Who's Got the Most Women on Bank Boards? Surprise! China!

Quick: which country is the most enlightened when it comes to the diversity of bank boards?

Personally, I'd guess one of those cheerfully feminist Nordic Amazon countries, like Denmark.

That goes to show how much I know. It's China, according to an analysis just released by Corporate Women Directors International, part of GlobeWomen, a nonprofit that advocates for women in leadership around the world.

The 31 banks at the top of the Fortune Global 200 listings actually made some progress, boosting the proportion of women directors from 10.6% in 2004 to 15.6% now. China Construction Bank had six women, accounting for 30% of its directors, and the Chinese bank boards averaged 19% women.

CWDI Chair Irene Natividad explained this puzzling finding.

Irene, I confess, I'm really surprised. What was your reaction when you discovered that the Chinese banks were ahead of everyone else in terms of board gender diversity?
Who would have known that China would be the pace setter? In the course of organizing the last global summit for women, I marveled at how far ahead of everyone else the Chinese were. It's not just that they have the highest percentage of women on boards. Someone could say, yes, that's because Chinese women tell everyone what to do. But two foreign women are on their boards.

There are lots of American banks that make a sizable chunk of their revenues outside the U.S. But it's rare that they have multinationals on their boards. The Chinese not only exceeded in terms of numbers but also in terms of board composition.

Why?
They're visionaries. They seem to be including women who have insight into the markets in which they're interested.

What's the excuse, then for American banks?
None! Who are the majority of workers at American banks? Women. Who are the majority of those who get accounting degrees? Women. What is the biggest growth market? Women. It's not like there isn't a pipeline. It's not like there's aren't qualified women. Wells Fargo, with 26.7% women directors, was the only U.S. bank in the top five, after two French banks, a German bank and China Construction Bank, which has six women, for 30% of its directors.

At a time when banks need to restore their reputations, it's a great time to change the faces on their boards. You'd think they'd do that, but they aren't.

What are they doing right in France?
They have a proposed quota law, that is passed in the lower house but not in the senate. But to get ahead of the legislation, the four French banks are appointing women in numbers greater than in times past. There are a lot more countries applying quotas than people realize. That seems to be the way that will change the board composition..

Maybe the real takeaway is that all you have to do is threaten quotas
The real takeaway is that there is a business case for including women. A high percentage of women in senior management and on boards yields better financial performance.

That's the bottom line, no matter what companies you survey, in what countries. The same result pops up. The better return on investment, return on assets, and better oversight. But the business case has yet to be bought by the corporate powers that be. And that just is not good enough any more.

One of the excuses I hear often is that there aren't enough women with operational experience.
Bull! I was on the board of a Fortune 100 company and it had three women evp's. None of them were invited to be on boards. And look at all the women who run fastgrowing companies. I pointed that out to one board member and he said, oh, what they do doesn't apply to a big company. But the women provide insight into the biggest market. And would it hurt a big company to be more entrepreneurial on its board? The talent is there.

Image courtesy of Morguefile user sideshowmom.
This interview was condensed and edited.