How Effective Are Policies on Board Gender Diversity?

Organizations with established policies tend to have a substantially higher share of female members on their boards

Clarity AI performed an analysis to determine whether board gender diversity policies are indeed effective in increasing female board representation. In this research, we looked at data reported by more than 7,200 companies worldwide since 2020 and compared the percentage of women on the board of organizations with a policy aimed to improve gender diversity in their boards with those without one. 

Results show a positive correlation between metrics: organizations that have established a policy tend to have a substantially higher share of female board members compared to those without an established policy (28.6% vs 20%, respectively). 

Figure 1: Percentage of women on the board (median value). Note: Data from 2020 onwards of more than 7,200 companies which belong to the MSCI ACWI IMI Index. Source: Clarity AI

The same pattern of higher female representation on the board for companies with a board gender diversity policy held true when performing the analysis at the sector level. Notably, sectors such as Utilities, Materials and Communication Services showed the most significant differences, whereas, Real Estate, Health Care and the Energy sectors showed the smallest differences.

Figure 2: Percentage of women on the board, by industry (median value). Note: Data from 2020 onwards of more than 7,200 companies which belong to the MSCI ACWI IMI Index. Source: Clarity AI

Geography may significantly influence gender diversity. We verified that companies with and without a board gender diversity policy have comparable regional distributions in our sample to ensure comparability between both groups. Moreover, the previous results also hold across all regions: companies with a board gender diversity policy consistently showed a higher proportion of female board members compared to those without.

Figure 3: Percentage of women on the board, by region Note: data from 2020 onwards of more than 7,200 companies which belong to the MSCI ACWI IMI Index (Asia & Pacific: +2,000; Europe & Central Asia: +1,700; Latin America & Caribbean: +300; North America: +3,200; Middle East & Africa: +280). Source: Clarity AI

By prioritizing gender diversity, companies signal their commitment to building a workplace culture where diverse talents are valued. Investors are in a unique position to engage with companies, using the right metrics and data to influence change.

Contact us to learn more about key indicators and metrics to measure companies’ impact on gender diversity.

This article was originally published on December 15, 2023, and updated in March 2024.