Board composition: Results of Cyprus and Europe

18 July 2017


Board composition – definition and its importance

Based on the definition of good corporate governance, the board composition is one of the most important factors for the effectiveness of an entity. Composition of the board refers to the diversified backgrounds and expertise of the board members, the suitable balance of power on the board between dependent and independent members as well as the gender diversity which is equally important.

It is generally acceptable that composition of the board of directors depends partly on the size of the company. However, the guidelines about the board diversity differ between the countries in which the companies are registered and type of the company (i.e. Public listed company vs small family business).

With regards to the gender diversity, the presence of women in corporate boards has been slowly increasing over the last years. In particular, some of the European countries, including Norway, Spain and France had been working on establishing quotas for women on boards.

French legislators, promulgated that by 2016, 40% of board members of the largest listed or non-listed companies (with more than 500 employees and a turnover exceeding 50 million Euros) should be women. As a result, the presence of female in the boards reached 15% in 2010 (Boutant & Garriaud-Maylam, 2010).

Six years later, the increasing presence of women in corporate boards of European companies is becoming a fact with an average of 25% of board members being women (European Women on Boards, 2016).



Despite its small size, Cyprus is prominent international business and financial services center.

The long-established reputation as a safe and secure location for commercial and business activities, made Cyprus an attractive destination of choice for foreign investors. Further to that, the strategic location of the island being at the crossroad of three continents, Europe, Asia and Africa and close to Middle East enhances the ease of doing business in the global market.

The reasons to invest in Cyprus are numerous including – but not limited to – the attractive tax system of the island, the well-educated staff as well as the macroeconomic internal and external stability.

Based on the company statistics issued by the Department of Registrar of Companies and Official Receiver of Cyprus, there are 213.276 registered companies in Cyprus as at June 30th 2017.

Despite the efforts of equality between men and women in leadership positions, it is generally acceptable that managerial roles are usually dominated by men.

Cyprus is of a similar case. Today, the proportion of male Directors of Cypriot companies is twice the proportion of female directors. In particular, 67% of the managerial positions in the Cyprus market are governed by men whereas only 33% relates to women leaders.










Source: Infocredit Group Cyprus Database


Nonetheless, in April 2016, the percentage of women participating on Boards of companies listed on the regulated market and on the emerging companies market in Cyprus, were 10% and 15% respectively, which is below the average share of women (23.3%) participating on the Boards of the largest publicly listed companies registered in all Member States.

One year later and based on the latest statistics issued by the Cyprus Stock Exchange in April 2017, the participation of women on corporate Boards in Cyprus remained stable at 10% in the regulated market and increasing by only 1% in the emerging companies market.

Further to the results, the Advisory Committee of the Cyprus Stock Exchange reported that there are no national measures in place in order to improve gender diversity on the corporate Boards and suggested to the Council of Cyprus Stock Exchange to take actions on encouraging and promoting increased participation of women on Boards.



Based on the Gender Diversity on European Boards: Realizing Europe’s Potential: Progress and Challenges Report, published by the European Women on Boards (EWoB) in April 2016, is stated that percentage of women large company boards in Europe has almost doubled over the past five years from 13.9% to 25% in 2015.



Source: European Women on Boards (April 2016)


In addition, the report highlights that the average number of board directors at STOXX 600 companies over the five-year period (2011–2015) remained fairly stable at around 11 members per board, meaning that the increase in the level of women on boards has been associated with a proportionate reduction in the number of male board members, rather than an increase in the size of boards on the whole. In particular it is stated in the report that: “As incumbent directors retire; a growing percentage of new directors are women. In 2011, 28.1 percent of newly elected directors at STOXX 600 companies were women. By 2015, this figure had risen to 35 percent.”



Source: European Women on Boards (April 2016)


However, despite the substantial growth of the participation of women in European boards over the past five years, women continue to represent significantly less than half of board members in all European markets and sectors.


Maria Evangelou

Business Advisory Consultant