Corporate SA?is still failing to include women

2015-03-23 07:00

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Country is woefully slow to transform its corporate boards and is not taking into consideration research that shows that when you have women on boards, decision-making improves

Activists campaigning for the greater participation of women on the boards of listed companies have lowered their sights and are now fighting for 30% female representation in South Africa.

This month, Germany became the latest European country to pass legislation requiring major companies to allot 30% of seats on nonexecutive boards to women.

Germany joined countries such as Norway, France and Spain in introducing the quota system.

According to a report released by Grant Thornton this month, when it comes to representation at board level in South Africa, only 15% of directors in listed companies are women.

The representation of women in senior management roles is at 27%, while only 7% of CEO and managing director positions are occupied by women.

A higher percentage – 21% – of women are found in the positions of chief financial officer, while 26% of human resource executive jobs are occupied by women.

The report also showed that 23% of listed companies have no women in senior management positions, up from 21% in last year’s report.

Shannon Smith, director of advisory services at Grant Thornton KZN, said there was room for improvement in South Africa.

“The percentage of women in senior management roles in South Africa is inadequate.

“The gender bias is subtle at the beginning of a career, but it causes a clear separation of career paths between men and women. South Africa has a fine tradition of strong women in business and female political leaders, but there is still much room for improvement,” she said.

The empowerment movement gained impetus under previous minister of women, children and people with disabilities, Lulu Xingwana, when she introduced the Women Empowerment and Gender Equality Bill.

The bill annoyed many, especially those in business, who called it impractical and costly.

The bill lapsed when Xingwana left and was replaced by former minister of mineral resources Susan Shabangu.

Parmi Natesan, an executive at the Institute of Directors in Southern Africa, said there were a number of things that could be done to improve gender diversity on boards.

“We need to get the word out to boards and shareholders about the benefit of having women on boards, and not just as a check list exercise.

“Research has shown that when you have women on boards, decision-making improves,” said Natesan.

A 2013 report by research firm Catalyst made a business case for having more women in senior positions and on boards.

Among the benefits were improved financial performance and better corporate governance for companies that had more women.

“If an economy is only using half of its most talented people, then it immediately cuts its growth potential,” said Smith.

“Women also control a large portion of consumer spending globally. So they have an understanding of what consumers want and so should have a representation on these boards,” added Natesan.

But she also cautioned that women should not sit back and wait for opportunities.

“If you [as a woman] think you can add value to a board, get governance training and network.”

Meanwhile, women in business have also started a lobbying effort in the form of the 30% Club. Its objective is to provide best practices for gender mainstreaming in the South African private sector.

The organisation also wants to ensure 30% female representation in senior management by 2018.

The 30% Club concept came about as a result of a conversation between Helena Morrissey, CEO of Newton Investment Management in London, and member of the UK Labour Party Mary Goudie about how few women were making it into top positions.

South Africa started its own 30% Club chapter in September 2013 and it has been endorsed by Business Unity SA (Busa).

“We agree that the level of transformation is not satisfactory, particularly for black women and women with disabilities,” said Vanessa Phala, executive director at Busa.

“What is needed to drive workplace gender transformation are real organisational transformation interventions that move away from numbers and percentages, but emphasise real transformation.

“This includes making sure companies have proper plans to build their pipeline of young women, supporting capacity-building initiatives and most importantly, creating spaces and an enabling environment for women to take over senior and executive positions.”

The Grant Thornton report also showed that among the South African companies that were sampled, only 48% would support the introduction of quotas for the number of women on executive boards of large listed companies, a big drop from 60% in 2013.

Although City Press tried to contact Shabangu, she was unavailable for comment as she was in New York. However, in a recent speech, she said 30% female representation was not ambitious enough and 50% was what women should be aiming for.

“If you look at countries that have a significant proportion of female representation on boards it is those countries that have quotas already,” said Natesan.

But she added that the use of quotas did represent a unique challenge.

“If we don’t have quotas, we might not come right.

“However, the risk of quotas is that it will be about ticking a box and men saying women were chosen based on their gender and not merit, similar to some of the effects of BEE.”

Phala said: “The Employment Equity Act provides clear penalties for noncompliance with measures aimed at achieving affirmative action; it’s not our view that additional penalties will improve compliance.

“What would improve compliance is the commitment from business leadership to embrace and champion transformation.”

Shabangu also said her department was planning to convene national and provincial dialogues between now and June to discuss steps towards the attainment of female empowerment and gender equality in the country.

This will contribute to the development of a report on the status of women that will be released on National Women’s Day on August 9.

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