Women On Board
Diversity in workplace is not a new concept. Some organizations take this matter very seriously and live up to their promises whereas others make vague claims. Recent societal developments have played a great role in bringing more women forth but either way, inequality at workplace still prevails.
Few organizations strive to inculcate more women in board positions and provide a diverse work environment but at a large scale, diversity on board is still at a staggering low. Although UAE’s Vision 2021 has aided in women’s fight towards equality by doubling the number in the boardrooms of UAE-based companies since 2017, it is still as low as only one in 25 board members, or 4 percent.
Despite all of the statistical claim that women on boards and in top management change things for the better, we do not even see them on listed business boards very often. As per the data collected on December 16, 2020, out of 5,597 board seats on companies in the GCC, Lebanon and Egypt, only 139 seats, or 2.5 percent, are occupied by women.
Women are underrepresented in the C-suite, receive lower salaries, and are less likely to receive a critical first promotion to manager than their male counterparts. Only 7 percent of CEOs at Fortune 500 companies are female. This means that’s out of the 500 highest-grossing in the US, only 36 have female CEOs. That being said, studies show that female CEOs are more prone to getting fired or scrutinized for their work than men.
In 2021, women earn 82 cents for every dollar earned by men. Women with the same employment characteristics and do similar jobs as men get paid 98 cents. In other words, qualified women who does the same job as men still get paid 2 cents less for no attributable reason. Studies show that even the median salary for men is 18 per cent higher than that for women.
DOES GENDER MATTER IN THE BOARDROOM?
According to McKinsey, the most gender-diverse companies are 21% more like to experience above-average profitability. Research shows that organizations that have at least one female executive at the board level perform better. Studies also show that despite occupying less than 7% of board chair and lead director roles, women directors take on corporate board and committee leadership roles up to two years faster than men. According to a study in Harvard Business Review, inculcation of women on boards shows great improvement in the quality of board deliberations and results in boosting decision-making processes for the business.
Having more women in the workplace makes the company a better place to work for people of all genders. It creates a more calming and equal environment which contributes to better attitude of the employees. And, as the famous saying goes, a happy employee is a productive employee.
Women make up half the world population. So, by barring them, you’re choosing to shrink the talent pool for your own company. Regardless of market dynamics or business strategy, an organization which is not inclusive of women is paving a way to their own demise. Employing more women in board positions is one of the easiest way to ensure a company’s unprecedented growth and prosperity.
CHALLENGES TO OVERCOME
Gender diversity is yet to take root in the Middle Eastern boardrooms, but due to the UAE’s Vision 2021 initiative, this situation is made a tad bit better. Women now sit on the boards of 28 of the 110 listed companies in the UAE. They only make up around 3.5 per cent (29 of a total of 823 board members) of board directors of these organizations. According to statistics from BoardEx, women only make up 19% of the total board members in the world, out of which only 0.2% are women in the GCC. Despite an increase of women pursuing higher education globally, a gender gap in employment rates remains among highly educated women in some countries
The road to putting more women on boards is paved with many obstacles. From underrepresentation by media to lack of opportunities by companies, it is filled with complications. Women are disproportionately represented in non-executive positions, with only a small number being given a chance in key leadership positions. Even the quota system for nominating women to boards has been criticised because it has often resulted in the selection of women who are underqualified which further contributes to the notion that women are unqualified for the job.
WHY ARE FEMALE LEADERS NECESSARY?
A recent study on the male dominated investment industry shows that, the more alike investors are, the worse their investments perform. Companies that improved their percentage of female investors by 10% saw a 1.5 percent rise in total market return and 9.7% more profitable returns on average every year.
Additionally, studies show that businesses with a diverse community are six times more inclined to be creative and twice as likely to meet or exceed financial goals.
A study published in Harvard Business Review states that female board members helped balance the overconfidence of male CEOs, and the result was improved decision-making for the business. The study correlated CEOs’ overconfidence to overestimation of returns and underestimation of risk, both of which can diminish shareholder value. Inclusion of women, they found, improved the quality of board deliberations, and different perspectives increased the information available for exploring and resolving complex issues.
