Gender Diversity: Realizing Europe’s Potential

Published on: 7 July 2016

As a follow-up on the quantitive analyses of European Women on Boards in april 2016 a qualitative study on board gender diversity was published this July. It is based on interviews with twenty important business and governance leaders from across Europe, comprised of board members from large listed companies, institutional investors, and others. On behalf of APG David Shammai shared his vision on the subject.


Key findings

  1. Both European companies and investors are increasingly convinced that a well-diversified board adds value to the company.
  2. There is a growing body of evidence which makes the business case that board gender diversity can provide a competitive advantage.
  3. In addition to implementing best practices to improve overall Board gender diversity, many European companies are now sharpening their focus on developing the executive leadership pipeline for women.
  4. Board gender diversity provides a governance and management quality signal for an increasing number of mainstream institutional investors.
  5. Investors report that the focus on gender diversity has contributed to a higher standard of professionalism by encouraging the nomination committee to more fully consider the board’s needs in terms of the balance of skills and experience.

Board gender diversity in integrated engagement and active ownership strategies at APG Asset Management

At APG Asset Management in the Netherlands, the approach to gender diversity is mainly reflected in its engagement activities, with both social as well as governance considerations at the fore. Board gender diversity is viewed as one important form of diversity amongst several. Engagement with portfolio companies is often carried out jointly by the portfolio managers in conjunction with the responsible investment and governance team, which use a variety of ESG data screens to inform input. Diversity throughout the organization is more of a social issue that underpins companies’ long-term legitimacy and thus is a sustainability issue.

David Shammai, Senior Corporate Governance Specialist APG, highlights effecting change appropriately, which involves weighing up a variety of priorities. In the context of board gender diversity in Europe, APG is seeing a growing number of cases where the need to appoint women directors has led to the nomination of over-boarded directors. "This puts shareholders in the very uncomfortable position of having to make a choice effectively between lack of diversity and overly busy directors who don’t have sufficient time to meet their board responsibilities. We believe that this is not good for board effectiveness and probably also not good for credible diversity." APG expects companies in these cases to broaden their choice of director candidates further. "For example, for some companies where language is seen as a barrier to diversify board selection, perhaps it makes sense to have non-nationals as directors, even if they are non-native, yet fluent, speakers of the national language."