Ritesh Anand Column: Listed firms must have more women on boards

The recently concluded 26th African Union Summit held in Addis Ababa under the theme “African Year of Human Rights with particular focus on the Rights of Women” focused on the need for respect for human rights especially the rights of women. Despite efforts to increase the participation of women in Africa and promote women empowerment, the continent lags behind the rest of the developed world. So how does Zimbabwe fair when it comes to gender equality and women’s empowerment?

Ritesh Anand

According to a recent study by the University of Zimbabwe, published by the European Centre for Research, Training and Development in the United Kingdom, on the board of directors of public companies listed on the Zimbabwe Stock Exchange (ZSE), corporate Zimbabwe had fewer female seats on the board of directors and the pipeline of future women leaders was alarmingly thin. The low representation of women on the boards of directors was attributed to male-domination of the nominating committees and corporate leadership groups; lack of qualified women directors; systematic sex-based bias against women and women’s inability to develop strong networks.

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Women held 25% of the board seats at the UK’s largest public companies in May 2015. In 2012, women held only 14% of the board seats at companies on the S&P Composite 1500 Index. Out of the 406 directors of listed public companies on the ZSE, only 40 (or 10%) were female. This demonstrated that although women gained board seats, they were a numerical minority, which consequently reduced their influence on corporate decisions.

Only 27 (or 45%) of the listed companies had one or more women on their boards. Only three companies (Econet Wireless Zimbabwe, NicozDiamond Insurance and Pelhams) had three female board members while a majority had two or less. More than half (58%) of the companies listed on the ZSE did not have a female board member.

According to the study, female directors were merely for window-dressing and were mostly drawn from the same pool. The situation was exacerbated by the companies’ preference for candidates who had already sat on a corporate board, meaning that positions were often fed from the same small pool of experienced women.

Further investigation of this small group of women directors revealed that a majority of them sat on more than one company board. The most prominent feature exhibited by women directors was higher levels of education (both academic and professional). That is over 56,3% of the women directors achieved an undergraduate degree (or higher) while 31,3% achieved a Master’s degree or PhD.

Meanwhile, only 6,3% had professional certificate or diploma qualification while 31,3% did not indicate their qualifications.
While women’s representation in business is somewhat disappointing, it is pleasing to note that women’s representation in parliament more than doubled from 17% following the 2008 general elections, to 35% after the 2013 elections. Zimbabwe now joins the ranks of the more than 30 countries worldwide that have used a special electoral quota system to increase women’s representation in parliament to at least 30%, which is considered the minimum for collective action.

Women now comprise 124 of the 350 MPs in Zimbabwe’s new parliament, including 86 women in the National Assembly — 60 in the reserved seats and 26 elected directly to the 210 constituency seats. This is commendable and needs to be replicated in the private sector. It would be heartening to see greater participation of women in the business sector, especially on the boards of listed companies in Zimbabwe.

To create change in the representation and status of women on company boards required individual initiative by women and changes in both government policy and policy and procedures of companies when recruiting directors. The study recommended that the government should introduce a mandatory quota representation for each sex in non-executive board positions for companies listed on the local bourse.
According to the study, women in Zimbabwe need to adopt a more proactive approach by volunteering, self-promotion and building self-confidence to take initiatives.

Women should build strong social and business networks that would support their promotion as company directors.
Women should build their public image through public speaking, writing articles in newspapers and participating in business and professional forums.

Furthermore, government should introduce a mandatory quota representation for each sex in non-executive board positions for companies listed on the ZSE.

Finally, listed companies could do more to encourage greater participation of women on their boards. It is time to change the “old boys’ club” scenario that is so prevalent in Zimbabwe and encourage more women to join corporate boards. Perhaps then we see an improvement in standards of corporate governance in Zimbabwe.