canada (33 per cent) and the United States (30 per cent) are substantially higher than for the ISS universe (27 per cent and 23 per cent respectively), notably due to BNPP AM’s strict voting policy, the firm said. In contrast, investee company rates in Asia are generally lower, although Malaysia, Singapore and India compare favourably with Hong Kong, Japan and Indonesia, the firm continued.

This year, BNPP AM said that it is enhancing its voting policy and increasing its minimum threshold for women on boards by 5 per cent.

Rachel Crossley, head of stewardship for Europe at BNP Paribas Asset Mangement, said: “Investors have a crucial role to play in increasing female board representation, by both expressing their position through voting and intensifying dialogue with issuers. Although regional differences remain, we are nonetheless very pleased with the progress that has been made, demonstrating greater consideration of diversity issues globally.”