Women matter in the boardroom

This has reference to the article authored by Ms. Ailyn A. Shi entitled, “Women in corporate boardrooms: do they matter?” published in The STAR last March 20, 2022.

We note that the article – made reference to a working paper, also attributed to Ms. Shi and her colleagues, analyzing the impact of gender diversity in the board on firm performance using annual-firm level data on about 250 Philippine firms in the Philippine Stock Exchange from 2003-2014. Accordingly, the findings of the paper show that “greater gender diversity in boards has a negative or neutral impact on firm performance.”  And in fact the authors summarize that “rather, it hurts them or, at best, does not affect their performance.”

In response, I would like to share that there is more recent global and regional business case studies that underscore the compelling business benefits of increased female representation on boards and executive leadership. In fact, the Global Summit of Women cites that “to date, there are over 90 studies and reports from different countries all pointing out to a correlation between more women on boards and companies’ better financial performance.”

Moreover,  in 2019, the International Finance Corporation (IFC) analyzed six ASEAN countries, including the Philippines, with regard to their board gender diversity efforts, noting that “companies with more than 30 percent female board membership were associated with greater financial performance, compared to the companies with no women on their boards and companies where women accounted for less than 30 percent of board membership.” Further, “in companies with no women board members, the average Return on Assets (ROA) was 2.4 percent and in companies where women accounted for more than 30 percent of board membership, the average ROA was 3.8 percent.”

National efforts continue to be exerted to  improve gender parity in Philippine boards. In 2017, the Securities and Exchange Commission Philippines issued the revised Code of Corporate Governance for Publicly-Listed Companies recommending   a policy on board diversity, citing that such policy is “a move to avoid groupthink and ensure that optimal decision-making is achieved.” The SEC said that “a good example is to increase the number of female directors, including female independent directors.”

While the Philippines ranks the best among its regional peers, we recognize that more needs to be done not just from the perspective of social justice and compliance, but importantly to create  equal representation in all forms of decision-making.

We would be happy to provide more information on our work in creating gender-equal and diverse workplaces in the Philippines. – Ma. Aurora “Boots” D. Geotina-Garcia, Chair, NextGen Organization of Women Corporate Directors (NOWCD)