The Status of Gender on JSE-Listed Boards 2019

THE STATUS OF GENDER ON JSE LISTED BOARDS

THE STATUS OF GENDER ON JSE LISTED BOARDS 2019

2019

SOUTHERN AFRICA AN INITIATIVE OF BUSINESS ENGAGE

A study of the opportunities for gender balancing the boards of companies listed on the Johannesburg Stock Exchange.

3rd Edition © Business Engage Association NPC 22nd October 2020

22nd October 2020

© Business Engage Association NPC

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CONTENTS PART 1 INTRODUCTION 1

Foreword

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The 30% Club

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Reading this report

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Why this research

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PART 2 THE RESEARCH 5

Basis of this research

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Methodology

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The Results

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Companies Analysed

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Opportunities for women on boards

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New opportunities for women on boards

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No opportunities

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Gender Policy Linked to BEE

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Targets set

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Targets already achieved

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Parity realised

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No women members on board

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“One & Done”

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Board Ratios

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Communicating with your stakeholders

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PART 3 AN ANALYSIS CONTENTS

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PART 4 ANNEXURES

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ANNEXURES

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CONTACT US

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PART 1

INTRODUCTION

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1. Foreword Welcome to this the third report by the Business Engage Association NPC and the 30% Club Southern Africa (30%CSA), in association with Tuesday Consulting and the Institute of Directors South Africa, on the effect of the Status of Gender on JSE Listed Boards; A study of the opportunities for gender balancing the boards of companies listed on the Johannesburg Stock Exchange.

This year, for the first time, we welcome the research undertaken by Tuesday Consulting, a long-standing member of the 30% Club Southern Africa, on “An exploration of whether the recruitment, development and retention practices in JSE listed companies enables greater representation of women appointed as non-executive directors” which forms Part 3 of this document. When we first launched the research we mentioned that we were first concentrating on the quantitive aspects of this environment to obtain benchmarks and we would then start with the qualitative work. Tuesday Consulting kindly agreed to kickstart this portion of the report.

In the foreword to the research last year I quoted a former British Prime Minster as saying that a week is a long time in politics and noted that a year is a long time in Gender Mainstreaming in the corporate sector. Little did I realise that the year between the last report and now would feel like a lifetime for some people. We have been alluding to the fact, for a while now, that it is not business as usual out there even 22nd October 2020

© Business Engage Association NPC

Colleen Larsen

F. Inst. D; CEO Business Engage Association NPC and President 30% Club Southern Africa and East Africa.

without factoring in A.I. and the fourth Industrial Revolution. Add Covid 19 to the mix and you have uncertainty by the bucket load. It is maybe far too early to put figures on the effect on women on boards in South Africa, however articles around Covid 19 and gender in the workplace generally abound.

A recent article in the UK’s Business Leader noted ”Environmental, social, and governance (ESG) concerns are now mainstream, and companies are finally beginning to recognise that addressing these is not a nice to have or a boxticking exercise – they are instead fundamental pillars of successful, sustainable business that will be fundamental in driving the recovery and shaping future society. One particularly deep rooted and persistent inequality is that of female

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representation on company boards. It is an area that has improved in recent years, yet more still needs to be done.” They are quick to note that “a particularly lofty ceiling was smashed when Citi revealed Jane Fraser would be its next chief executive – the first time a big Wall Street bank will be led by a woman.”

Whilst we do not mention in this report the number of females C.E.O.’s, we do note that of those companies included females make up 13% of the executive directors. Business Leader narrowed in on this position thus “Research last autumn showed that only 7% of FTSE 100 companies had a female chief executive officer at the helm (the figure is 6.4% for the S&P 500), while FTSE 250 firms have even fewer female CEOs with just five companies having a woman leading the business.”

In late July, the IMF warned that if no action was taken, 30 years of progress for women’s economic opportunities could be erased in a matter of months. It is a warning we should all be taking extremely seriously. Put simply, increasing women’s involvement in the workplace is now more important than it has been for a generation.

