The percentage of Brazilian companies with no female representation on their boards increased in 2023

The presence of women on boards in Brazil remains a pressing point for investors and proxy advisors. Looking only at the companies listed on the Novo Mercado, the percentage of companies with no female representation on their boards of directors decreased from 29% in 2020 to just 5.6% in 2023.

“Despite the notable decrease, questions remain about whether it is acceptable for 5.6% of companies in the highest governance tier on the Brazilian stock exchange to lack female representation on their boards still. The issue of gender diversity among board directors is prominent internationally. However, Brazil still lags”, says Agnes Blanco Querido, Managing Director of Morrow Sodali in Brazil, in this interview published in O Globo.

According to the data from Morrow Sodali’s latest edition of Brazil Lighthouse female participation on boards is still below the minimum representation considered by international best practice, which is at least 30%. ISS and Glass Lewis, proxy advisors often contracted by large foreign investors, have signalled that it is no longer acceptable to have 100% male boards, and in 2023 ISS started recommending votes against boards or the chairman of the board that do not have at least one seat on the board occupied by women.

After some resistance, in July 2023, the CVM approved the ESG Annex, a document containing the measures proposed by B3 to encourage gender diversity and the presence of under-represented groups in senior leadership positions and the reporting of good environmental, social, and governance practices by listed companies.

The mechanism proposed by B3 for applying the ESG Annex is "comply or explain." Companies need to provide transparency to the market about the actions taken to comply with the measures or explain the reasons for not adopting them. This information will need to be included in the company's Reference Form. 

Read the full article here (in Portuguese).