Gender equity—still some way to go

South African companies have made progress in increasing female representation on boards, but a more strategic approach is needed.

By Parmi Natesan, CEO, Institute of Directors in South Africa

Women make up 45% of the working population and yet only 20.7% of the board members on JSE-listed companies.^[1] A significant number of JSE-listed companies do not even have a single female director. The statistics when it comes to executive teams are even less impressive: only 14% of CEOs, CFOs and executive directors of JSE-listed companies are female.^[2]

State-owned entities are doing better than the private sector in this area, with 42% of all directors in this sector being female.

The ongoing under-representation of women on boards and executive teams is curious given that gender diversity is now a requirement in terms of JSE regulations a King IV recommendation, and is widely accepted as leading to better business outcomes.^[3] In addition, laws relating to broad-based black empowerment and employment equity have stringent requirements relating to gender ratios at various levels in the workplace.

One could argue that corporates still do not fully buy into the business value of greater female participation at the highest levels. At the same time, we must also recognise that women are unfortunately sometimes still relegated to subservient roles in society itself—to an extent, corporates reflect the society in which they exist. However, there are some misconceptions that are hampering the move towards better female representation on boards.

One view is that the same faces keep on cropping up—in other words, efforts to improve gender representivity tend to benefit a small pool of people. Related to this question is the perception that there is still a very small pool of directorial talent on which companies can draw. Nothing could be further from the truth. There is a plethora of qualified women and the number of female graduates is rising steeply. By July 2019, 38% of all CAs in the country were female, and female candidate attorneys outnumbered males between 2010 and 2017.

The need for specialist skills

I must add that being successful in a particular field does not necessarily make someone a good director with the right skills to execute their duties, but these figures show that there is a sufficiently large (and growing) pool of women who are potential directors. The IoDSA has for years been advocating the need for a professional class of directors, and we created two formal designations (Chartered Director and Certified Director) to provide the necessary framework to allow would-be directors to acquire—and demonstrate that they have acquired—the necessary specialist skills, that they can be disciplined in terms of a professional code of conduct, and that they are committed to keeping their skills up to date via a formal programme of continuous education. We are see growing numbers of females being awarded these director designations.

A key issue is the nominations process. Nominations committees tend to perpetuate the status quo and thus draw on the same pool of talent. Nominations committees need to develop new networks to tap into the abundant female directorial talent that exists, and also take a more proactive stance in terms of creating succession plans and pipelines, perhaps by sponsoring younger women to embark on programmes to acquire directorial skills.

Companies also need to recognise that none of this will happen “naturally”, and the process will need to be managed. Setting targets and reporting on them is a crucial part of ensuring change occurs. Another is providing an environment that not only provides for specific female needs, but also is open to alternate ways of thinking and doing. Without this, companies will not attract the best female talent.

In the final analysis, the drive to achieve better gender representivity is unstoppable, especially once the business case becomes widely accepted. Companies that recognise this will steal a march on competitors.