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Examining efforts to boost women representation on company boards.
You may have missed the headline at the turn of the year heralding some positive news: A record 32% of S&P 500 board seats are now held by women, up from 30% the previous year. It is good news. But it reminds me how far we still have to go—and left me wondering about the pace of the biopharmaceutical industry’s own journey toward more gender-equitable boards of directors.
We have all seen the data: Diverse-led companies are more likely to have greater financial returns than their less-diverse industry peers. And we also know that major investors, proxy advisors, and stock exchanges are pressing for change.
As a new public company, Organon was faced with the challenge and the opportunity to recruit its entire board of directors at the same time. The result of the company’s intentional process was a group of highly distinguished and highly diverse directors. With 70% women, Bloomberg just recognized Organon as having the most female board members for any S&P 500 company.
But what are the broader trends in board diversity across large pharma? I worked with a team to review gender representation on the boards of the top five pharmaceutical companies (based on market capitalization and GICS sub-industry classification) in the US and Europe as well as the top three pharmaceutical companies in Japan. We looked at public information included in proxy statements, annual reports and 10-Ks, and environmental, social, and governance (ESG) or sustainability reports in 2010, 2015, 2020, and the most recently available information to conduct the analysis.
The data reflect an industry that is changing—but at an uneven pace across time and regions. Here are some of the findings:
This snapshot of gender diversity on pharma’s boards offers a moment of reflection as we stand at the juncture of so many changing forces. The policy environment continues to change; the European Parliament, for example, recently adopted a new EU directive on gender balance on corporate boards. Women’s economic empowerment initiatives are finding significant resonance. The importance of diversity in clinical trials is widely acknowledged, as are the wide gaps in women’s health innovation. Finally, the pandemic has had a dramatic and disproportionate impact on women’s careers.
The pharma industry has made significant progress in the past two decades, demonstrated by the large companies we analyzed moving from an average of 16% of women on their governing boards in 2010 to 32% today. But we can do better. Both business and society demand that we pick up the pace.
Geralyn Ritter, head of external affairs and ESG at Organon and author of Bone by Bone. In this role, she focuses on guiding and shaping how the company interacts with key stakeholders and the environment.