Lessons from Europe: How to Get More Women on Corporate Boards
U.S. companies are in a moment of self-reflection.
This new-found introspection stems in large part from the #MeToo movement, which has prompted what Fortune’s Claire Zillman recently described as a “reexamination of women’s place in the business hierarchy.”
And yet one area where corporate culture has barely shifted is company boards; in the U.S. only about 20% of directors are female.
The U.S. business world could take a lesson here from Europe, where the momentum behind adding women to boards has picked up steam.
At Fortune’s MPW International Summit in London earlier this week, women at the forefront of the push to diversify European boards shared how they’re moving the needle.
Sophie Bellon, chairwoman of the board of Sodexo; L’Oreal director
With 450,000 employees globally, the company that specializes in everything from foodservice to construction is “in the people business,” says Bellon. “Diversity is what has made us successful and how we became a leader in our industry.” At Sodexo, half of its board is comprised of women.
Bellon supports quotas for the number of women on boards because she’s “a strong believer in what gets measured gets done.” She added, “When you want a company to improve sales or profitability, you just give an objective and everyone is aligned.” This is an important topic so you have to look at it the same way, she said.
Bellon said that everything Sodexo has learned about improving gender balance has come from the U.S., where the conversation about the importance of diversity started earlier than in Europe. But she said that France, where 10 years ago only 9% of boards were comprised of women, has now leapfrogged the U.S. because of its law that 40% of board members of CAC 40 index companies must be female. The U.S. “is not moving fast enough,” she said.
Sophie L’Helias, co-founder of International Corporate Governance Network; founder of LeaderXXchange; Kering director
L’Helias has a philosophy that stems from her time in the activist hedge fund industry. “I believe in numbers,” she said. But when it came to gender in the workplace, she didn’t feel like the data was out there.
For that reason, she started LeaderXXchange, an organization whose mission includes promoting diversity in governance, leadership, and investment. LeaderXXchange recently launched the Gender Diversity Exchange, which tracks the progress of women at 1,500 companies in 38 industries and three geographies. The database not only tracks what companies announce in regards to their gender policies, but whether they’re meeting their targets. “It’s just what they say but what she do,” she says.
The tool also looks beyond boards to diversity in the c-suite and management, as well as the trends over a five-year period. “You’re not going to get empowerment of women if you just focus on boards,” she said.
Helena Morrissey, head of personal investing, Legal & General Investment Management; founder of 30% Club
Morrissey started the 30% Club to push U.K. companies to have 30% of their boards comprised of women by 2010.
Now at Legal & General Investment Management, the investor and institutional asset manager has been voting against the chairs of boards of FSTE 350 companies whose boards are not at least 25% women. Last year, that resulted in the company voting against 37 board chairs in the U.K. “We said, time for talk is over,” Morrissey noted. Legal & General is about to publish the results from its 2018 voting, and Morrissey said this time around it would be more than 37 companies.
Last month the company launched a new fund that will allocate more investment to companies that have reached higher levels of gender diversity. The fund will look at the number of women on a company’s board, executive team, management, and overall workforce. “We’re interested in more than just boards,” Morrissey said. She added, “We’re trying empower everyone to invest this way because money talks.”