More Women Were Appointed To Boards In 2021. Do They Improve Their Company’s Sustainability?

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The new Heidrick & Struggles 2022 U.S. Board Member Report found that “women comprised a record 45% of board director appointments in Fortune 500 companies.” With increased climate activist shareholders, will women on boards reduce their company's emissions? Here are some answers.

Furthermore, Heidrick’s team wrote me that, “Of women who were newly appointed to boards in 2021 – 14 percent had prior ESG experience...From 2020 to 2021, we saw ESG experience for women double.”

Boards are also increasingly looking for directors outside the traditional CEO/CFO/COO roles, as well as more ethnic diversity, the study found, to bring a range of experience and perspectives to the table, though the racial diversity numbers in board recruitment seem to have stalled.

Therefore, whether or not women board directors help reduce the company’s environmental impact depends in part on how long women stay on those boards. MSCI’s Vice President of Research“We found that, among the companies with sustained board diversity , 33.3% achieved leader status with their MSCI ESG Ratings.” For companies whose boards that didretain at least three women on the board, however, “the percentage of ESG leaders dropped by half — to 16.

 

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