According to the Financial Management magazine a report by the International Labour Organization published in June found that women are at a greater risk of unemployment because more women than men globally are employed in the worst-hit sectors, notably in hospitality and retail. The UN agency warned that the pandemic could reverse decades of advancement for women in the labour market and worsen gender inequalities. If this is true

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then it may be detrimental to the pipeline to the board.

Similarly, A study by the universities of Cambridge, Oxford, and Zurich on US and UK workers found that in April 2020 when lockdown measures were in place, women spent more time in childcare and home-schooling compared with men.

From the above it has to acknowledged that those women in the boardroom, both experienced and new, and those aspiring to get there are operating in very uncertain times.

As we all know whilst uncertainty may crease doubt, it also creates opportunities. We are going to see over the next few years what South African business women are made of and can they rise to the challenge. In order to rebuild the country to what we are all desiring, they have to!

In conclusion my thanks go to the Institute of Directors South Africa, Tuesday Consulting and all of the companies and individuals that we interact with on an ongoing basis. You continually enrich all of our lives.

Colleen Larsen F. Inst. D.

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2. The 30% Club The 30% Club is a global campaign led by Chairs and CEOs taking action to increase gender diversity at board and senior management levels. Under the leadership of Global Chair, Ann Cairns, the campaign continues to expand its international footprint with presence in fourteen countries/ regions around the world.

The 30% Club sees diversity in its very broadest sense and while gender has been the starting

point, there is a realisation that considerations of ethnicity, disability, sexual orientation, socioeconomic background and beyond are all part of the journey - and that gender identities are themselves evolving rapidly. Only those organisations that foster truly inclusive cultures - cultures that embrace women who look, act and, importantly, think differently - can reach their full potential to positively impact their people, their markets and their communities.

Global Mission At least 30% representation of all women on boards and C Suites globally.

Global Strategic Pillars Activate Chairs and C.E.O.’s as members Influence those with power to drive change Enable future women leaders

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3. Reading this Report In order to make comparisons between this year’s report and that of the last two years we have included the previous year’s figures in brackets after this year’s figures. The first figure in the brackets refers to 2018 and the second figure to 2017.

This report is historical in nature. The reason being that the information is sourced purely from the Intergrated Annual Report of the

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various companies. Many companies have their year end as at 31st December which means that the report may only be published well into the subsequent year. As membership of the JSE is dynamic the listings of the companies changes from time to time. The information contained in the report is correct as at the time of colating the information, errors and ommisions excepted.

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4. Why this research?

This report is in response to the often-asked questions; • “What are the opportunities for women on boards in South Africa?”

• “Why are there not more women on the boards of listed companies?”

• “Are there enough women of the right calibre to fill board positions as they arise.”

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It is important that we keep gender mainstreaming at board level at the forefront of our thinking. As we say every year the authors are at pains to point out that this report is intended to be constructive as opposed to a reproachful document. We must celebrate the good news and understand and dissect the not so good.

We make no comment as to what we believe companies should be doing.

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30% Club

THE STATUS OF GENDER ON JSE LISTED BOARDS 2019

30% Club www.30percentclub.org GR OWTH TH R OUGH DIV ERSI TY

www.30percentclub.org The 30% Club is a group of Chairmen, CEOs and Senior Partners voluntarily The 30% Club is a group of women Chairmen, committed to bringing more onto CEOscorporate and Senior Partners voluntarily boards because committed to bringing more women onto it makes business sense.

SOUTHERN AFRICA AN INITIATIVE OF BUSINESS ENGAGE

corporate boards because it makes business sense.

