Women on boards revolutionizing ESG governance

Last May 6, I had the privilege of speaking at the Global Summit of Women in Dubai on the role of women on boards in promoting environmental, social, and governance (ESG) practices. The session highlighted the importance of diverse board memberships, and I was able to share our best practices—the efforts made in the Philippines—to improve gender parity in corporate governance. It was an opportunity for all of us to explore innovative ESG initiatives that work for our respective contexts. Allow me to share some salient points:

Let me begin with this bold statement: Diverse board memberships positively impact governance—and this is not just in theory. In fact, companies like the ACEN Corp., and Cebu Landmasters, Inc., where I am an independent director, have implemented board diversity policies to increase women’s representation in senior leadership positions.

And as I often mention in articles and speaking engagements, the Institute of Corporate Directors (ICD) achieved almost gender parity in its board, demonstrating the significance of diversity in decision-making. Furthermore, ICD’s recent study on board diversity in publicly listed companies (PLCs) showed that companies with female directors tend to outperform their peers in terms of return on equity. This only solidifies the point that it can be done, and it is good for the company and the organization.

Sharing some best practices: The Philippine Securities and Exchange Commission (SEC) adopts a “comply-or-explain” approach to sustainability reporting for PLCs. While board diversity is encouraged, it is not mandatory. The SEC introduced the Gender and Development Awards to recognize PLCs with the highest number of women on their boards. The NextGen Organization of Women Corporate Directors, which was recently organized, aims to enhance women’s representation in leadership roles through education, training, and networking opportunities.

Meanwhile, in the Asean region, the Asean Corporate Governance Scorecard rates companies based on governance initiatives, including board composition. Expanding the scorecard to include mandatory disclosure of gender metrics in participating Asean countries is underway.

The session also explored the ongoing debate around board quotas. The consensus was while concerns about competence and nepotism arise, quotas can accelerate the appointment of qualified women and raise awareness. Developing a pipeline of qualified and experienced women is essential for effective decision-making.

Prominent organizations exemplifying ESG initiatives were further highlighted. As an example, ACEN Corp. aims to achieve net zero greenhouse gas emissions and transition to renewable energy by 2050, while Cebu Landmasters focuses on sustainable spaces, supporting local markets, resource conservation, community engagement, and organizational efficiency.

Our best practices clearly show that efforts to improve gender parity on boards are underway in the Philippines through diversity policies. But of course, there is work that still needs to be done, both in policy and in practice.

Collectively, the session stressed the need for government support and regulation to promote board diversity, and also showcased innovative ESG initiatives and emphasized the ongoing debate around board quotas. We need the support of our government as the institution can drive a transformative shift in corporate culture by championing diversity and encouraging representation.

We walked away from the session with new learnings that we can bring back to our own companies and our own countries. Clearly, the debate around board quotas still persists. But this only tell us that progress means more conversations and often requires bold action. While the opinions may differ, the shared belief remains: Diverse boards lead to better financial performance and sustainable business practices.

The Global Summit of Women 2023 united more than 900 delegates, including public and private sector leaders from 73 countries, with the objective of exchanging ideas, fostering collaboration, and empowering women to play significant roles within their organizations and advocacies. Looking ahead, the next Global Summit of Women will take place in Madrid, Spain, in 2024, and I am excited to witness a greater representation of Filipino women leaders as this will provide a platform for them to not only learn from others, but will also be an opportunity to showcase their work, the remarkable progress we have initiated in our country, and inspire change on a global scale.

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Ma. Aurora “Boots” D. Geotina-Garcia is founding chair and president of the Philippine Women’s Economic Network (PhilWEN), chair of the Philippine Business Coalition on Women Empowerment, and co-convenor of Champions of Change Philippines.

Women Who Lead is an initiative of PhilWEN.