AP2 Index of Female Representation in publicly-quoted companies: boards, executive managements and employees

Transcription

1 AP2 Index of Female Representation in publicly-quoted companies: boards, executive managements and employees A study conducted by Nordic Investor Services, May 2018

2 AP2 Female Index Review For the fifth year in succession, there has been a clear increase in female representation on the boards of publiclyquoted companies, rising to 33.9% (32.2%) in The proportion of women represented in the same companies executive managements continues to rise and in 2018 reached 23.2% (21.7%). The number of female CEOs rose sharply during the year: from * 15 to 27*, an increase of 80%. Seen as a percentage of all CEOs, however, the level remains low: 8.4% (4.9%). Large cap companies account for the greatest proportion of women found on boards (37.7%) and in executive positions (25.8%). If CEOs are not included, women account for 39.8% of large cap boards and as much as 41.2% of the boards of the Premium listed large cap companies. The Financial Services and Consumer Goods sectors boast the highest number of women on their boards, at 38.6% and 36.0% respectively. The Financial Services and Healthcare sectors feature the highest percentage of senior female executives, at 33.3% and 29.4%. The Utilities sector notes the lowest proportion of female board members and senior executives, at 11.1% and 0.0%, followed by the Oil & Gas sector, where women account for 22.5% of board members and 10.0% of the sector s senior executives. 274 of the seats on boards are held by newly elected directors, 44.9% of whom are women. The majority (58.6%) of publicly quoted companies have no women on their nomination committees. 122 companies feature at least one woman on their nomination committees. Women make up 38.8% of the boards of these companies. *Includes the retirement of a female CEO after a male CEO had been appointed but was yet to take over. 2

3 Background: AP2 Female Index As a long term institutional investor, the Second Swedish National Pension Fund/AP2 is keen to develop effective techniques of corporate governance and is therefore interested in contributing to a balanced debate on how the proportion of women on the boards of publiclyquoted Swedish companies can be increased. Previously, however, no instruments have been available for gauging progress relating to the proportion of women represented on boards and in executive management at sector and corporate levels. This is why AP2 launched its Female Representation Index in January 2003, to compile detailed data on the proportion of women represented on boards and in executive positions at Swedish publicly quoted companies. The Index is based on the assumption that the boards of Swedish quoted companies recruit their members from personnel who occupy leading positions in these companies. Measuring the proportion of women both in executive positions and in these quoted companies as a whole provides a good basis for judging the degree to which the recruiting base for Swedish boards has developed over time. Statistics showing the percentage of women studying engineering, economics and law, compared to the percentage occupying management positions in the private sector*, provides an indication of the extent to which women drop out of the job market, despite their qualifications and experience. The data has been accumulated since 2002 and is updated every year. This material will be made available to our portfolio companies, the media and other stakeholders and via the AP2 website ( and may be referenced freely providing statement of the following source : Andra AP fonden/nordic Investor Services 3

4 Recruitment supply chain Board Chair CEO Manager Executive Management Employee Basically, I look for former or active CEOs, and I rely on the fact that the recruitment base will grow sufficiently from one year to the next, as active CEOs retire. Chair of a publicly quoted company (Source: Sjöstrand, Petrelius: Recruitment of Group boards ) University graduate 4

5 Positive trend in female representation The long term trend for women graduates (economics, engineering*, law) remains positive, now at 49.9%. 50% 45% 40% Graduates* Still stable but relatively low ratio of female employees in Swedish publicly listed companies, mainly globally but also in Sweden, despite the positive trend. 35% 30% 25% 20% Employed in Sweden Employed globally Managers - private sector** Female employees at almost 35% globally, if somewhat higher in Sweden. Steady increase in ratio of senior female executives and continuing sharp rise in percentage of women on boards. 15% 10% 5% 0% Senior executives (Plcs) Boards (Plcs) Graduates Managers private sector (up to 2013) Senior executives (Plcs) Boards (Plcs) Managers private sector (from 2014) Employed globally Employed in Sweden * Statistics from SCB ** Due to changes in SCB s classification of occupations as of 2014, the percentage of female executives in the private sector may not be compared to previous years and a new series of classifications has been introduced. * In engineering, the majority of executives are male (67%). 5