Growth Through Diversity

Growth Through Diversity An initiative of

An initiative of

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For more information on the 30% Club Southern Africa please contact : Colleen Larsen on 084 353 9865 or colleen@businessengage.co.za © Business Engage Association NPC 22nd October 2020

THE STATUS OF GENDER ON JSE LISTED BOARDS 2019

PART 2

THE RESEARCH

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5. Basis of this Research This research focuses on: 5.1

If the board of JSE listed companies are adopting a board gender policy and whether they are reporting on such policy in terms of the JSE listing requirement item 3.84i (previously 3.84k and renumbered with effect from 19 June 2017) which states;

“the board of directors or the nomination committee, as the case may be, must have a policy on the promotion of gender diversity at board level. The issuer must confirm this by reporting to shareholders in its annual report on how the board of directors or the nomination committee, as the case may be, have considered and applied the policy of gender diversity in the nomination and appointment of directors. If applicable, the board of directors or the nomination committee must further report progress in respect thereof on agreed voluntary targets;

It is now three years since the JSE listed companies have been required to have a gender policy at board level. This time should have enabled the board to gather there thoughts and begin to implement their decisions.

5.2 As noted last year, apart from the research contained in Part 3, we are no longer analysing whether companies rotating directors creates any opportunities for women on these specific boards. We have proved conclusively over many years that this is in fact not the case.

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6. Methodology Part 2 of this report has been compiled from information publicly available in the form of company Integrated Annual Reports for the reporting period 1 January 2019 to 31 December 2019.

Part 3 has been compiled by interviews conducted by Tuesday Consulting as noted further in that section.

During the research period of this report there were 330 (354,365) companies listed on the main and AltX boards of the Johannesburg Stock Exchange. Note that this figure varies from time to time as new companies are listed and existing companies are either suspended or entirely delisted for whatever reason. Subject to the qualifications below, these listed companies form the basis of the research. All newly listed companies will be covered in subsequent reports where not covered already.

Of the 330 companies noted above; 17 were suspended at the time of compiling this report 17 reports could not be found by way of an internet search.

5 companies are including in reports published by other companies within the same group (Grindrod, Investec and Tsogo Sun).

This resulted in 39 (44,98) companies being omitted from the research. This then left a total of 291 (310, 267) companies analysed.

400

300

330 291

200

100

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Total Companies

17

22

Suspended from JSE

Omitted from Research

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Analysed

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7. The Results Companies Analysed This year we analysed 291 companies.

53 (31, 50) did not specifically report on gender at board level in 2019. At 18% (10%,19%) of those companies analysed this is a significant reversal from last year and is very close to the levels seen in the first year of the research. We noted last year that we would expect to see another significant drop this year in companies not reporting and thereafter it may take a while for the “last man standing” to finally get with the programme. This is clearly not the case.

Of the 51 companies that did not report, 8 have never reported in the three years of this research, or if they have their commentary is very opaque.

300 291

238: 82% 200

100

53: 18% 0

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Total companies analysed

Reported

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Did not Report

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Opportunities for Women on Boards There are 56 board opportunities in 50 companies for women contained in the annual reports for 2019. Add this to the 51 positions noted in 2018 and the 84 positions noted in 2017 we have a total since the regulations were introduced of 191 new board positions for women.

Opportunities 100

84

75

50

56 51

25

0

2019

2018

2017

New Opportunities for Women on Boards The 56 board opportunities noted in the previous section are all new opportunities. Where opportunities have been noted in 2018 and 2017 but these opportunities have not yet been realised they have not been added to the 2019 figure.

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Realisation of Opportunities The realisation of opportunities will be noted on the Business Engage website www.businessengage. co.za in order that the information may be kept up to date. This information will include; • • • •

Opportunities that have been realised.

Opportunities that are still in the pipeline.

Opportunities that have lapsed.

Any other determining factors of note.

As noted in previous reports we do not as a country appear to be suffering from the “Golden Skirts” syndrome where a few usually politically well connected select women are appointed to multi boards at the expense of other women.

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No opportunity It is considered that there are no current opportunities for women at 55 (104.105) companies that reported. This is down significantly from the previous two years. The main reason for the change appears to be the appointment of women to the boards in line with the board gender policy.

