Efforts to achieve gender parity on corporate boards have seen notable strides globally, but challenges remain. Distinguished Professor Ruth Aguilera, an expert in international business and governance, offered her expert opinions as we sat down with her to discuss the evolving landscape, persistent barriers, and shining examples of leadership in this critical area.
Global progress
Gender parity on corporate boards has advanced significantly, particularly in Europe, where legally binding quotas have driven transformative change. Norway became a pioneer in 2002 with its gender quota law, and more recently, the European Directive on Women on Boards has set a target for companies to have at least 40% of non-executive director positions held by women by 2026. These measures have propelled countries like France, Iceland, and Italy to the forefront, with women now holding over 40% of board seats in these nations.
Emerging markets are also making progress. Aguilera's research with Professors Venkat Kuppuswamy and Rahul Anand highlights the effectiveness of quotas in increasing board diversity in countries like India, demonstrating how regulation can catalyze change even in traditionally male-dominated industries.
Persistent barriers and potential solutions
Despite global progress, significant challenges persist, particularly in the U.S. Among S&P 500 firms, women accounted for 42% of new board appointments in 2024—a decrease from 46% in 2023, according to Spencer Stuart's New Director and Diversity Snapshot. This marks a concerning reversal in a decades-long trend of increasing representation.
One critical barrier lies in the differing recruitment pathways for men and women. Men often rely on extensive networks to secure board positions, while women frequently depend on search firms, which limits their opportunities. “I believe it is important that boards conduct effective skill set analysis and are open to welcoming new voices to avoid group thinking and myopic decision-making and instead embrace a wider set of views on decision-making,” Aguilera emphasizes. “There is research showing that diverse teams take longer to reach decisions as they have to incorporate diverse viewpoints, yet generally, the agreed-upon decisions tend to be better ones.”
Leading by example
France stands out globally, with women holding 45.2% of board seats—a result of stringent quotas. Other European nations, such as Norway, Italy, and the Netherlands, also lead due to robust legislative frameworks. In the U.S., institutional investors like BlackRock and State Street have championed diversity, contributing to women occupying 34% of board seats among publicly traded firms. However, progress has stalled among the largest corporations, highlighting the need for renewed focus and commitment.
The EU's Directive on Women on Boards, effective by 2026, mandates transparent appointment processes. Candidates can request specific qualification criteria and the comparative assessments used during selection, ensuring fairness and accountability. However, this directive applies only to EU-listed companies, limiting its broader impact.
Looking ahead
Achieving gender parity is about more than meeting quotas; it's about fostering diverse, innovative boards that drive better decision-making and stronger organizational outcomes. Initiatives like the EU directive underscore the importance of transparency and a commitment to diversity. Addressing structural challenges is essential to creating a truly equitable environment for leadership.
By learning from countries that have successfully implemented quotas and tackling persistent barriers, businesses worldwide can pave the way for more balanced and effective leadership at the highest levels.