Four Women Make Jazztel Pioneer in Spain, Where Men Rule

As Spain’s biggest corporations lumber toward a goal of bringing more women to their boards of directors, one company offers a powerful incentive to do so: the best performer in the country’s benchmark stock index, Jazztel Plc.

The phone and Internet provider, whose stock has climbed more than sixfold since 2009, has had the greatest share of women on its board for most of the past five years. At 44 percent female, Jazztel’s board led the 35-member IBEX from late 2009 until May, when Red Electrica Corp. SA surpassed it, data compiled by Bloomberg showed. Red Electrica now has five women on its 11-member board, or 45 percent.

Spain’s government passed a law in 2007 requiring the country’s companies to work on adding women to their boards within eight years, recommending a ratio of at least 40 percent. Few have managed to meet the goal. After Jazztel and Red Electrica, the next highest ratio is 36 percent, at utility Iberdrola SA. Three companies -- Gas Natural SDG SA, construction firm Sacyr SA, and engineering company Tecnicas Reunidas SA -- have only men on their boards.

At Jazztel, by contrast, four out of nine directors are female. Chairman Leopoldo Fernandez Pujals hadn’t intended to add quite so much gender diversity. After reading a report that companies make smarter decisions when there’s at least one female director, Pujals asked recruiter ExcellentSearch & Selection in 2009 to scout for two women with different backgrounds. The headhunter came back with a short list of four candidates. Pujals found them so impressive that he offered to hire them all.

Working Mom

“I was born in a house with a dad who was a lawyer, and a mom who was an architect who worked in my grandfather’s building company and at the same time was a tenured design professor at the university in Havana,” Pujals, 67, said from his house in the Bahamas, where he’s writing his memoir. “I grew up with a woman who had a job, so I don’t have that mental barrier others may have.”

Spanish businesses rank fourth-lowest on female directorship among European countries with companies listed on the Stoxx Europe 600 Index in 2013, behind Italy and Greece. Portugal is the lowest with just 5 percent.

Representatives for Tecnicas Reunidas and Gas Natural declined to comment for this article. In a statement, Sacyr said it is considering improving women ratio on its board. In response to requests for clarification on the Spanish law, the ministry of health, social services and equality’s press office e-mailed fragments of the decree to Bloomberg.

Paying Off

Investors who bought Jazztel shares in November 2009 -- when the four women joined the board -- received a 259 percent return through the end of last month, the best performance in the IBEX, which declined 6 percent. When the stock peaked at 11.27 euros in May, the Madrid-based company had a market value of 2.8 billion euros ($3.7 billion). The shares rose 0.4 percent to 10.22 euros at 1:25 pm in Madrid.

According to a 2012 Credit Suisse Group AG report, the average return on equity for companies globally with at least one woman on their boards was 16 percent over six years, compared with 12 percent for those with men-only boards. Net income growth was 14 percent at companies with female directors, compared with 10 percent for those without. Companies with women on the board also register better stock performances and have lower debt ratios, as well as higher price-to-book values, according to the report.

Different View

Pujals himself says he believes there is a connection between board composition and corporate performance. Whether true or not, Jazztel does have a lot to show. Revenue and earnings before interest, taxes, depreciation and amortization doubled between 2010 and 2013. Last quarter, the gross profit margin reached a three-year high of 56.2 percent, according to data compiled by Bloomberg.

Jazztel’s four female board members are Elena Gil, Maria Luisa Jorda, Mireia Perez and Maria Antonia Otero. Perez trained as a computer engineer and Otero as a telecommunications engineer. Gil has a banking background while Jorda’s experience is in financing and auditing.

For a business that depends on winning high-speed Internet customers from much bigger rivals such as Telefonica SA, often with the help of two-for-one deals and freebies such as tablets, having a balance between male and female directors helps Jazztel reaching more potential consumers, according to Gil.

“When a different view is incorporated -- in our case the female view -- there are other perspectives, other views,” she said in an interview. “And I think that at the end better decisions can be made.”

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