There are a number of reasons for no opportunities considered to be available; • • • •

Targets noted have already been achieved.

Appointment of female board members have been made regardless of whether targets exist or not.

The board is satisfied with current gender mix.

The board is satisfied with the experience and skill set of the current board members (and presumably can see no good business reason as to the need to change unduly).

• The board size does not warrant change.

• The report suggests for any other reason opportunities are unlikely.

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Gender Policy Linked to BEE As in previous reports the linking of gender policy to the race policy by the JSE Listed companies is still the exception rather than the norm.

Targets Set 104 companies have set themselves voluntary targets (although strangely not all companies report on what those targets actually are). This is up from the 81 noted last year. To date, twice as many companies analysed prefer not to set actual targets as those who have committed to a specific figure.

This aligns to the research in Part 3.

Target set 36.0%

No target set 64.0%

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Targets Already Achieved Of those 104 companies noted above 62 (58,37) companies have already achieved their targets in terms of their gender policy. We have noted in previous reports that many of the companies that have set specific targets have taken a medium or longer term view.

Noted but not met 40.0%

Met 60.0%

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Parity Realised 17 (19,10) companies analysed have already achieved gender parity or better, down slightly from last year. A further 41 (35,7) companies are close to achieving parity whereby the appointment of one female to the board in place of a male member will achieve such parity. This is a steady climb from a year ago and a massive leap since 2017. As noted previously, we are not suggesting here that these 41 companies have any plans to achieve such parity. For clarity a company is considered to have achieved parity even where there is an uneven number of board members and there is no gap in the split of members i.e. 6 males and 5 females on the board.

Parity Achieved 6.0% Near Parity 14.0%

No parity Achieved 80.0%

No women members on board This is a statistic that a lot of commentators take note of. At the date of publication of their annual reports there were 28 (30,32) companies that we surveyed that still have no female members on their board. We noted last year that this is out of sync with global trends. It would be interesting to understand what the position of the shareholders is on this topic.

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“One and Done” This category was first mentioned last year. It has been occasioned by the Hampton Alexander Review a while back wherein the review noted that a number of U.K. companies appear to have taken a “one and done” attitude. Last year there were 67 possible companies surveyed who may fall into this category.

This number has now reduced to 50 companies. As previously noted it is not our intention to name these companies as, whilst they may only currently have one board member, we are sure that a number of them are merely on their journey and will not stay on one for a long time.

Board Ratios In the 291 companies analysed there are a total of 2,281 members of the boards made up of 1722 males and 559 females.

Executives: Total number of executives; Males 543 Females 82 Non-Executives: Total number of non-executives; Males 1179 Females 477

Female 24.0%

Male 76.0%

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Executive Female 13.0%

Male 87.0%

Non-executive

Female 29.0%

Male 71.0%

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Communicating with your stakeholders It is noted that there are still very few companies that reference a web address directing the reader to the actual gender policy.

Research database may be found at

www.businessengage.co.za

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PART 3

AN ANALYSIS

An exploration of whether the recruitment, development and retention practices in JSE listed companies enables greater representation of women appointed as nonexecutive directors Compiled by Tuesday Consulting, supported by Ntokozo Nkosi (Research Consultant) BA (Hons) Psych, MSc Research Psych (2021).

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CONTENTS 1

Introduction

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2

Purpose of intervention

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2.1. Enhancing board independence

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2.2. Encouraging professional development

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2.3. Nomination, election and appointment of non-executive directors

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2.4. Rotation and succession of directors

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Research question, aims and objectives

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4

Research methodology

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4.1. Research Design

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4.2. Sampling

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Results

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5.1. Research themes

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5.1.1.Gender policy

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5.1.2.Recruitment or appointment of non-executive directors

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5.1.3.Encouraging professional development

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5.1.4.Retention, rotation and succession

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Discussion and conclusion

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7

Works Cited

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LIST OF FIGURES Figure 1: Non-executive directors by gender. Retrieved from PwC South Africa Non-Executive Director’s: Practice and Fees Trends Report (2019)

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Figure 2: Emerging themes

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1. INTRODUCTION International research shows that there are positive impacts of having boards with greater female representatives such as increased sustainability reporting, which may be viewed as a core element of good corporate governance and reporting to stakeholders (Buallay, Hamdan, Barone, & Hamdan, 2020), Waweru (2020) found that corporate governance characteristics such as proportion of government ownership, board independence and board gender diversity are positively and significantly related to business ethics disclosure, which they have found to legitimize companies in Sub-Saharan Africa.

