Listed Companies’ Engagement with Diversity: A Multi-Jurisdictional Study of Annual Report Disclosures
115 Pages Posted: 15 Aug 2013
Date Written: August 1, 2013
The paper reports the findings of a multi-jurisdictional study on companies’ reporting of diversity practices at board level and below. It involved a review of the 2009, 2010 and 2011 annual reports of listed companies in Australia, Belgium, Norway, Spain and the UK. Some of the questions addressed in this research are: Are companies reporting the existence of corporate diversity policies in their annual reports to shareholders? How do companies define diversity? What reported evidence is there of real promotion of diversity as opposed to tokenism? How do different countries compare in their progress and reporting styles in their annual reports? Is there a difference in reported engagement between jurisdictions with mandatory gender quotas and disclosure requirements and those like Ireland and the UK with “comply or explain” rules?
Our research on board composition indicates that a mandatory quota system is more efficient in increasing female representation at board level but that non-binding quotas and diversity reporting requirements lead to progress albeit at a slower pace. Even where women are appointed to boards, there is a noted delay in appointing them to the committee chair level. Statistics concerning gender in middle and senior management are limited. In terms of defining diversity, our research indicates that gender is the most common criteria referred to in all jurisdictions. Other aspects commonly referred to are age, disability and experience. While the existence of diversity policies is commonly reported, this tends to be rather general and imprecise. The majority of companies in the UK, Norway and Belgium do not explain their rationale for reporting diversity although this situation is improving in the UK with the “business case” being cited. In terms of addressing the pipeline issue, our research indicates that in all countries reviewed disclosure of diversity policies in respect of recruitment and promotion is increasing though the figures are not high. In Australia, the UK and Spain, reporting of mentoring and work-life balance policies is also increasing. Networks such as the UK’s Women on Boards are also important to actual and aspiring board members.
Keywords: Diversity, board of directors, corporate governance, gender balance, quotas, comply or explain, hard law, soft law, non-executive directors, annual reports, stakeholders, corporate social responsibility, Action Plan on European Company Law and Corporate Governance, non-executive directors, pipeline
JEL Classification: G34, K20, K22, K31, L21, L25, M12, M14
Suggested Citation: Suggested Citation