6 More women on boards and in executive positions The percentage of women on the boards of quoted companies has noted a clear rise for the fifth year in succession. Since 2013, the ratio of female to male board members has increased by 11.6 percentage points, to 33.9%. Women now fill 23.2% of the executive management positions in quoted companies the highest level ever achieved. This percentage has risen steadily for the eighth year in succession, although at a lower rate than for boards. The difference in the proportion of women on boards and in senior executive positions is 10.8%, being the highest figure recorded to date. Given the same rate as the past 14 years, it will take 22 years before boards and 33 years before executive managements achieve 50% female representation. At a rate equivalent to that noted for the past 5 years, it will take 12 and 24 years respectively. Andel, % Female representation 6

7 Positive trend but women dropping out Compared to the preceding year, the ratio of women to men has risen in all the parameters studied. As in previous years, however, women continue to drop out by stages, from new graduates (half) to employees (just over one in three), to managers (just over one in four), to Group management (just over one in five). As noted earlier, two steps may be observed: an operative step and that relating to boards, where women are seldom the CEO or Chair. The trend is nevertheless positive. Percentage of women 2018 (2017) 49.8% (49.8%) 49.9% (48.6%) 34.6% (33.4%) 28.4% (26.5%) 23.2% (21.7%) 8.4% (4.9%) 33.9% (32.2%) 8.8% (6.2%) Whole population* * Graduates* * Employees Managers* * Executives CEOs Board directors Chairs *Statistics from SCB 7

8 Rising percentage of women on boards and in executive positions The number of companies in which women account for 25% of board members is increasing. Of the 320 companies studied, 243 feature boards where women comprise at least 25% of the directors (79.7% of this total group of companies), compared with 224 companies (73.4%) in Since 2002, the proportion of women on the boards of quoted companies has increased from 6.1% till 33.9% (+27.8%), while the proportion of women in executive positions has only risen from 11.1% to 23.2% (+12.1%). The difference between the proportion of women on boards and in senior executive positions is growing, now being at its highest level ever, from 10.5% in 2017 to the current 10.8%. The number of companies with a female Chair rose from 19 to 28 during the year. The percentage of companies with a female Chair amounts to 8.8% * (6.2%). There has been a sharp rise in the number of female CEOs during the year: from 15 to 27*, an increase of 80%. As a percentage of all CEOs, this continues to be a low ratio: 8.4% (4.9%). The number of companies lacking any female board directors has almost halved, to 12 (22) companies. The number of companies with no senior female executives fell slightly to 79 (82). *Includes the retirement of a female CEO after a male CEO had been appointed but was yet to take over. 8

9 Percentage of female board members, as per market capitalization Ratio, % Women on boards (%),

10 Percentage of women in executive management, as per market capitalization Ratio, % Women in executive management (%),

11 Percentage of women on boards and in executive management, as per market capitalization Ratio, % Women on boards and in executive management (%), Board Executive Management 11

12 Percentage of women per market cap group, 2018 BOARD Group Female directors Total directors Ratio of female directors,% Large cap % Mid cap % Small cap % Total % EXECUTIVE MANAGEMENT Group Senior female executives Total senior executives Ratio of female senior executives,% Large cap % Mid cap % Small cap % Total % 12