Such research reflects the significance of gender diversity, amongst others, in good corporate practice.

The 2018 Gender Gap Report, ranked South Africa 70th for gender representation among all overall legislators, senior officials and managers with only 32.1% female representation. Inclusive diversity in regards to gender and ethnicity is not only a matter of corporate social responsibility, but is also essential to the company’s overall growth strategy as inclusivity and diversity can be regarded as a source of competitive advantage (PwC, 2019). The graph below is a representation of non-executive directors by gender:

Non-executive directors by gender

Female 20.1%

Male 79.9%

Figure 1: Non-executive directors by gender. Retrieved from PwC Non-Executive Director’s: Practice and Fees Trends Report (2019)

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The Status of Gender diversity in South Africa is further substantiated by the 2020 report from the University of Stellenbosch Business School report titled “Women on South African boards: facts, fiction and forward thinking” which corroborates the statistics above. The report further addresses the misconceptions surrounding gender diversity. These misconceptions include that there are not enough women qualified to serve on boards and that the few suitable women are over boarded and thus neglect their directorial duties (Bosch, van der Linde, & Barit, 2020).

The results from these reports are instrumental in providing a benchmark for the assessment of gender transformation in terms of compliance to the JSE gender policy requirements, the opportunities available to women on board level and the challenges in meeting these goals.

While these reports are critical in evaluating the status of compliance and identifying challenges, it is also essential to explore the gender policies and practices that are being implemented to determine whether the organisations truly foster greater representation of women on board levels.

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2. PURPOSE OF INTERVENTION It has been identified that while the Status of Gender on JSE listed boards report is critical in the evaluation and assessment of gender policies and reporting, it is also essential to explore whether these policies and practices serve their purpose. Therefore, the purpose of this enquiry was to qualitatively explore whether gender policies and practices in JSE listed companies truly enable and foster gender transformation and the representation of women at board level. The goal of this enquiry is to explore the recruitment, development and retention practices at board level, focusing on nonexecutive directors, and to assess whether they are progressing gender transformation.

In 2017, the JSE adopted the King IV Report on Corporate Governance and its amendments, which included the adoption of a policy on gender within JSE listed companies (LexisNexis, 2017). Principle 7 of King IV states that the board should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively. This principle also provides guidance on non-executive members with regards to their role in • • • •

Enhancing board independence Encouraging professional development Nomination, election and appointment of non-executive directors Rotation and succession of directors

These aspects are of importance to this enquiry as they provide a standard which can later be used as reference point for the findings of this enquiry.

2.1. ENHANCING BOARD INDEPENDENCE King IV states that, as a matter of law, all directors should exercise independent judgement in the best interest of the company. Therefore, steps should be taken to include a number of non-executive directors and at least one independent non-executive who serves as chair. Point 7b of the Principle 7 states that an appropriate mix of executive, non-executive and independent non-executive members is required when determining the requisite number of members of the governing body and point 8 states that the governing body should comprise a majority of non-executive members, most of whom should be independent.

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2.2. ENCOURAGING PROFESSIONAL DEVELOPMENT Inexperienced non- executive directors should undergo corporate governance training so that they are adequately equipped to fulfil their fiduciary duties. Point 10 of the Guidelines states that the governing body should promote diversity in its membership across a variety of attributes relevant for promoting better decision-making, effective governance, including field of knowledge, skills and experience as well as age, culture, race and gender and point 11 states that the governing body should set targets for race and gender representation in its membership

2.3. NOMINATION, ELECTION AND APPOINTMENT OF NON-EXECUTIVE DIRECTORS Point 17 of the Guidelines points out that nomination for re-election of an incumbent of the governing body should be considered by the governing body on the basis of that member’s performance, including attendance of meetings of the governing body and its committees.

