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ISA Chairwoman is establishing Forum +35 to promote gender diversity in the boards of the reporting corporations, mutual funds, and portfolio management firms supervised by the ISA

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Boards to Include at Least 35% Female Directors

Anat Guetta, ISA Chairwoman, established the Forum +35  to promote gender diversity in the boards of reporting corporations, mutual fund managers, and portfolio management firms supervised by the ISA

ISA Chairwoman, Anat Guetta: “In Israel, only 16% of all reporting corporations have more than 35% female directors on their boards. This is an unacceptable situation that is far from where women and the capital market corporations should be in Israel, which is leading, enlightened and advanced state. A significant change is needed.”

ISA Chairwoman, Anat Guetta is establishing Forum +35 to promote gender diversity in the boards of the reporting corporations, mutual funds, and portfolio management firms supervised by the ISA. The forum, which will be known as Forum +35, will include relevant representatives from the public, private, and NGO sectors, who will offer a broad perspective on this issue, grounded in the real lives of the reporting corporations, and will build an effective toolbox for achieving this goal.

The forum will also include voluntary representatives of reporting corporations, mutual fund management firms, and portfolio management firms that are supervised by the ISA and whose boards have at least 35% female directors. These representatives will spearhead efforts to gain the support of the remaining corporations, and work together to encourage and increase women’s representation on the boards of the supervised entities. The ISA invites all supervised corporations and firms that wish to improve their gender diversity to join Forum +35.

ISA Chairwoman believes that corporations’ voluntary participation in this initiative has additional value that extends beyond a move to impose regulatory requirements, which she believes should be the solution of last resort due to the potential negative effects of regulation. Establishing the Forum is based on the assumption that genuine, deep change will come from actions to improve gender diversity in the capital market initiated by corporations and managers in key positions.

According to the findings of a study by the ISA’s Department of Research, Development, and Strategic Economic Consulting, in 2010 only 18% of the directors in reporting corporations were female. A decade later, in 2020, women accounted for 24% of the reporting corporations’ directors. In the past decade, evidence points to an average annual increase of 3% in the number of women appointed as directors in the reporting corporations. Figures also show that in mutual fund management firms approximately 23% of the directors are female, compared to approximately 33% in the major portfolio management firms.

The analysis of figures for 2020 shows that female directors comprise over 35% of the corporate boards of only 75 of the 473 reporting corporations (a mere 16%).  This means that despite the increasing presence of women in key positions and on the boards of reporting corporations in recent years, there is still a long way to go and a need to raise awareness of this issue and promote women’s representation in corporate boards.

The ISA gives strongly advocates diversity in corporate boards in general, and specifically gender diversity, which it considers an important element in the reporting corporations’ corporate governance. This view accords with the leading trend in recent years and efforts to assimilate ESG values in corporate business operations, based on an understanding of the benefits of such a shift and in response to investors’ demands.

The ISA’s goal is to have female directors comprise at least 35% of the boards of at least 50% of all reporting corportions, mutual fund management firms that manage over NIS 5 M, and major portfolio management firms supervised by the ISA by the year 2028. To this end, the ISA intends to take action to ensure that women will comprise 35% of the boards of at least 25% of all the entities supervised by the ISA by end 2023. Achieving this goal would reflet a 58% increase in the number of reporting companies with at least 35% female directors from 2020. After Forum +35 completes its first complete year of activity in 2022, the ISA will begin measuring these indices in 2023, using 2020 figures as its benchmark.

Participation in the forum is voluntary and will have no effect on the regulation or requirements applicable to the participating reporting corporations. The establishment of the forum, its activities, and the identify of its members should not be considered an expression of the ISA’s position on the operations of the participating corporations or the quality of investments in them.

Reporting corportions, mutual fund managers, and portfolio management firms that wish to join Forum +35 to promote gender balance in corporate boards, as well as other entities in related fields, are invited to contact the ISA at [email protected].

For additional information, please contact Ms. Hadar Horen, ISA Spokesperson and Head of Financial Education, at 050-6207943.

This news item was originally published by the Israel Securities Authority (ISA IL). For more information, please see the Source Link.

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