13 Percentage of women in all market-cap groups Large caps feature the highest percentage of female board directors (37.7%), followed by mid caps (34.2%) and small caps (28.0%). The average percentage of female board members in all marketcap groups is 33.9%. The percentage of women at board level has increased in all market cap groups: large cap up 0.6 percentage points, mid cap up 1.2 percentage points and small cap up 3.2 percentage points. Levels of female representation at the executive level also rose for all market cap groups. Mid caps posted the greatest increase at 1.8 percentage points, where 21.6% of executives were female. The ratio of women in small caps has increased by 1.4 percentage points to 21.3%. Large caps posted an increase of 0.9 percentage points to 25.8%. The average ratio of female representation on executive managements in all publicly quoted companies is 23.2%. Mid caps account for the largest change, at 12.6% (13.2%), followed by the large caps, at 11.8% (12.2%) and the small caps at 6.7% (4.8%). The change noted for all market cap groups is 10.8%. 13

14 Ratio, % Boards by sector Percentage of women on boards by sector, * A review of sector classifications was conducted to improve harmonization of sector designations with Nasdaq Stockholm s terminology. This resulted in a reclassification of companies, the loss of certain sectors and the establishment of two new sectors, Utilities and Oil & Gas. As a consequence of this reclassification process, a new timeline applies from Note that this timeline is not comparable to previous years. 14

15 Increased percentage of female board directors across all sectors The sectors with the highest percentage of female board directors are the Financial Services and Consumer Goods sectors, with 38.6% and 36.0% respectively. The Utilities and Oil & Gas sectors post the lowest ratio of women on their boards, at 11.1% and 22.5% respectively. Numerically, these sectors are among the smallest on the stock exchange, making them sensitive to slight variations in the percentage of women on their boards. Oil & Gas achieved the greatest increase, from 17.5% in 2017 to 22.5% in Commodities also noted an increase of 3.9 percentage points compared with the preceding year. Services saw a decline of 0.4 percentage points compared with Ratio, % Female representation on boards 2018 (%), by sector. 15

16 Ratio, % Executive positions by sector Percentage of women in executive positions by sector, * A review of sector classifications was conducted to improve harmonization of sector designations with Nasdaq Stockholm s terminology. This resulted in a reclassification of companies, the loss of certain sectors and the establishment of two new sectors, Utilities and Oil & Gas. As a consequence of this reclassification process, a new timeline applies from Note that this timeline is not comparable to previous years. 16

17 Sectors note increased ratio of female executives The percentage of women in executive positions remains highest in the Financial Services sector, followed by the Healthcare and Services sectors. The Utilities and Oil & Gas sectors are at the other end of the scale. The ratio of female to male executives has increased most in the Commodities sector, from 22.5% in 2017 to 25.6 % in The Utilities sector has no female executives. Numerically, the Utilities and Oil & Gas sectors are among the smallest on the stock exchange, making them sensitive to slight variations in their ratios of female executives. All sectors have noted mixed development since figures were first recorded in Historically, however, Financial Services and Healthcare have noted the highest percentage of senior female executives. The percentage of female executives in both these sectors has increased by 2.7 percentage points. The ratio of female executives in the Consumer Goods sector has declined by 1.9 percentage points compared to Andel, % Ratio of female executives in 2018, by sector 17

18 Percentage of women by sector, 2018 The Financial Services sector still leads both in terms of female board members and senior executives. The Consumer Goods and Technology sectors continue to enjoy a high ratio of female board members. The Healthcare and Services sectors have a high ratio of female executives. The Utilities, Oil & Gas and Telecoms sectors have a lower number of positions overall, so that a slight change in absolute terms has a major impact on the results. BOARD Sector Female directors Total directors Ratio of female directors, % Financial Services % Consumer Goods % Technology % Services % Industrial % Healthcare % Telecoms % Commodities % Oil & Gas % Utilities % Total % EXECUTIVE MANAGEMENT Sector Female execs Total execs Ratio of female execs, % Financial Services % Healthcare % Services % Telecoms % Commodities % Consumer Goods % Industrial % Technology % Oil & Gas % Utilities % Total % 18

19 Total global employees, by market cap group Ratio, % Percentage of female employees by market cap group,

20 Employees in Sweden, by market cap group Ratio, % Percentage of female employees by market cap group,

21 Global female employees, by sector Ratio, % Percentage of female employees by sector, A review of sector classifications was conducted to improve harmonization of sector designations with Nasdaq Stockholm s terminology. This resulted in a reclassification of companies, the loss of certain sectors and the establishment of two new sectors, Utilities and Oil & Gas. As a consequence of this reclassification process, a new timeline applies from Note that this timeline is not comparable to previous years. One example of this is the high ratio of women in Services, explained in part by the fact that companies with many employees but a relatively low ratio of women (Securitas) have been reclassified and replaced by companies with many employees and a high ratio of women (H&M ). 21

22 Global female employees, by sector Globally, the highest ratio of female to male employees is found in the Services sector, where they constitute the majority. The ratio of female employees has increased by 1.8 percentage points compared to the preceding year. Female employees are in a slight majority in the Healthcare and Financial Services sectors. The ratio of female employees in Healthcare has risen by 2.2 percentage points compared to the preceding year. The Commodities, Oil & Gas, Industrial and Technology sectors feature the lowest ratio of female employees, where they account for about a fifth of the total workforce. Ratio, % Percentage of global female employees by sector,

23 Female employees in Sweden, by sector Ratio, % Percentage of female employees in Sweden, by sector * A review of sector classifications was conducted to improve harmonization of sector designations with Nasdaq Stockholm s terminology. This resulted in a reclassification of companies, the loss of certain sectors and the establishment of two new sectors, Utilities and Oil & Gas. As a consequence of this reclassification process, a new timeline applies from Note that this timeline is not comparable to previous years. 23

24 Female employees in Sweden by sector, 2018 The Healthcare sector still boasts the highest ratio of female employees in Sweden, 70.7% of the workforce being female. In the Services and Financial Services sectors, female employees are still in the majority. Nevertheless, the ratio of female employees in these two sectors fell by 0.8 and 3.1 percentage points respectively, compared to the preceding year. This year too, the Commodities and Industrial sectors again feature the lowest ratio of female employees, accounting for approximately a fifth of the workforce. Ratio, % Female employees in Sweden by sector,

25 Ratio of female executives, by sector Ratio, % 80 Ratios for female employees and female executives, by sector Employees 10 Executives Technology Telecoms Financial Services Commodities Consumer Goods Industrial Oil & Gas Services Healthcare Utilities The Commodities sector features a higher proportion of senior female executives than of female employees in general. 25

26 Percentage of female representation varies between market cap groups and sectors Mid caps, for the third year in succession, have a higher percentage of female employees than the small and largecap companies. The percentage of women in mid cap companies has risen from 43.6% till 46.8%, and for small caps from 39.9% till 41.0%. The large caps have seen an increase from 28.8% to 33.8%. In global terms, mid caps feature the highest proportion of female employees, at 43.1%, followed by small caps at 39.6%. The global percentage of female employees at large caps is 33.1%. All market cap groups have noted an increase in female representation. In Sweden, only the Healthcare, Services and Financial Services sectors have a majority of women employees. In the Industrial and Commodities sectors in Sweden, female employees account for just over 20% of the workforce, the lowest level among all sectors, which has also historically been the case. The Utilities sector features no senior female executives at all, followed by the Oil & Gas, Technology and Industrial sectors, where women account for only 10%, 15.7% and 16.7% of their respective executive managements. The highest percentage of senior female executives is found in the Financial Services and Healthcare sectors. Sectors with a high percentage of female employees often have a higher percentage of female executives. Apart from the Commodities sector, all sectors have a higher percentage of female employees than female executives. 26

27 Ratio of women on boards, excluding CEOs Ratio, % Female ratio, excl. CEOs The ratio of women on the boards of all Swedish quoted companies, excluding CEOs, is 35.4%, equivalent to an increase of 1.6 percentage points compared with the preceding year. The ratio of women on the boards of Premium Nasdaq Stockholm listings, excluding CEOs, is 36.3%, equivalent to an increase of 1.1 percentage points compared with the preceding year. According to the classification of market cap groups for 2018, the ratio of women on the boards of Premium large cap Nasdaq Stockholm listings, excluding CEOs, amounts to 41.2%. Ratio, % Mid caps have noted slight increases compared to Exchange quoted small caps noted an overall 3.0% increase in the ratio of female directors, while Premium listings noted a 3.3% rise. 27

28 Ratio of women, based on average age of boards, 2018 The companies are arranged in ascending order, according to the lowest average age of their board (Quartile 1) to the highest average age (Quartile 4). Each quartile comprises some 80 companies. In general, the ratio of women on company boards is relatively evenly spread across all four quartiles, Quartile 4 (boards with highest average age) noting the greatest deviation, with a notable lower ratio of female directors. This said, women comprise more than 30% of the directors for all quartiles. Ratio, % Ratio of women, based on average age of board The second and third quartiles feature the highest percentage of women directors, at 35.6% (34.0%) and 33.9% (32.7%) respectively, with the fourth having the lowest, at 30.9% (26.7%). NB: The average ages and percentages of women in each quartile are calculated as the average for the company, not the number of seats on the board. Average Age Quartile Quartile Quartile Quartile

29 Ratio of women based on average age of executive managements 2018 Each quartile comprises some 80 companies, arranged in ascending order, according to the lowest average age (Quartile 1) to the highest average age (Quartile 4). The ratio of women executives is highest in the second quartile 26.1 % (22.3%), where the average age is relatively low. The ratio of senior female executives is similar for the first and third quartiles, but notably lower in the fourth quartile, with executive managements that feature the highest average age. Ratio, % Ratio of women, based on average age of executive managements NB: The average ages and percentages of women in each quartile are calculated as the average for the company, not the number of seats on the board. Average Age Quartile Quartile Quartile Quartile

30 Newly-elected directors (%), 2018 Newly elected directors, % The boards of the companies quoted on Nasdaq Stockholm comprise some seats. Of these, seats (equivalent to 87% of all seats available) are held by board directors who have been re elected. 274 of the seats on boards are occupied by newly elected directors. Of these, 100 are held by women and 174 by men. Genomsnittlig ålder styrelseledamöter Average age board members On average, there is a four year age difference between re elected and newly elected directors. 30

31 Directorships per board member, individual board members hold directorships. Average number of directorships per director 2017 Board members hold an average of 1.30 directorships, which is unchanged from the preceding year. Women hold an average of 1.39 (1.42) directorships per director. Men hold an average of 1.24 (1.25) directorships. The average number of directorships for women and men remains largely the same compared to the preceding year. Number of directorships per director The number of directorships held by board members varies from one to seven. Of the total individual directors, (81.2%) hold only single directorships. The remaining 308 hold between two and seven directorships. 31

32 Female representation on nomination Of some 320 quoted companies, 295 have clearly established nomination committees. These companies comprise both Premium and Standard listings. Women make up 13.0% of these nomination committees. committees, 2018 Female ratio on nomination committees Women chair 11.2% of these nomination committees. Number of women on nomination committees A majority of quoted companies (58.6%) have no women on their nomination committees. Just over 10% have two or more. 32

33 AG1 Ratio of female directorships compared to composition of nomination committees, companies lack clearly established nomination committees, 12 of which are Standard listings. Women account for 23.5% of the seats on the boards of these 25 companies. Ratio of female directorships 173 companies have no women on their nomination committees. Women hold 31.9% of the seats on the boards of these 173 companies. 122 companies feature at least one woman on their nomination committees. Women hold 38.8% of the seats on the boards of these companies. Companies without NC Companies without women on NCs Companies with women on NCs 33

