Moody’s Investors Service on Tuesday said that higher-rated companies had a larger proportion of women on their boards than that of lower-rated companies. An analysis of 3,138 Moody’s-rated companies showed that women accounted for an average of 29 per cent of the board seats of investment-grade companies (those rated Baa and above), up one percentage point from 2023.

It also showed that on an average, women accounted for 24 per cent of the board seats of speculative-grade companies (those rated Ba and below), which was unchanged from last year.

Companies based in advanced economies reflected a correlation between board gender diversity and credit ratings, but those in emerging markets did not, it said.

This study considered 24 companies rated Aaa, 146 companies rated Aa, 728 companies rated A, 1,165 companies rated Baa, 582 companies rated Ba, 394 companies rated B, 90 companies rated Caa and nine companies rated Ca.

“The presence of women on boards – and the potential diversity of opinion they bring – supports good corporate governance, which is positive for credit quality. The data do not demonstrate direct causation between gender diversity and credit quality," Moody’s said in the report.

Women hold 35 per cent of the board seats of European companies in the cohort, up from 33 per cent in 2023.

North American companies follow closely behind, with female representation on boards rising to 30 per cent from 29 per cent last year. Women account for less than 20 per cent of board seats in Latin America, the Middle East, Africa and the Asia-Pacific.