The Principle further supplements this by adding that while many SMEs may not have a separate nominations committee to deal with the selection and nomination of new directors, it is recommended that the board charter clearly outlines the nomination, election and appointment process, the knowledge, skills and experience required from directors and any other specific requirements. Once a number of non-executive directors are serving on the board, the formation of a nominations committee should be considered. Furthermore, non-executive directors should be formally appointed, and fees and obligations agreed upfront.

2.4. ROTATION AND SUCCESSION OF DIRECTORS In order to ensure that there is a balance of power as envisaged in Principle 7, the board needs to ensure that non-executive directors are rotated on a regular basis so as to maintain objectivity, which is one of the non-executive director’s primary contributions. At the same time, care must be taken to protect the required institutional knowledge. For a SME, too-regular rotation may not be practical or feasible and thus non-executive directors may serve for longer periods than in larger companies.

Point 29 if King IV also states that a non-executive member of the governing body may continue to serve, in an independent capacity, for longer than nine years if, upon assessment by the governing body it is concluded that the member exercises objective judgement and there is no interest, position, association, or relationship, which, when judged from the perspective of a reasonable and informed third party, is likely to influence unduly or cause bias in decision-making.

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3. RESEARCH QUESTION, AIMS AND OBJECTIVES The research question for this study is Do recruitment, development and retention practices in JSE listed companies enable greater representation of women appointed as non-executive directors?

For the purposes of this enquiry, the focus was on following the aspects with regards to non-executive board members: • Recruitment or appointment of non-executive directors • Professional development • Retention, rotation and succession The main objectives of this enquiry are: • Recruitment or appointment of non-executive directors • To identify what initiates/triggers the recruitment of non-executive directors • To determine how the appointment of non-executive directors has occurred in the past • To identify the competencies that are considered in recruitment, nomination or election (e.g. formal education, sector experience, functional experience etc.)

• To determine if and how the implementation of a gender policy has governed the process of non-executive director appointment?

• Encouraging professional development • To determine how companies, ensure that selected non-executive board members remain relevant and competent for the job • To determine if newly appointed board members are offered development opportunities and what those are • To identify company mechanisms for the development of aspiring and less experienced board members • To determine if and how development has been incorporated into the gender policy • Retention, rotation and succession • To identify retention, rotation and succession procedures • To determine if and how women in non-executive board positions are encouraged to remain/ are retained

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4. RESEARCH METHODOLOGY 4.1. RESEARCH DESIGN The aim of this enquiry is to provide contextual insight from CEOs, and Chair of Nominations Committees of JSE listed companies to establish how they have implemented a gender policy and to understand their recruitment, development and retention strategies. Therefore, a qualitative approach is most appropriate for this. The focus of qualitative research is to gain an understanding of a specific organization or event, rather than a surface description of a large sample of a population.

4.2. SAMPLING It was decided to identify a number of JSE listed companies to approach for this enquiry. Inclusion consisted of current members of the 30% Club as well as other non-member JSE listed companies.

22 interviews were conducted with CEO’s, Chairperson of Boards, Chairs of Nominations Committees, Group Company Secretaries and Group Human Resources Executives across 12 sectors of the JSE.

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5. RESULTS Findings from the qualitative enquiry are presented below. Findings will be grouped according to themes which arose from each of the major objectives

5.1. RESEARCH THEMES Several themes have emerged from this research enquiry, which will be further elaborated on.

Gender policy

• Diversity • Transformation

Recruitment or appointment of nonexecutive directors

• Formal recruitment process • Outsourcing • Skills and competency diversity

Encouraging professional development

• Induction programmes • Experience over qualifications

Retention, rotation and succession

• Skills audit • Maintaining independence • Succession plannning

Figure 2 : Emerging Themes

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5.1.1. GENDER POLICY The importance of diversity and transformation Findings from the study highlighted that organisations overall are committed to transformation.

