Women on Board Turkey 2018, 6th Annual Report

Abstract

In this 6th report on Women on Boards in Turkey, we present data on woman directors elected to the boards of Borsa İstanbul (BIST) companies in 2018. We report that 15.2 percent of all board seats are taken up by women this year, with the highest annual improvement since 2013. This is a welcome progress after the unexpected step backwards in 2017, but the 1.3 percentage point increase from already a low level is far from being impressive. The slow development in gender diversity is partly related to long tenures corelated with the board seats occupied by owner families who are reluctant to professionalize their boards. The turbulent times Turkey is going through may prolong their entrenched positions. In this year’s report, we no longer present the business case for gender diversity in boards as for many, including the regulators, governments and investors, the case has already been made many times. We also exclude the academic literature review as it has expanded and deepened beyond the limits of this report. The consensus is reached however, that gender diversity and firm performance are correlated. Establishing causality is nevertheless difficult, except in cases of legal quotas. Thankfully the upsurge in legal quotas provided opportunities for researchers to test the causal effect of forced female presence on boards. The recent research shows that the immediate effect of forced quotas on firm performance is context dependent; they work better in countries where gender gap is smaller, and where investors are better monitors. We now also know that the negative effects of quotas on some companies in some countries disappear in the long term. Legal quotas, therefore, are approved as being safe medicine for persistent male dominance on boards, with well tolerated temporary side effects! Globally, as in Turkey, 15 percent of all board seats are taken up by women. While this is a disappointing figure, a remarkable progress is recorded in some countries. In 2018 the percentage of women in 18 European Union countries averaged above 25 percent and the ratio of women on FTSE-100 boards exceeded 30 percent thanks to the work of 30 Percent Club. Measuring, target setting, monitoring and peer pressure proved to be working as the Turkey members of 30 Percent Club also achieved the highest improvement in the ratio of woman directors with 16.7 percent, above the average increase for all BIST companies and main BIST indices we monitor.