The US now lags Europe in board diversity, according to a recent article in the Wall Street Journal noting that government mandates in European countries such as France and Germany have dramatically increased female board representation in Europe. France requires blue-chip firms to fill 40% of board seats with women, while Germany requires that women hold 30% of board seats for the top 100 publicly traded companies; Norway, the Netherlands, Italy and other European countries have similar mandates.
As a result, the US is now behind France, Italy, Germany and Switzerland for representation of female directors, despite intensifying pressure from shareholders to make board diversity a priority. BlackRock is now calling for all its portfolio companies to have at least two female directors, and the New York State Common Retirement Fund has vowed to vote against directors of boards with no women. The Fund, the third largest pension fund in the US and a member of the Thirty Percent Coalition, which has a stated goal of 30% female board representation for all US public companies, also recently announced agreements with four Fortune 500 companies to formally include gender and ethnic diversity in board considerations (in exchange, the Fund withdrew shareholder proposals filed at each company).
Shareholder efforts, however intensified, are a far cry from a legislative mandate, and there has been little investor support for European-style quotas by mainstream investors. As State Street Global Advisors' Rakhi Kumar noted, "You don't want to create unintended practices." State Street voted against hundreds of directors last year who failed to make "any significant effort" to add women to their male-only boards, but reported that 152 companies they engaged with added at least one female director.