Organisations realise the importance of diversity in general, not just pertaining to gender, but also race, beliefs, competence and a generational mix. “organisations that are going to survive are the ones who are going to embrace diversity.”

While some organisations have a specific policy on gender or have adopted the JSE gender policy, others have a gender policy incorporated in a wider diversity policy, that focuses on inclusion and transformation of the greater organisation.

5.1.2. RECRUITMENT OR APPOINTMENT OF NONEXECUTIVE DIRECTORS Outsourcing of board member recruitment Recruitment is typically outsourced to Executive Search firms who present appropriate candidates to the nominations committee. Typically, due to the seniority of these positions, should a board position be vacant, board members or shareholders may also recommend individuals who they believe are competent to fill these positions The use of a formal process for recruitment and appointment With regards to the appointment of non-executive directors, most organisations expressed that their recruitment follows a formal process, governed by policy, using a nominations committee, which then shares their recommendations with the board and a final decision is made by shareholders during an annual meeting. The role of the nominations committee is to ensure that board members with the right skills and competencies are appointed and to keep executives accountable.

Skills and competency diversity With regards to the competencies of board members, all organisations expressed that the competencies that they are looking for in board members are guided by the needs and strategy of the company, which are the main determinants of appointments, over and above gender or diversity targets. “it would be a misnomer if board selection focused only on appointing women, without focusing on integrity… skills, knowledge and how you communicate with other board members and the public.”

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Organisations are also cognizant of the need to diversify skills at board level in accordance with future trends, such as digitization and the fourth industrial revolution, and of the importance of diverse board members who bring in new perspectives and ways of thinking.

Sought after competencies for board members include independence, deep technical skills, relevant skills, knowledge of governance and experience at a senior executive level.

5.1.3. ENCOURAGING PROFESSIONAL DEVELOPMENT Induction and continuous programmes as a means to ensure board members are knowledgeable When it comes to ensuring that board members remain relevant, some organisations shared that board members are taken through a rigorous induction programme.

One company in the ICT sector, also expressed that for the organisation, development of its board members is a continuous process, and that NEDs are expected to participate in a continuous development programme which is a structured process that measures impact and return on investment.

One organisation shared that they have a Chairman’s programme and another shared that they have also started a board development programme where a female candidate will be an observer and have an opportunity to attend board meetings.

Experience over qualifications Almost all organisations stated that due to the seniority and critical importance of the board positions they only recruit individuals who are highly experienced and seasoned, as in their opinion past experience is the best teacher.

“No such thing as a developing board member.”

One of the trends previously noted by the 30% Club is that individuals who complete related Director development qualifications do not get more board opportunities. Organisations shared that they do not feel that board qualifications alone readies individuals for board membership as board membership also requires a high level of experience. “there are barriers experienced by women, but academic qualifications are not what fill that gap.”

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5.1.4. RETENTION, ROTATION AND SUCCESSION Skills audits as a means to ensure board members are still competent As previously mentioned, skills audits are also conducted by some organisations to ensure that the board still meets the needs of the organisation. A life insurance company shared that they do a board assessment each year, one year it’s an internal assessment and the second year an independent outside third party interviews all the board members to ensure the relevance and contribution of its members.

Succession planning In some organisations, succession plans come into place at the end of an existing board member’s tenure or retirement, or if an annual review of business strategy deems it necessary for a new set of skills for a particular board position. For most organisations, board member tenure is nine years and the retirement age is seventy. After tenure or retirement age has been reached, members are expected to participate in the appointment process, along with other potential candidates and may be reinstated by shareholders, or a succession plan takes effect. Most organisations interviewed were able to be proactive in the succession plans for board members.

