Nigel Chimhofu AUDIT ASSISTANT Women can and should be appointed because they are well-qualified candidates, not because of their gender.
Background We obtained Annual Reports for the period 2019-2020 for 54 companies listed on the Zimbabwe Stock Exchange (ZSE). We inspected board composition of the boards as per the annual reports.
We stratified the data into the following categories:
- Women on board of directors,
- Women on board of directors with female/male chair,
- Professions of women on board of directors.
Statistics defined Total companies analysed — 54 companies listed on the ZSE
- Women on boards — the total number of women holding directorships in ZSE listed companies based on available data.
- Women on boards with female/male chair — percentage of board seats held by women in ZSE listed companies with a female chair versus the percentage of board seats held by women in ZSE listed companies with a male chair.
- Professions of women on boards — denotes the profession/ educational background that has the highest concentration of women as board of directors.
Women on boards Board of directors of ZSE-listed companies comprise only 17% women. This is partly attributable to the factors discussed in my previous article, “The five possible challenges women face in career development.” (please refer to the article). The world is making strides to close the gender gap and it has becomevital to have womenrepresented in the boardroom as this promotes diversification.
A diversified board speaks on the culture of that organisation. Having female leaders be part of the board of directors creates a catalytic function as they act as role models and mentors to other women and men. It creates a radical shift in the corporate culture of an organisation, enhances the empowerment of women by encouraging them to pursue their careers and aim for the top, and it narrows the gender equality gap.
A strong representation of women in the boardroom has a ripple effect in breaking down stereotypes. These are important steps in achieving greater economic opportunity for women and work towards becoming more inclusive societies.
Based on the 54 ZSE-listed companies examined, we have noted that most men occupy the chairperson seat compared towomen.This could be ascribed to gender bias, where men are viewed as natural leaders. Other authors have written that, “Women are often appointed based on past accomplishments, while men may be appointed based on future potential.” This then suggests that despite the qualifications, experience and good networks required for such a position, women face additional challenges that are exclusive to them.
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Furthermore, most organisations tend to have the founders or co-founders as the chairpersons, resulting in men being the chairperson, as most of these organisationswere founded by men. It would be imperative to have full disclosure on the processes and criteria used when appointing directors and chairpersons.
Professions of women on boards Accounting and finance have the highest contribution of women in the boardroom, followed by woman with legal backgrounds. The other constitutes of women that have experience in marketing, engineering, sociology and nutritionists. Most of the women in the finance and accounting functions joined their organisations as finance managers or an equivalent post. They were then promoted into executive positions and finally became part of the board.
Those in finance have an exceedingly high chance of being appointed as board members. This is because the finance functions provide visibility into the balance sheet, strategic investments, mergers and acquisitions activity and other operations of the business.
This gives women in finance an advantage as they have an overview of the whole operations of the business and making them good candidates for appointment.According to Deloitte financial services centre, globally, women account for 66% of leadership positions in talent, 48% in marketing and business development, 39% in administration, and 33% in legal, none of which are commonly included in the path to CEO or being elected as a board member.
What can be done?
- Gender quotas
Gender quotas are a form of affirmative action or equal opportunity measure designed to address the slow pace of change in the participation of women and minority groups in areas of society where they are historically under-represented. Having a gender quota would speed up the involvement of women in the boardrooms.
In Austria for example, a 30% gender quota for the boards of all listed companies and those with more than 1 000 employees was implemented in 2018. A law of similar nature was enacted in India.
Quotas can however result in women not being appointed based on merit but to fulfil the quota requirements. It is imperative that women be trained, and leadership circles be created to nurture women as a more permanent solution to bringing diversity in board of directors. This will result in women being selected for the positive contributions they can bring to the company.
- Widening the path
It is significant to widen the path towards career advancement since board members are often recruited from the executive level. Companies should concentrate on training and development for the critical “middle” management level where women often stall in their career advancement to executive roles. In most ZSE-listed entities, we have women occupying the middle management positions. Companies can make a difference by launching leadership initiatives that provide additional opportunities for advancement.
- Leadership tone
The leaders of a company should set the right attitude and tone at the top when it comes to female inclusion issues throughout the organisation. If our boardrooms are still gender biased, we are far away from having gender balanced organisations.
Conclusion A diversified board will result in a fundamental shift in how organisations are run. A more diverse board will raise and consider a wider set of issues and responses. Fresh viewpoints will be introduced, different questions asked, and decision making will be approachedfrom different angles as women tend to be more detail oriented. Board diversification to include more women may result in a company making positive headway on the strategic, governance, innovation, and risk management fronts.
Disclaimer: Although efforts have been made to make sure that the data presented in this article is both accurate and complete, I do not represent, warrant, or guarantee that the data presented is free of error and misstatements.
Chimhofu is an audit senior assistant at Deloitte and Touché, Harare. — [email protected] or www.nigelalbert.co.z
