Skip to content Skip to footer

Loading Results

“Holding the Centre”

Why gender diverse boards and ESG can keep it together

One hundred years ago next month, the iconic Irish poet William Butler Yeats wrote “Things fall apart; the centre cannot hold.” He may have had a line into 2020. With the COVID-19 pandemic, the decline of trust in institutions, political divisiveness, increasing nationalism, impending ecological disaster, social unrest, technology that enables but alienates, income inequality and a loss of trust in corporate America, we reflect: how can the center hold?

From the vantage point of a public company boardroom (which, these days, looks a lot like a home office), you may think your company has little ability to impact these systemic problems. You would be wrong. 

It's no secret that many institutional investors have increasingly prioritized environmental, social and governance (ESG) risks at their portfolio companies. At the same time, esoteric debates around shareholder primacy and stakeholder capitalism continue to be battled out at the coastal campuses. All the while, your customers and the public look on and make judgments about your company. What is a board member to do?

For years, PwC’s Annual Corporate Directors Survey has tracked boardroom views on a number of ESG issues, like climate change, income inequality, diversity and human rights. Our 2020 results show that these issues are gaining traction in the boardroom—but far too slowly to make any real impact in the short term. Today, time is of the essence. 

But here’s the rub: our survey also demonstrates how balancing the gender representation on boards can bring about broader changes. Female directors consistently prioritize ESG issues in a way male directors do not. With more female directors on boards, the focus and direction of boards changes. 


Female corporate directors are more invested in ESG than their male counterparts 

  • Female directors see a greater connection between company strategy and ESG issues. 60% of female directors, compared to 46% of male directors, say ESG issues should be incorporated in company strategy. Female directors are also much more likely to say ESG issues are a part of their board’s enterprise risk management discussions and are a regular part of their board’s agenda. 
  • Female directors give greater priority to environmental and social issues in the boardroom. On climate change (79% vs. 62%), human rights (79% vs. 64%) and social movements (69% vs. 40%), female directors are far more likely than male directors to say that these issues should be incorporated into company strategy.
  • Female directors are more likely to support non-financial performance metrics to incent different executive behaviors. By significant margins, female directors back incentive plan metrics tied to diversity and inclusion (58% vs. 32%), environmental goals (41% vs. 31%), and employee attrition (59% vs. 52%).

Making board diversity a reality

But board turnover remains low, slowing progress towards greater gender balance on boards. Women, who represent 51% of the US population, hold just 26% of S&P 500 board seats. This percentage has increased only 2 points in the last 8 years.

Yet our data suggests that increasing the number of female directors could accomplish two important goals. With increased women, boards would be more likely to embrace ESG issues and to foster diverse leadership, and in turn, redefine the purpose of the corporation and capitalism in the public mind at a time when it’s increasingly questioned. These goals are about more than just the potential positive impact on the world—successfully addressing ESG issues are critical to the long-term sustainable profitability of public companies. And they are the risks your largest investors are focused on.

We’ve written before about how to increase diversity on your board, including rethinking director criteria, requiring diverse candidate slates, and expanding the size of the board to make way for diverse voices—and those still apply. But as the center appears to be coming apart in 2020, here’s how boards can use this moment to encourage real change.

  • Accelerate the process of diversifying the board. Not next year, or the year after. Make diversity an immediate priority. For the board to benefit from diverse perspectives on systemic ESG issues and their impact on company strategy, the time to add more female directors to your board is now.
  • Prioritize diversity at the board leadership level. Simply having female directors on the board is not enough. To accomplish real change, leadership at the board and committee level should also reflect the board’s diversity.
  • Demand regular management reporting on ESG metrics and make ESG issues part of every board strategy discussion. For those companies that have chosen to let others in their sector lead, downplay ESG to a marginal discussion, or believe that ESG risks don’t impact financial performance, the board needs to step up now and hold management to task. 
  • Seek regular updates on the public policy positions the company is taking and have robust board discussions on the business and brand impact. In the final analysis, public companies and their boards no longer have the option to remain silent on the issues fraying the social fabric. Coalesce around a values-driven strategy on these policy positions and support management—particularly when engaging with institutional shareholders.

As a director, this call to action on board diversity and ESG prioritization will ultimately benefit your shareholders, employees, suppliers, customers, and the communities in which you operate. And your action may be the only way to help hold the center.


Contact us

Maria Castañón Moats

Maria Castañón Moats

Governance Insights Center Leader, PwC US

Paul DeNicola

Paul DeNicola

Principal, Governance Insights Center, PwC US

Follow us