An intense discourse regarding Gender diversity on Company Boards
When Afra Sajjad, who is Head of Education & Policy Development at ACCA, asked me if I would agree to be on a panel to discuss “Board Diversity: is gender the missing link?” I agreed immediately. It was an opportunity for me to voice my very strong views on the need for more women on company boards – capable, competent, experienced women.
And so it was that I ended up at the Avari Hotel on 24th May. There was a very distinguished panel comprising Arif Masud Mirza CEO of ACCA, Shafqat Sultan President of the First Women’s Bank, Asif Malik VP of HR of the Life Sciences Division of ICI Pakistan Ltd, and an even more distinguished group of people as part of the Roundtable comprising amongst others people like Zafar Khan, formerly of Engro and PTCL and Fuad Hashmi of the Pakistan Institute of Corporate Governance. The event was very ably choreographed and moderated by Afra Sajjad who is full of enthusiasm and energy.
Afra set the scene by sharing the results of a working paper on “Gender diversity on Boards in Pakistan” which was developed by ACCA in partnership with IFC and the Netherland Government.
She impressed upon participants that the world was facing three kind of crises – a financial crisis, a climate change crisis and an ecosystem/natural resources crisis. The business model of the past 150 years of take, make and waste where the focus is on maximising shareholder value, is being challenged by all these three crises. Wheat is needed, she said, is a business model that creates ethical sustainable economic, environmental and social value for shareholders but for stakeholders too –an inclusive business model geared towards ensuring sustainable business growth but also positively contributing towards a sustainable world.
It is the Board that will lead the business model transformation hence the composition of the Board is even more relevant today than it was in the past if we are to conquer these challenges.
When looking at world statistics, it was seen that Norway was leading the charge in terms of women on company Boards, followed by Sweden and Finland. The Norwegian Finance Minister actually pushed through legislation in 2006 that mandated all listed companies to have 40% women on Boards by 2008 or face shutdown. In 2011 even those who ardently opposed the legislation, agree that it was the best step that could have been taken for the long term sustainability of businesses. Finland and Sweden, however, had no such legislation. They were able to achieve high diversity because othe women who were already on Boards in those countries were influential and inspiring role models and helped develop organizational culture that was conducive to inducting more women. In the US the Securities & Exchange Commission followed a totally different path. Instead of legislation, they insist on full disclosure by companies on how nominations for directorships are made and if diversity is something that they follow during the nomination process.
It was interesting to note that Pakistan matched the Scandinavian countries in the percentage of women that they have as directors. Although a large percentage of these companies are family owned and the woman is on the Board because she is a relative of the business owner, there are a percentage of women who are there for other reasons – because they are competent and have proven their value to the company; because the company thinks that diversity is good for the company; because the women have impressive professional qualifications; because the companies want to follow best practices, etc etc.
The panel discussion that followed discussed the findings widely and shared their experiences. Although some people felt that there should be a quota for women on Boards, some of us felt that it was not the right way to go. Women don’t want to be given positions because they are women; they want those positions because they deserve them and are competent enough to make a difference. Meritocracy is all they ask for. The problem is that often women are not even considered when Board positions are available. That is something that needs to change.
I shared with participants that IT companies that had women on their Boards had found that their contribution in terms of decision-making, strategy and development of the company, was significant. Of course like other sectors, there just weren’t enough women who were being considered for director positions.
Some of the reasons that are being used for not even looking at women for these positions include:
– Work-Life Balance issues
– Lack of business acumen
– Aggressive & emotional nature of women
– Not enough experienced & qualified women available
Most participants agreed that the pool of qualified women needed to be increased and that companies needed to start recruiting women in all departments and grooming them for senior middle and senior positions. If women needed to take some time off mid-career, they should be encouraged to rejoin when they are able so that the knowledge and experience they had acquired was not wasted. Flexitime and remote work should be incorporated as much as possible so that job continuity is an option. One suggestion that was made was that positive affirmation should be considered i.e. companies should specifically inform recruitment agencies to include a percentage of women in the candidates that they shortlist for companies to look at. The women should be hired if they are qualified for the advertised positions.
Training for directors – both men and women – is something that is sorely needed, to ensure that they have all the current know-how and the capacity to strategize and drive company growth.
The overall discussion was both interesting and productive with challenges being pointed out but solutions being offered. It was certainly one of the better discourses that I have been a part of. Thank you Afra. Thank you ACCA.