Gender diversity among directors and CEOs of the world's largest companies increased last year but at a slower pace, according to a progress report issued Wednesday by MSCI ESG Research.
The annual "Women on Boards Progress Report" tracks all 2,811 constituents of the MSCI ACWI index as of Oct. 4.
The percentage of women on boards globally reached 24.5% in 2022, up from 22.6% in 2021. The percentage of index constituents with at least 30% female directors increased to 38% from 33% the previous year.
The percentage of female CEOs saw more modest improvement, increasing to 5.8% from 5.3%.
Both developed and emerging markets saw more women on corporate boards in 2022 and 2021, after a noticeable slowdown in 2020, but the growth was attributed to non-U.S. companies.
In the U.S., the rate of increase continued to slow over the past three years, the report found, although women held at least 30% of director seats at U.S.-based companies.
Regional differences also showed up on the report, in part due to more jurisdictions having quotas for female board representation.
Europe had the highest percentage of boards with 30% or more women, and seven of the top countries were members of the European Union. The EU has a new target of 40% of non-executive director posts to be held by women by 2026, and the report found that nearly half of EU-based constituents of the MSCI index have already met the target.
Half of the 96 companies in the index based in the Middle East had no women on boards, and only nine companies (based in Israel and Turkey) had 30% representation. In Saudi Arabia, board diversity improved in 2022 to 27% of boards having at least one female director, up from 19.4% in 2021. In the United Arab Emirates, two-thirds of companies based there met a requirement enacted in 2021 for public companies to have at least one female director.
Mandatory diversity quotas in Japan and South Korea brought some of the biggest changes, the report found. South Korea saw the percentage of male-only boards drop to 21% in 2022, from 42% in 2021 and 65% in 2020. In Japan, the percentage of male-only boards dipped to 7% last year from 15% the previous year and 22% in 2020.
The health-care sector led other industry sectors on two measures: the percentage of board positions held by women, 27.3%, and the percentage of companies with at least 30% female representation on boards, 45.4%.
The report predicts that corporate boards globally will reach the 30% and 50% thresholds for female representation by 2026 and 2038, respectively.
