SA achieves 4th best place globally for appointments of women to chair company boards
South Africa is making headway in appointing females to chair boards, according to Deloitte’s Women in the Boardroom global survey, which ranks the country fourth-highest in the world. Italy at 22.2% and Norway at 18.2% take the two top spots, but South Africa’s 7.8% percentage female-held board appointments is just behind third-placed Austria, where 9.1% of board chairs are women.
“This is an important achievement, as the global average is only 4% for board chairs – we are also above the 5% average for the Europe, Middle East and Africa grouping. Clearly, there is still a long way to go and more companies need to make strides in this direction, but we are making progress we can be proud of,” says Johan Erasmus, Director, Deloitte.
South Africa, at 17.5%, is at ninth place for the percentage of total board seats occupied by women.
The countries above South Africa in the survey - was based on a dataset covering nearly 6,000 companies in 40 different countries - are all from Europe, with Norway leading with 36.7%.
“It really tells a story of how South Africa is encouraging change and striving for diversity. At Deloitte, we believe gender diversity is a business imperative - the benefits just cannot be ignored. Different perspectives can result in less risky and enhanced decision-making, and a better representation of stakeholders’ interests. There is no doubt that a gender diverse team produces a better result. We have definitely realised this and celebrate it. This has been critical to our success as a diverse professional services firm, and is certainly something we consciously work at in our firm,” says Sudasha Naidoo, Chairman, Deloitte Women in Leadership Committee.
Deloitte South Africa’s recent partner appointments reflected a record 50% female partner appointments. A milestone in the South African firm which was supported by Deloitte’s programme of mentorships, corporate governance for female directors as well as Deloitte Women in Leadership pioneering several initiatives to attract, develop and retain key female talent.
However, the road ahead will be bumpy as the global perspective finds not enough top positions are occupied by women.
“As the averages in the survey show, we are still a long way from closing the traditional gender gaps that have existed,” says Erasmus.
According to the World Economic Forum (WEF), compelling findings regarding the benefits of gender equality are emerging from companies. It says companies that include more women at the top levels of leadership tend to outperform those that don’t. And with a growing female talent pool coming out of schools and universities, and with more consumer power in the hands of women, companies who fail to recruit and retain women—and ensure they have a pathway to leadership positions—undermine their long-term competitiveness.
South Africa ranks 18th in the WEF’s 2014 Gender Gap Index, with Iceland in first place and the US only 20th and the UK 26th.
But major moves are afoot to close these gaps around the world as the benefits of diversification are realised. The 30% Club in the UK, for example, is driving to have 30% representation of women on boards by the end of 2015. According to Forbes the 30% Club asserts that diverse boards make companies more efficient, effective and ultimately, more profitable.
While South Africa has made strides to improve its gender diversity, pressure is building to do more. According to the GMI Ratings 2013 Women on Boards survey, women held 11% of board seats globally, with South Africa ranking fifth in the world, with 17.9% female representation on the boards of the 59 companies included in the research.
The Deloitte survey shows a total of 12% board seats are occupied by women, with Asia Pacific at just 6% the worst performer. Europe, the Middle East and Europe leads at 18%, while 12% of board seats in the Americas are occupied by women. The industries with the highest levels of women on boards were found to be consumer business, at 13.6% and financial services, at 12%.
In South Africa, the Women Empowerment and Gender Equality Bill suggested a 50% quota for board membership for women on large companies, but it lapsed in Parliament. However, Erasmus says: “I would not be surprised if they re-introduce it. It should come into play again.”
The Broad-Based Black Economic Empowerment Act also embodies government’s efforts to “situate black economic empowerment within the context of a broader national empowerment strategy focused on historically disadvantaged people, and particularly black people, women, youth, disabled, and rural communities.”
“The act has played a role in the recent increase in the percentage of women on South African boards,” says Erasmus.
However, almost a decade has passed since Norway enacted a law requiring that 40% of board members of publicly listed companies be women. Since then, other jurisdictions have introduced similar requirements, but the Deloitte survey shows that progress remains slow.
“Some strides have been made, but the change is happening slowly and hard work lies ahead in ensuring a diversity of voices can be heard within the corporate world. The absence of women chairs of boards is revealing and the global statistics mask important differences between countries. More collaboration between organisations and policy-makers is needed to ensure improvements are made in the future,” says Erasmus.