The representation of women on corporate boards continues to improve, according to a new study by Moody’s Investors Service.
The rating agency reported that the share of corporate board seats held by women at companies it rates in North America and Europe has risen by about five percentage points over the past two years to 29% in 2022 from 24% in 2020.
The firm said that gains are likely driven by both government policy and “rising pressure from large institutional investors and asset managers to improve gender diversity in the boardroom and the executive ranks.”
Moody’s said its analysis also found that companies with higher credit ratings continue to have a higher proportion of women on their boards.
“Although the data falls short of demonstrating direct causation, we consider the presence of women on boards – and the potential diversity of opinion they bring – as being supportive of good corporate governance, which is positive for credit quality,” it said.
Additionally, it noted that its previous research has found that higher ratings are also correlated with higher shares of women in top executive roles.
While gains were evident in both markets, European companies continued to have higher proportions of women on their boards than North American firms, it said.
In North America, women held 27% of board seats, up from 22%, Moody’s reported; in Europe, women now occupy 35% of the board seats , up from 31% in 2020.
By sector, the firm found that “companies in the protein and agriculture, consumer products and utilities and infrastructure sectors have the most diverse boards in North America, with women occupying an average of about 30% of their board seats.”
In Europe, more than 40% of directors are female in the global distribution and supply chain services sector, and the business and consumer services sector, it noted.
Still, it said “the vast majority of sectors in both Europe and North America are still far from approaching boardroom gender parity, indicating that the shortfall in female representation will likely remain a front burner issue.”