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The fact that over a third of SA’s listed company boards do not have one woman board member is unacceptable, and SA needs to address gender representation and embrace board diversity as a matter of urgency.
This is according to Irene Natividad, a recognised leader for women in the US, who is President of the Global Summit of Women, and co-chair of Corporate Women Directors International, which promotes the increased participation of women on corporate boards globally.
Natividad says that she is horrified that a report released recently by the BWA (Business Women’s Association) states that out of 380 South African JSE-listed companies and state-owned enterprises it was found that only 14.6% of overall board seats are held by women, and that 125 of these companies had no women representation on their board.
“What is even more ridiculous is the fact that some of these companies whose primary target market is women do not have female representation on their boards!” she adds. “How can you sell your products effectively to women when 80% of your customers are female and you have no women on your board?”
Natividad was in SA last week with Corporate Women Directors International who, in partnership with the Johannesburg Stock Exchange (JSE) and the International Women's Forum of South Africa (IWFSA) hosted a ‘Market Open’ (opening of the JSE) marking the first time that South African women directors have done this. “Stock markets around the world can play a special role in leading the move to board diversity. Two years ago Corporate Women Directors International did a market open in NASDAQ and last year in Toronto.”
She stresses that the bottom line is that new players are needed at SA’s boardroom tables. “Not only does board diversity make sense from a fairness point of view, it also makes for a good business strategy,” says Natividad.
“Women can bring different perceptions and understandings to the boardroom table with insight and knowledge and it is a proven fact that the presence of women on a company’s board of directors can assist in facilitating strategic change, increased financial performance, and provide better innovation,” she adds. “Also, by virtue of their position at the top of the corporate hierarchy, female directors can serve other corporate women as role models.”
With regard to her suggestions as to how SA can dramatically undergo transformation, she says that existing laws need to be updated with disciplinary actions attached to ensure inclusion of women directors.
“SA enjoys an advanced economic and financial structure and is young enough as a nation to set in motion initiatives that older countries may ignore,” says Natividad. “The current recessionary environment is a great time to address changes and undertake board diversity, hailing the beginning of a new breed of corporate directors.”
She cites the positive example of Norway, which increased board representation of women from just 6% to 44% from 2000-2009. “They achieved this by changing the law in 2003 and imposing a quota with a two year deadline. Companies not meeting the quota in the specified timeline were faced with having their company dissolved if the quota was not met.”
According to Natividad, Spain has also made strides towards implementing board diversity. In 2007 a law was passed in Spain that requires companies to endeavour to include at least 40% women on boards, including private companies, by the year 2015. “The law recommends rather than obliges, though states that those who comply will have a greater chance of working with public administration in procurement, contracts or public aid,” she explains. “However, because no punitive action has been attached the success of this initiative remains to be seen.”
During her visit, Natividad also attended The Colloquium for Women Directors event last week, which was co-organized by CWDI (which Natividad co-chairs) and the IWFSA. “The event was a forum for women to discuss corporate governance issues in the wake of the current recession, highlighting the fact that one of the most important elements of corporate governance is the structure of the board of directors and the inclusion of women in the mix.”
She points out that while affirmative action and black economic empowerment practices have resulted in increased pressure to achieve greater ethnic diversity on the boards of directors of South African publicly listed companies, since the abolition of apartheid and the election of the first democratic government in 1994, SA’s boardrooms are one place where gender transformation is just not happening.
This is according to Irene Natividad, a recognised leader for women in the US, who is President of the Global Summit of Women, and co-chair of Corporate Women Directors International, which promotes the increased participation of women on corporate boards globally.
Natividad says that she is horrified that a report released recently by the BWA (Business Women’s Association) states that out of 380 South African JSE-listed companies and state-owned enterprises it was found that only 14.6% of overall board seats are held by women, and that 125 of these companies had no women representation on their board.
“What is even more ridiculous is the fact that some of these companies whose primary target market is women do not have female representation on their boards!” she adds. “How can you sell your products effectively to women when 80% of your customers are female and you have no women on your board?”
Natividad was in SA last week with Corporate Women Directors International who, in partnership with the Johannesburg Stock Exchange (JSE) and the International Women's Forum of South Africa (IWFSA) hosted a ‘Market Open’ (opening of the JSE) marking the first time that South African women directors have done this. “Stock markets around the world can play a special role in leading the move to board diversity. Two years ago Corporate Women Directors International did a market open in NASDAQ and last year in Toronto.”
She stresses that the bottom line is that new players are needed at SA’s boardroom tables. “Not only does board diversity make sense from a fairness point of view, it also makes for a good business strategy,” says Natividad.
“Women can bring different perceptions and understandings to the boardroom table with insight and knowledge and it is a proven fact that the presence of women on a company’s board of directors can assist in facilitating strategic change, increased financial performance, and provide better innovation,” she adds. “Also, by virtue of their position at the top of the corporate hierarchy, female directors can serve other corporate women as role models.”
With regard to her suggestions as to how SA can dramatically undergo transformation, she says that existing laws need to be updated with disciplinary actions attached to ensure inclusion of women directors.
“SA enjoys an advanced economic and financial structure and is young enough as a nation to set in motion initiatives that older countries may ignore,” says Natividad. “The current recessionary environment is a great time to address changes and undertake board diversity, hailing the beginning of a new breed of corporate directors.”
She cites the positive example of Norway, which increased board representation of women from just 6% to 44% from 2000-2009. “They achieved this by changing the law in 2003 and imposing a quota with a two year deadline. Companies not meeting the quota in the specified timeline were faced with having their company dissolved if the quota was not met.”
According to Natividad, Spain has also made strides towards implementing board diversity. In 2007 a law was passed in Spain that requires companies to endeavour to include at least 40% women on boards, including private companies, by the year 2015. “The law recommends rather than obliges, though states that those who comply will have a greater chance of working with public administration in procurement, contracts or public aid,” she explains. “However, because no punitive action has been attached the success of this initiative remains to be seen.”
During her visit, Natividad also attended The Colloquium for Women Directors event last week, which was co-organized by CWDI (which Natividad co-chairs) and the IWFSA. “The event was a forum for women to discuss corporate governance issues in the wake of the current recession, highlighting the fact that one of the most important elements of corporate governance is the structure of the board of directors and the inclusion of women in the mix.”
She points out that while affirmative action and black economic empowerment practices have resulted in increased pressure to achieve greater ethnic diversity on the boards of directors of South African publicly listed companies, since the abolition of apartheid and the election of the first democratic government in 1994, SA’s boardrooms are one place where gender transformation is just not happening.
