More female directors appointed in European boardrooms

25 March 2020 6 min. read

The number of women appointed in the boardrooms of large public European companies continues to rise, with the share of female executives increasing from 32% to 34% over the past twelve months, according to a new report by Korn Ferry. 

For its study, Korn Ferry examined the composition and pay structures of 393 listed companies across 13 European countries, with its ‘Directors in Europe’ report presenting a detailed picture of the state of the boardroom across the continent. Companies in the analysis included those listed on the FTSE100 in the UK, DAX100 in Germany and the CAC40 in France, among others. 

Gender equality in boardrooms

Back in 2017, 30% of director positions of the listed companies were held by women, and following two years of diversity growth this now stands at 34%. “In recent years gender equality has dominated the diversity agenda,” said the report, although countries have adopted “different approaches to boost female presence in the boardroom.” 

France leads the way in gender diversity with the highest proportion of female directors on boards (45%), lifted mainly through the introduction of binding legislation. Italy ranks second with a share of 43% female, key difference with France is that its Southern neighbour managed to book its growth without the use of such quotas.

Average gender mix per country

At the other end of the scale, Austria is the country with the lowest number of female directors at 20%. But, according to Michael Bursee, a senior partner at Korn Ferry in Germany, Austria is expected to improve its boardroom diversity in the coming years.

“Since 2018, there is a quota for listed companies with more than 1,000 employees, set at 30% women on board positions. This must be considered in any new elections or delegations, and if companies are unable to appoint women to at least the 30% threshold, then they are required to leave those seats vacant until a suitable candidate fills the position.” 

Other countries that score relatively poorly on executive diversity are Switzerland, Spain and the Netherlands. Switzerland recently implemented a similar quota to that in Austria (30% bar for companies listed on the Swiss stock exchange with more than 250 employees). However, Swiss companies have five years to reach the target and face no sanctions if they fail to meet the quotas.

Median actual pay by country

On the Netherlands, Amsterdam-based Korn Ferry senior partner Eric Engesaeth said, “The Netherlands has enforced a quota for gender parity, with listed companies mandated to fill at least 30% of board positions with women. Companies that fall short of this target are required to explain why in their annual reports.”

Commenting on the disparity in approach between member states, Sonamara Jeffreys, Co-President of Korn Ferry EMEA said, “Some countries have set internal targets while others, unsatisfied with slow progress, have resorted to binding obligations using strict quotas to prioritise female hiring. Both approaches have had success in different countries, suggesting there’s no one way to handle this problem – it’s about identifying the stumbling blocks in each situation and being flexible in how to address them.” 

As in the 2019 edition of the report, just 8% of all non-executive board chairs are women. However, the number of women holding deputy chair/senior independent director positions increased to 20% (up from 18%). The number of women in remuneration chair roles increased to 31% (up from 25%), and chair of the audit increased to 29% (up from 24%). 

Across Europe the number of committees without any female directors also dropped, with 19% of audit committees (down from 24%) and 25% of remuneration committees (down from 29%). 

Median gender pay gap

Pay parity at the top

Korn Ferry’s data suggests that gender gap in European companies is beginning to narrow. The gap varies from country to country but male non-executive directors in Europe receive, at the median, 5% more in total fees than their female counterparts (last year it was 6%).

The pay gap is largest in Germany (22%), although this is partly explained by a large under-representation of women on the strategically important board committees in the country, which by nature translates into women board members being paid less than men. France is the only country where the trend is reversed – female directors received 6% more in total fees than their male colleagues. 

Nationality mix

The nationality mix of directors is another diversity metric Korn Ferry’s researchers took under consideration. Again, the results vary significantly from country to country. On average, 60% of directors are from the country in which they serve (down from 61% last year). 24% of this group are of other EU nationality and 16% are from outside the European Union. 

Nationality mix

Executive boards in Switzerland, Denmark, Belgium, the United Kingdom and the Netherlands are the most internationally diverse. 

“The trend towards increased boardroom diversity is gathering pace in Europe as boards continue to be under pressure from both regulators and the public, in particular with regard to gender diversity. Boards are also recognising the value gained from greater breadth of perspective in the boardroom and are acting on this in the nomination of new directors,” concludes the report.