Corporate diversity still lacking in top European firms

Large European companies may have gone global, but this is not yet reflected in their leadership according to a study by AXA Investment Managers.

The report, Future-proofing company leadership: Diversity in EuroStoxx 50 companies, shows that only 5.6% of board members are nationals from an emerging market, despite those companies seeking new growth from such markets.

The research also showed that 84% of board directors and 76 % of senior executives are European nationals. 66 % of boards are dominated by a single nationality with three companies having a board comprised solely of one nationality, BBVA (Spanish), H&M (Swedish) and ENI (Italian).

Matt Christensen, head of responsible investment at AXA Investment Managers, commented: “Corporate footprints are now global, but the boards of the companies we have analysed are, as yet, far from it. This raises a flag, particularly when it is estimated that emerging market economies will account for most of the 70m new consumers expected to enter the global middle class each year. With much of this future disposable income in the hands of women, it is important that companies have the right skillsets in place at a board level to succeed in these markets.”

Analysis of the proportion of women across the EuroStoxx 50 reveals an hourglass effect: gender balance is high at the bottom of organisations (35% of the workforce are women), decreasing when going up the hierarchy towards senior management (11% of executive committees are female), but increasing again at board level (18 % women). Thirteen of the 50 companies have no female senior executive.

Shade Duffy, head of corporate governance, at AXA IM added: “Given the growing evidence of a link between boardroom diversity and company performance it is no surprise that shareholders increasingly include diversity in their discussions with companies. Until now, diversity has largely been focused on gender. However, with the rise of emerging economies and as companies evolve to global players, we think experience in these markets will be viewed as a means to bring a broader range of views.”