Maintaining independence Board members are expected to maintain independence. As such, most organisations shared that the board composition is reviewed annually to ensure independence, particularly with long standing members.

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6. DISCUSSION AND CONCLUSION The major finding of this research enquiry is that while gender, diversity and transformation as a whole are embraced by JSE listed organisations and regarded as critical and beneficial - the priority when appointing non-executive board members is primarily that candidates with the right skills, competencies and experience are appointed. The argument that gender diversity generally improves board performance is acknowledged, nevertheless it will not force the appointment of females on the board as a tick box exercise. Of utmost importance are the leadership and experience requirements to deliver on the company strategy and shareholder’s returns.

Another critical finding is that there is little professional development offered by organisations for aspiring non-executive directors. Organisations expect that candidates are already highly experienced and knowledgeable. As such, participants largely expressed that they do not believe that academic qualifications pursued with the intention of becoming a board member increases one’s chances of becoming a board member. Experience and performance have a larger focus as opposed to qualifications, gender and race. It is encouraged that aspiring non-executive directors gain experience with pro-bono board appointments, such as subsidiaries of JSE listed companies for exposure, experience and networking.

With regards to recruitment and appointment of non-executive board members, formal processes were pursued and while recruitment is typically outsourced to Executive Search firms, it is still common practice that board members will nominate or recommend individuals known to them based on their own networks.

Ensuring the competency of existing board members was also a strong theme that emerged from the findings. Annual skills audits and succession plans are an active component to support this. Whilst greater diversity and female representation is something that companies are actively working towards (and most companies have made strides in meeting) it is also apparent that there is no particular focus on the retention of women on boards.

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7. WORKS CITED Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative research in psychology , 77-101.

Cropley, A. (2019). Qaulitative research methods: A practice-oriented introduction for students of psychology and education . Riga, Lavtia: Zinatne.

Deloitte, adapted from King III Report Annex 2.3. (2014). The different types of directors . Deloitte.

Gender inclusion in the workplace benefit the country and our economy. (2019). Retrieved from Johannesburg Stock Exchange : https://www.jse.co.za/articles/Pages/Gender-inclusion-in-theworkplace-benefit-the-country-and-our-economy-.aspx Institute of Directors Southern Africa . (2016). King IV Report on Corporate Governance for South Africa 2016. Institute of Directors Southern Africa .

Lehobo, L. (2011). The Relationship Between Gender Diversity and Corporate Identity: The Top 100 Companies on the JSE Ltd. University of Johannesburg: Minor Dissertation: Masters in Financial Management.

LexisNexis. (2017, 05 25). The JSE Limited Listings Requirements: Bulletin 1 of 2017. Retrieved from https://www.jse.co.za/content/JSEBulletinItems/Limited%20Listings%20Bulletin%201%20 of%202017.pdf Pande, R., & Ford, D. (2012). Gender Quotas and Female Leadership. In WORLD DEVELOPMENT REPORT 2012: GENDER EQUALITY AND DEVELOPMENT. Retrieved from https://openknowledge.worldbank.org/bitstream/handle/10986/9120/WDR2012-0008. pdf?sequence=1%EF%BB%BF&%EF%BB%BFisAllowed=y PwC. (2019). Non-executive directors: Practices and fees trends report. PwC. Research methods data collection strategies: qualitative research . (n.d.). Retrieved from https://web.csulb.edu/~msaintg/ppa696/696quali.htm The Global Gender Gap Report 2018. (2018, December ). Retrieved from World Economic Forum: https://www.weforum.org/reports/the-global-gendergap-eport-2018 The Status of Gender in JSE Listed Boards . (2017).

The Status of Gender in JSE Listed Boards . (2018). Business Engage.

What is the role of the JSE? (n.d.). Retrieved from Johannesburg Stock Exchange : https://www.jse.co.za/grow-my-wealth/what-is-the-role-of-the-jse Who We Are: The 30% Club. (n.d.). