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

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1 AP2 Index of Female Representation in publicly-quoted companies: boards, executive managements and employees A study conducted by Nordic Investor Services, May 2016

2 AP2 Female Index Review For the third year in succession, there has been a clear increase in female representation on the boards of publicly - quoted companies, amounting to 30.7% (27.9%) in The proportion of women represented in the same companies executive managements is rising steadily and in 2016 reached 20.9%, an increase of almost 1.5 percentage points compared to the preceding year. The gap between the proportion of women in these companies executive managements and boards has increased for the third year in succession from 8.5% in 2015 to 9.8% in 2016, the highest level since records were started. At the rate of change noted over the past twelve years, it will take 25 years before women comprise 50% of company boards and 37 years before the same is true of executive managements. Should the rate of change be the same as over the past three years, women will comprise 50% of company boards after 10 years, and 50% of executive managements after 23 years. Large-cap companies account for the greatest proportion of women found on boards (34.8%) and in executive positions (22.8%). The Financial Services and Consumer sectors boast the highest number of women on their boards, at 37.5% (33.1%) and 33.0% (32.5%). The Financial Services sector continues to have the highest percentage of women on executive managements, at 30.4% (26.6%), followed by the Health sector, at 28.6% (24.6%). The Commodities sector has the lowest percentage of female board members (21.2%). The Service sector continues to feature the lowest percentage of senior female executives (12.1%). 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 publicly-quoted 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 can be referenced freely providing the 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) is positive, despite a certain levelling out in recent years. The overall percentage of women employed in these companies, generally and in Sweden, remains relatively low. Globally, there has been a modest rise in the ratio of female executives, being higher than in Sweden. Graduates * Employed in Sweden Employed globally Managers - private sector** Senior executives (Plcs) Board members (Plcs) Steady increase in ratio of senior female executives and continuing sharp rise in percentage of women on boards. *In engineering, the majority of executives are male (70%). *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. 5

6 More women on boards and in executive positions The percentage of women on the boards of quoted companies has risen sharply for the third year in succession. Since 2013, the ratio of female to male board members has increased by 8.4 percentage points Styrelser Ledningar Female representation (%) 27,9 30,7 Over the past 14 years, female representation on boards has increased by 24.6 percentage points. During this period, the female/male ratio on the boards of quoted companies has increased every year, apart from in 2008, 2012 and ,1 11,4 11,1 6,1 14,9 12,3 15,9 11,6 17,7 12,1 19,3 18,6 19,1 14,3 12,9 12,9 22,2 13,8 22,9 22,7 22,3 17,2 16,3 15,3 24,7 18,4 19,5 20,9 Women now fill almost 21% of the executive management positions in quoted companies - the highest level ever achieved. This percentage has grown steadily for the sixth year in succession, but at a lower rate than on boards. 6

Positive trend but women dropping out Women are dropping out in a series of steps, from new graduates (almost half) to employees (almost a third), to managers (a fourth), to Group management (one in

7 Positive trend but women dropping out Women are dropping out in a series of steps, from new graduates (almost half) to employees (almost a third), to managers (a fourth), to Group management (one in five). As in previous years, two steps may be observed: an operative step and one relating to boards, where women are seldom the CEO or Chair. Six of the parameters studied reveal a positive trend: employees, managers, executives, CEOs, board directors and Chairs. Percentage of women 2016 (2015) 49.9% (50.0%) 47.8% (48.0%) 34.0% (31.9%) 27.8% (26.8%) 20.9% (19.5%) 5.2% (4.5%) 30.7% (27.9%) 6.3% (5.2%) Whole population Graduates * Employees Managers Executives CEOs Board directors Chairs *Statistik från 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 286 companies studied, 202 had boards where women comprised at least 25% in 2016 (70.6% of this total group of companies), compared with 170 companies (63.4%) in Since 2002, the proportion of women on the boards of quoted companies has increased from 6.1% till 30.7% (+24.6%), while the proportion of women in executive positions has only risen from 11.1% till 20.9% (+9.8%). The ratio of female to male Chairs and CEOs remains low, although this has improved during the year. The proportion of female Chairs has increased somewhat from 5.2% to 6.3%. The ratio of female to male CEOs has also increased, from 4.5% to 5.2%. This corresponds to an additional 18 female Chairs and 15 female CEOs. 27 companies had no female directors and 80 companies had no senior female executives. 8

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

10 Percentage of women in executive management, as per market capitalization Women in executive management,

11 Percentage of women on boards and in executive management, as per market capitalization Women on boards and in executive management (%), Styrelse Ledning 11

12 Percentage of women per market cap group, 2016 STYRELSE Grupp Kvinnliga ledamöter Totalt ledamöter Andelen kvinnliga ledamöter Large cap ,8% Mid cap ,4% Small cap ,0% Summa ,7% LEDNING Grupp Kvinnor i ledningsgrupp Totalt i ledningsgrupp Andel kvinnor i ledningsgrupp Large cap ,8% Mid cap ,9% Small cap ,1% Summa ,9% 12

13 Percentage of women in all market-cap groups Large caps feature the highest percentage of female board directors (34.8%), followed by mid caps (32.4%) and small caps (25.0%). The average percentage of female board members in all marketcap groups is 30.7%. Just like last year, the percentage of women at board level has increased in all corporate groupings. Large cap, up 3.3% from last year, mid cap up 2.6% and small cap up 1.9%. At executive level, levels of female representation are rising at large and mid caps, while the level at small caps is unchanged. The mid-cap companies have posted the greatest increase, at just under 2.8 percentage points, where female representation is at 20.9%. Large caps have the highest female representation at this level, at 22.8%. At small caps, 19.1% of senior executives are female. The average percentage of female executives for all market-cap groups is 20.9%. The disparity between levels of female representation at board and executive levels has grown and has reached its highest level so far, from 8.5% to 9.8%. Large caps account for the largest gap, at 12.0% (10.3%), followed by the mid caps, at 11.4% (11.6%) and the small caps at 5.9% (4.1%). 13

14 Ratio, % Boards by sector Percentage of women on boards by sector,

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 sectors.

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 sectors. The ratio for the Commodities and Media & Entertainment sectors is low. The same applied last year. All sectors noted an increase in the ratio of female board directors. Media & Entertainment achieved the greatest increase, from 14.3% in 2015 to 21.4% in The Commodities sector remains bottom of the league with women comprising only 21.2% of company boards, despite an increase of 2.9% compared with the preceding year. 15

16 Executive positions by sector Percentage of women in executive positions by sector, Andel, % 16

Increased ratio of female executives in some sectors The percentage of women in executive positions remains highest in the Financial Services and Healthcare sectors.

17 Increased ratio of female executives in some sectors The percentage of women in executive positions remains highest in the Financial Services and Healthcare sectors. The Service and IT sectors remain at the other end of the scale, actually noting respective declines of 1.7% and 2.4%. The Financial Services sector noted the greatest increase, up from 26.6% (2015) to 30.4% (2016). All sectors have noted mixed development since percentages were first recorded in 2002, although the relative rankings of different sectors have not varied dramatically. The Media & Entertainment sector has seen the percentage of female executives vary considerably over the period since This year, the ratio of female executives fell sharply, from 27.3% (2015) to 20.0%. Being the smallest sector quoted on the stock market, however, it is sensitive to even small variations in the number of women on executive managements and boards. 17

18 Percentage of women by sector, 2016 STYRELSE Bransch Kvinnliga ledamöter Totalt ledamöter Andelen kvinnliga ledamöter Finans ,5% Konsumentvaror ,0% Tjänster ,2% Industri ,1% Telekommunikation ,0% IT-företag ,0% Hälsovård ,9% Media och underhållning ,4% Råvaror ,2% Summa ,7% LEDNING Bransch Kvinnor i ledningsgrupp Totalt i ledningsgrupp Andel kvinnor i ledningsgrupp Finans ,4% Hälsovård ,6% Telekommunikation ,8% Konsumentvaror ,3% Media och underhållning ,0% Råvaror ,3% Industri ,1% IT-företag ,4% Tjänster ,1% Summa ,9% The Financial Services sector leads both in terms of female board members and senior executives. The Consumer and Service sectors enjoy a high ratio of female board members. The Healthcare and Telecom sectors have a high percentage of female executives. The Media & Entertainment sector offers a lower number of posts in total, so that even a limited change in the percentage of women can have a major impact on the end result. 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,

Global female employees, by sector Globally, the highest ratio of female to male employees is found in the Healthcare, Consumer and Financial Services sectors, where they constitute a slight majority.

22 Global female employees, by sector Globally, the highest ratio of female to male employees is found in the Healthcare, Consumer and Financial Services sectors, where they constitute a slight majority. Female employees account for just over a quarter of total employees in the Service, Commodities and Telecoms sectors. The Industrial sector features the lowest ratio of female employees, accounting for a fifth of the total workforce. 22

23 Female employees in Sweden, by sector Ratio, % Percentage of female employees in Sweden, by sector

Female employees in Sweden by sector, 2016 The Healthcare sector boasts the highest ratio of female employees in Sweden, with just under 70% of the workforce being female.

24 Female employees in Sweden by sector, 2016 The Healthcare sector boasts the highest ratio of female employees in Sweden, with just under 70% of the workforce being female. In the Consumer and Financial Services sectors, 50% of employees are female. The Industrial and Commodities sectors feature the lowest ratio of female employees, accounting for only a fifth of the workforce. 24

25 Ratio, % Ratio of female executives, by sector Ratios for female employees and female executives, by sector Anställda Ledning 25

26 Percentage of female representation varies between market cap groups and sectors Mid caps have for the first time a higher percentage of female employees than the small and large-cap companies. The percentage of women in mid-cap companies has risen from 33.1% to 38.4%. In contrast, the large-cap and small-cap companies have noted a slight decline compared to last year. Women now comprise at least 30% of all market cap groups in Sweden. Globally, small caps have the highest percentage of women employees, at 44.3%. In Sweden, only the Consumer, Healthcare and Financial Services sectors have a majority of women employees. In the Industrial and Commodities sectors in Sweden, female employees account for only 20% of the workforce, the lowest level among all sectors. The Service and IT sectors feature few women in executive posts, at just over 12%, in contrast to the 28.6% noted by the Healthcare sector. Apart from the Service sector, sectors with a high percentage of female employees often feature a high percentage of female executives. All sectors feature a higher percentage of female employees than female executives. 26

Ratio of women on boards, excluding CEOs The ratio of women on the boards of all Swedish quoted companies, excluding CEOs, is 32.4%, equivalent to a 2.9% increase compared with the preceding year.

27 Ratio of women on boards, excluding CEOs The ratio of women on the boards of all Swedish quoted companies, excluding CEOs, is 32.4%, equivalent to a 2.9% increase compared with the preceding year. Ratio, % Female ratio, excl. CEOs The ratio of women on the boards of premium Nasdaq Stockholm listings, excluding CEOs, is 33.6%, equivalent to a 2.9% increase compared with the preceding year. 27

Ratio of women, based on average age of boards 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).

28 Ratio of women, based on average age of boards 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 71 companies. In general, the ratio of women on company boards is relatively evenly spread across all four quartiles, where Quartile 4 posts the greatest deviation, noting the lowest percentage of female directors. The second and third quartiles feature the highest percentage of women directors, at 32.7% and 32.6% respectively, with the fourth having the lowest, at 25.7%. Genomsnittlig ålder Kvartil 1 41,400-54,000 Kvartil 2 54,143-56,571 Kvartil 3 56,667-59,429 Kvartil 4 59,500-68,500 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. 28

29 Ratio of women based on average age of executive management Each quartile comprises some 71 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 first quartile (24.3%), where the average age is lowest. The ratio of senior female executives declines as the average age of executive management rises. The ratio of women in senior executive positions is notably lowest in executive managements with the highest average age. Genomsnittlig ålder Kvartil 1 38,000-47,300 Kvartil 2 47,333-50,000 Kvartil 3 50,250-52,600 Kvartil 4 52,667-62,400 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. 29

Newly-elected female directors (%), 2016 The boards of the companies quoted on Nasdaq Stockholm comprise some 1 918 seats. Of these, 1 622 seats (equivalent to 84.

30 Newly-elected female directors (%), 2016 The boards of the companies quoted on Nasdaq Stockholm comprise some seats. Of these, seats (equivalent to 84.6% of all seats available) are held by board directors who have been re-elected,. 296 of the seats on boards are occupied by newly elected directors. Of these, 133 are held by women and 163 by men. On average, there is a five-year age difference between re-elected and newly elected directors. 30

Directorships per board member, 2016 1 483 individual board members hold 1 918 directorships. Board members hold an average of 1.29 directorships. Women hold an average of 1.

31 Directorships per board member, individual board members hold directorships. Board members hold an average of 1.29 directorships. Women hold an average of 1.42 directorships per director. Men hold an average of 1.24 directorships. The number of directorships held by board members varies from one to seven. Of the total individual directors, (81.3%) hold only single directorships. The remaining 273 hold between two and seven directorships. 31

32 Methodology and data (1 of 2) 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 286 companies quoted on Nasdaq Stockholm, both premium and standard listings Chairs: 286 Other board members elected by AGMs: Boards/total seats: Members of executive committees: CEOs: 286 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 2016, and compared with May 2015, May 2014, May 2013, June 2012, 2011, , May 2008, 2007, 2006, 2005, 2004, July 2003 and December

33 Methodology and data (2 of 2) 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. In some cases, data relating to sub-categories is incomplete, however, making an entirely reliable result impossible. Consequently, the figures pertaining to the percentage of female managers shown in the transparency entitled Positive trend but women dropping out should be seen as indicative. A new item in the 2015 survey, which has even been implemented in the 2016 survey, involves an attempt to determine the possible relationship between the average age of executive managements/boards and the ratio of women to men. This result is not compared with the result for 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 71 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 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. 33

Appendix 1: Statistics for premium listings Female representation (%), primary listings only Comparative figures for the ratio of women on boards and executive managements of premium listings in the

34 Appendix 1: Statistics for premium listings Female representation (%), primary listings only Comparative figures for the ratio of women on boards and executive managements of premium listings in the years 2013, 2014, 2015 and The number of premium listings totalled 261. Twenty five secondary listings have been excluded. Compared to last year, the percentage of women on boards and executive managements has risen. The number of female Chairs has increased by five, while the number of female CEOs has increased by three.

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

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