As corporations strive for greater boardroom diversity, the progress, while commendable, reveals underlying disparities that merit closer examination. Drawing upon industry reports and trends, including insights from both: Bedford Group Transearch’s 2023 Mining Compensation Report and 2023 Biotech Compensation Report, we delve into the nuances of board composition and the continuing imperative for continuing to advance Board Diversity.
Diminishing Board Diversity Progress
Recent years have witnessed a slow but positive shift in female representation across corporate boards. For instance, in the Canadian mining sector, female board representation has increased incrementally from 13% in 2018 to 21.8% in 2022. For the North American Biotech sector female Board representation for Nasdaq listed companies has jumped from 15% in 2020 to 26% in 2022.
That said, the conservative increase in female board participation from 19.2% in 2021 to 21.8% in 2022 in Canadian mining and 25% to 26% in North American Biotechnology shows a significant marginal year over year decrease compared to previous years. This is concerning as it might well suggest the biggest gains in female representation on a year over year basis are potentially behind us, when we are only halfway to gender parity at the board level.
When taking a closer look at Nasdaq traded Biotechnology companies that included a Board Diversity Matrix in their proxy filings, a similar trend presents itself; 16% of directors identified themselves as a visible minority in 2022. This was essentially unchanged from 2021.
When we cast a wider net across industries, the data reveals a patchwork of progress. In sectors like technology and finance, where female board representation hovers around 25%, female directors are making bigger gains. But these still relatively low numbers underscore a universal need for faster change.
The push for greater board diversity has increased substantially in the United States and Europe, with prominent asset managers adopting policies against re-electing directors and where public exchanges require board diversity disclosures and minimum thresholds. All this said, progress overall has been modest, with female participation on the boards of large, listed companies increasing from 15.5% in 2013 to 25.1% in 2021 across 50 jurisdictions.