The efficiency of a board is determined by its diversity, which necessitates a mix of experience and skills. This is true regardless of gender, race, social status, or intellectual abilities. Companies that fail to instill a diverse environment often falls prey to conformism and gradual demise. Research also indicates that women have stronger skills reading non-verbal cues. Therefore, having women on teams can improve group collaborations as well as increase team efficiency.
PROMOTING WOMEN ON BOARDS IN GCC
Women’s presence on company boards in the Middle East is one of the lowest in the world. The UAE’s national gender goal is to rank among the top 25 countries in the world for gender equality by 2021. However, not all MENA countries have seen good results in their business practices, and eliminating the gender gap in corporate decision-making positions in the region remains a major challenge. According to statistics, out of the 15.1% of women board directors in the Asia-Pacific, only 3.7% belong to the MENA region.
In an area where many countries are plagued by uncertainty, unemployment is increasing, opportunities are scarce, and the public sector is overburdened, expanding the private sector is the only way to achieve economic growth. This necessitates a focus on the factors impeding private sector development, such as the overarching gender gap in the labor pool and the lack of female representation at the board levels.
COMPREHENSION IS KEY
The most efficient way to overcome an issue is to understand what caused it. What is the root of the issue here? And how can we tackle it? The reasons for poor performance of the GCC countries on gender diversity measures, especially in board and senior management, are multiple, complex, and interconnected. In Bahrain, for example, women account for 63% of college graduates but just 19.7% of the working population. Cultural barriers, family assets that eliminates the need for two incomes, and work-life balance issues are some of the many factors that pool into this discrepancy.
On that note, enhanced female inclusion in the boardrooms and among top management levels is crucial for improvement of corporate efficiency and economic development in an area in desperate need.
HITTING THE TARGET WITH ERC
Customers, Boards of Directors, C-Suite, Managers and Employees, these are the domains wherein a company efficiently monitor and instill gender diversity. Among these, the Board is the simplest fix as there are numerous highly qualified female executives out there, all it requires is the right set of eyes to look for them. And that is where ERC comes in! We bring you the best most qualified female executives thereby making your search process much easier. All you have to do is onboard them!
We here at ERC International are firm believers of gender inclusivity and diversity. The culture at ERC is shaped by a powerful ethics and value system as an organization spurred by female leadership, with the goal of growing female leadership engagement across sectors and businesses.
With a global database of over 450,000 male and female board members, executives, and non-executives from all sectors, ERC is poised to pave the way in bringing diversity within the boardroom.
The mission and vision of the company wholesomely aligns with all that is needed to bring efficient female leaders on organization boards. Each step taken towards headhunting is planned and executed with utmost perfection, incorporating all elements of women empowerment and inclusivity.
By constantly promoting the value of women in leadership roles and connecting organizations with highly talented female candidates, ERC proves to be one the best female headhunters in the market.
A HOPEFUL FUTURE
The development of diverse boards has progressed drastically over the last decade. From Norway establishing a 40% reservation for women on its boardrooms in 2003 to Nasdaq making history in December 2020 by proposing a comply-or-explain rule for corporations listed on the exchange, the fight for gender inclusivity on board has a come a long and fruitful way.
According to the Securities and Commodities Authority, listed firms in the UAE must now have at least one female director on their boards. By ensuring equal opportunities and attracting talent, the Kingdom of Saudi Arabia’s 2030 vision targets to improve women’s participation in the workforce from 22% to 30%. This clearly shows that the future ahead is a much brighter one and provides a ray of hope to the numerous talented females out there.
ERC aims to set an example for other businesses. By instilling a more inclusive and diverse board we aspire to inspire more companies to do the same. An inclusive board better reflects a company’s workforce while also strengthening decision-making consistency and thoughtfulness. Therefore, an inclusive board provides nothing but advantages and aids in the growth and development of your company.