CGF ARTICLES, OPINIONS & EDITORIALS
Gender diversity in the boardroom (2014-07-30)
February 20,
2015 3754 3754 
Article by Terrance M. Booysen
As South Africa heads toward National Women’s Day -- which has been established as an annual public holiday to commemorate the role women have played in South Africa’s democracy -- it is appropriate to focus on gender diversity in the boardroom and how South Africa is fairing against other developed and developing countries worldwide.
Unlike a number of other business areas where South Africa may not be doing as well as its SADC or BRIC country counter-parts, South Africa is currently regarded as one of the top performers in boardroom gender diversity.
Besides the recommendations provided in the King Report on Governance for South Africa 2009 (King III) which calls upon organisations to consider their board’s effectiveness in terms of its size and diversity; it would appear that local organisations have understood the importance of balancing their boards with women in representation. According to the GMI Ratings 2013 Women on Boards Survey, South Africa is leading the world on gender diversity in the boardroom in the developing countries with 17.9 percent of women occupying board positions whilst only 11 percent of women hold board positions at a global level. Placed at 5
th position overall in the world, South African organisations are well above their BRIC counterparts who trail at 5.1% (Brazil), 4.8% (Russia), 6.5% (India) and 8.4% (China).
The business case for increasing the number of women on boards is clear, with evidence that shows gender-diverse boards have a positive impact upon organisational performance. Indeed, the International Corporate Governance Network (ICGN) provides that constructive debate and independence within the boardroom -- which allow boards to better fulfil their expansive oversight responsibilities -- can be accomplished more effectively by recruiting a board which is diverse in the broadest sense of gender, race, national origin, culture, expertise and thought leadership. That being said, the ICGN emphatically states that a gender diverse board established over the head of a non-gender diverse organisation is “unlikely to be wholly effective” and that “investors will certainly be somewhat cynical about gender diversity grafted on only at the very highest level of a company as this may appear somewhat cosmetic and management’s ability to listen effectively to a full range of views may be in doubt.”
Whilst South Africa is placed ahead of most countries in respect of gender diverse boards, it’s interesting to note the Nordic countries currently lead the world with Norway, Sweden and Finland leading the developed countries with their female board directors at 36.1 percent, 27 percent and 26.8 percent respectively. Japan has the lowest percentage of female directors of all developed countries, with a mere 1.1 percent of women on boards; and South Korea is placed last at 1.9 percent of the developing countries.
Back home, in South Africa there has been a lot of criticism levelled against the Women Empowerment and Gender Equality Bill 2013 which -- amongst other -- imposes a minimum quota of women on boards and other decision making roles. This Bill, if brought into law in its current form, may have a profound impact on the composition of boardrooms across South Africa. The Bill contains one of the toughest gender quotas in the world where designated private and public organisations will be required to have a minimum of 50 percent women on boards and decision making structures.
