By lauracohn
August 16, 2016

European companies are doing a better job of diversifying their corporate boards than American firms are. A new analysis by the Financial Times shows that while women make up 25% of European boards, they hold only 15% of the seats on U.S. boards.

The study of ISS Analytics data from more than 45,000 directors in 5,000 companies in 30 markets, also showed U.S. board directors are an average of four years older than European directors. The figures provide fuel for those pushing for improvements in diversity as a way to make corporate boards more effective. Since the 2008 financial crisis, corporate governance campaigners have argued that long tenures and lack of diversity have caused boardrooms to become lax in their oversight.

Brenda Trenowden, global chair of the 30% club that advocates for women holding more positions on FTSE 100 boards, told Bloomberg recently that change has to come from the top. “It has to be led by the CEO, by the chair, and then by the managers all the way down,” she said, adding that a more effective board can add to a company’s bottom line. “This is about all the research that shows that greater heterogeneity in teams leads to better decision-making and better performance,” she said. In other words, diversity pays–literally.

@laurascohn

SPONSORED FINANCIAL CONTENT

You May Like