Moody’s Investors Service on Tuesday said higher-rated companies have a larger proportion of women on their boards than lower-rated companies.
An analysis of 3,138 Moody’s-rated companies showed that women account for an average of 29 per cent of the board seats of investment-grade companies (those rated Baa and above), up one percentage point from 2023.
It also showed that on an average, women account for 24 per cent of the board seats of speculative-grade companies (those rated Ba and below), which is unchanged from last year.
Companies based in advanced economies reflect a correlation between board gender diversity and credit ratings, but those in emerging markets do not, it said.
This study considered 24 companies rated Aaa, 146 companies rated Aa, 728 companies rated A, 1,165 companies rated Baa, 582 companies rated Ba, 394 companies rated B, 90 companies rated Caa and nine companies rated Ca.
“The presence of women on boards and the potential diversity of opinion they bring supports good corporate governance, which is positive for credit quality. The data do not demonstrate direct causation between gender diversity and credit quality,” Moody’s said in a report.
Women hold 35 per cent of the board seats of European companies in the cohort, up from 33 per cent in 2023.
North American companies follow closely behind, with female representation on boards rising to 30 per cent from 29 per cent last year. Women account for less than 20 per cent of board seats in Latin America, the Middle East, Africa and Asia-Pacific.
Service orientated companies tend to have more diverse boards. Women hold nearly one-third of the board seats in service and consumer sectors, such as insurance, retail and business products, healthcare, pharmaceuticals, utilities and consumer products.
This is largely reflective of corporate boards in Europe and North America, where most of the companies Moody’s examined in these sectors are located, it said in the report released ahead of International Women’s Day on March 8.
