No quick fix to ensure real female representation on JSE boards
It is not a lack of talent that resulted in 30 JSE listed companies being without female representation on their boards, and a further 67 that may fall into this category. Rather, it is that female talent lacks deep experience in comparison to their male counterparts, writes Wendy Spalding.
Female board representation on the boards of JSE-listed companies is growing, but there is a long road ahead. And it requires focus from organisations, the firms themselves and C-suite recruiters to redress historic factors still impacting on current business.
The latest Status of Gender on JSE Listed Boards 2018 report, commissioned by the 30% Club Southern Africa (30% CSA), analysed the annual reports of 310 listed companies to discover the gender balancing of boards. It investigated whether JSE listed companies had adopted a board gender policy and whether they were reporting on it as required by JSE listing requirements. (Only 51 publish their gender policy, something that should be addressed in the interests of transparency).
From the perspective of a C-suite executive search and advisory firm, it was good to note South Africa was “generally in sync” with global gender mainstreaming trends. But the findings also highlighted that there is no quick fix to reach the 30% target of female representation on boards that is the raison d’être for the global campaign.
As an aside, the US chapter of the 30% Club reports women on boards is above target while the United Kingdom reports the FTSE 350 hovers just below at 29.9% and in South Africa, the JSE Top 40 is under 20%.
Women of the right calibre
One of the questions that keeps arising, and one that research such as the report serves to answer, is ‘Are there enough women of the right calibre to fill board positions as they arise’?
The answer from Tuesday Consulting is that the pool of experienced non-executive directors in South Africa is largely male due to historic factors that continue to impact on current business.
When new non-executive directors are appointed, a board will typically consider past board experience (the female talent pool is significantly smaller), or individuals who have relevant C-suite experience (once again the female talent pool is smaller).
In the last few years we have seen a significant increase in interest from professional women to participate as non-executive directors on the boards of companies, not necessarily specific to the Johannesburg Stock Exchange.
Typically, an individual would need to get board experience and this may mean that women will initially need to consider boards of smaller, non-listed or non-profit boards to become proficient and knowledgeable in how they work.
South Africa is on the road to ‘developing’ talent. This means boards may need to consider taking risk on less experienced, high potential female candidates and by doing so, corporates will contribute towards growing the pool of female talent.
At the same time, we have to avoid the ‘tick a box’ type of mentality that can be a result of enforced targets. Companies cannot afford to appoint a less-than competent member to the board. There is big pressure on those women appointed to boards to show equal value and contribution.
Beyond ticking the box
Having women on boards goes way beyond ticking a box. Simply put, having more female board members creates better balance and diversity, diversity of thought and experience.
To some extent boards need to mirror the broader stakeholder group they serve and this includes customers, employees, communities, shareholders and industries, all of which have large numbers of women working, buying, leading and making important financial decisions.
The Harvard Business Review, in a report by two leaders of PwC’s Governance Insights Centre, highlighted the fact that team diversity leads to “greater innovation and decision-making”.
Paula Loop and Paul DeNicola said female directors also changed boardroom conversations in other ways, raising issues such as human rights, climate change and income equality. They were of course “better positioned to reflect the views of the women who make up a large percentage of customers, shareholders and employees”.
Executive search firms also have a role to play. One large US company has announced half the number of candidates it submits to clients are women or under-represented groups.
We have a responsibility to educate and expose our clients to a much broader talent pool of potential candidates. We have a responsibility to ensure bias is removed from the selection process, and we have a responsibility to encourage women to actively participate in developing themselves in terms of education and experience.
Corporate South Africa can create greater opportunities for women to gain the necessary experience by creating more executive director opportunities for female employees, increasing alternate director opportunities and creating junior or advisory boards. Unfortunately, there is no quick fix.
Wendy Spalding is business development director at Tuesday Consulting, an executive search and advisory firm.