34 Slide 33 AG1 Återkom med vilken text som önskas i grafen Anna Grimfors;

35 Methodology and data (1 of 3) Apart from the quartile comparisons, we record the number of board seats and people in executive positions, together with the number of total employees. Board: number of women/total number of board directors elected at the AGM Executive management: number of women/members of the executive committee. Employees (in Sweden and globally): number of women/number of employees. 320 companies quoted on Nasdaq Stockholm, both Premium and Standard listings. Chairs: 320. Other board members elected by AGMs: Boards/total seats: Members of executive committees: CEOs: 320. Other senior executives: Total senior executives: Data for companies with AGMs scheduled during the second half of the year has been compiled from the most recently available minutes and annual reports. The number of seats held by women on a board is based on the composition of the board as of May 2018, and compared with May 2017, 2016, 2015, 2014, 2013, June 2012, 2011, 2010, 2009, May 2008, 2007, 2006, 2005, 2004, July 2003 and December

36 Methodology and data (2 of 3) The data has been compiled from statistics supplied by Sweden s Statistiska Centralbyrån (SCB/Statistics Sweden) and the corporate annual reports, as well as minutes/notices. As of 2014, SCB/Statistics Sweden introduced a new classification of professional groupings (SSYK 2012) and initiated a new time frame. Consequently, the earlier data for senior executives in the private sector can no longer be reliably compared with data from previous years. This has led to the introduction of a new time frame, presenting data on senior executives in the private sector. A new item in the 2015 survey, which has even been implemented in the 2018 survey, involves an attempt to determine the possible relationship between the average age of executive managements/boards and the ratio of women to men. Both the average age and the relative ratios of women have been calculated for the boards and executive managements of all Swedish quoted companies. The results have then been compiled, ranging from the lowest to the highest average age. The results are presented in quartiles, each quartile comprising some 80 companies. In cases where the CEO also holds a seat on the board of the same company, he or she is excluded from the calculated total of board directors. A new item in the 2016 survey, also implemented for 2018, concerns the percentage of newly elected directors on the boards of quoted companies and the female/male ratio. Furthermore, data has been compiled on the number of directorships per director, and their relative distribution between men and women. 35

37 Methodology and data (3 of 3) An addition made in 2017, also implemented in 2018, is the introduction of the ratio of female directorships per market cap group, excluding CEOs, for all companies and for Premium listings. Prior to compiling the data for 2017, sector groupings were revised to align the sector classification of quoted companies with the industry classifications employed by Nasdaq Stockholm. The review also comprised quoted companies from 2015 and This led to the following: Some companies were reclassified under a new sector, affecting trend perceptions. The Oil & Gas and Utilities sectors were added. Companies in these sectors had previously been classified as belonging to the Commodities and Industrial sectors. The IT and Media & Entertainment sectors were removed, but have been retained in relevant diagrams to illustrate trends in the period As a consequence of this reclassification process, a new timeline was initiated from 2015, as subsequent data could not be compared to previous years. An addition for 2018 addresses the composition of nomination committees. This analysis has focused on the number of seats held by women on nomination committees. The following should be noted: The companies operating these nomination committees feature both Premium and Standard listings. Premium listings that lack a nomination committee and thereby deviate from the Code, often motivate this discrepancy due to the concentrated ownership structure. 36

38 Appendix 1: Statistics for Premium listings Ratio, % Female ratio, Premium listings only Comparative figures for the ratio of women on boards and executive managements of Premium listings for 2013 to The number of Premium listings for 2018 totalled 295. Twenty five Standard listings have been excluded. The ratio of women on boards is 1.0 percentage points higher for Premium listings, compared to all quoted companies (33.9%). The equivalent for executive managements is 0.2 percentage points (23.2%). * 27 companies (9.2%) are chaired by women and 26 companies (8.8%) have a female CEO. *Includes the retirement of a female CEO after a male CEO had been appointed but was yet to take over. 37