Around the world, corporate issuers are rethinking the gender balance of their boards in response to pressure from investors and regulators. Yet in 2018, 65% of Brazil’s public company boards were still comprised entirely of men. For years now the Brazilian government has been discussing a bill to set board gender diversity quotas, but no deadline has been set and the legislation appears to be on the back burner. In the absence of government action, investors are taking the lead. A Brazilian chapter of the 30% Club was recently established, setting the following aspirational targets:
- Zero all male boards on B3’s Novo Mercado listing segment by 2020; and,
- 30% women on boards of B3’s IBrX100 listed companies by 2025.
The 30% Club was founded in the United Kingdom in 2010 with the main purpose to foster better gender balance on public companies, establishing a target of a minimum of 30% female representation on FTSE100 boards and pipeline by 2020, later broadening the scope to include FTSE350 companies. The Club has been working under the following premises:
- A measurable goal with a defined timetable;
- A supportive public policy acknowledging that the status quo was unacceptable;
- Change driven by those in power;
- Openness to collaborate; and,
- A concerted and consistent series of actions and programmes.
On this basis, the Club supports, complements and enhances issuers’ individual efforts, as well as existing initiatives towards gender balance, by spreading awareness and promoting the appointment of females to the public companies’ boards and pipeline. Chapters now exist in a total of fifteen countries and/or regions.
The expansion to Brazil reflects increasing investor focus on board composition. In February, relevant national and international funds such as Hermes, Robeco, Petros, Previ, Leblon equities, and BlackRock wrote a letter to the IBrX100 companies, stating their concern with the composition of Brazilian boards and committees and their support for initiatives aimed at improving diversity, not only in gender but also in skills and experience.
Finally, the Canada Pension Plan has issued a statement confirming that they will start voting against nomination committee chairs of companies with no women on their board. It’s worth noting that nomination committees are not mandatory in the Brazilian market, potentially limiting the scope of the threat; nonetheless, the statement conveys the strong message that shareholders are trying to put across and the seriousness of their approach to the issue of gender diversity.
Eva is an analyst covering Latin American markets.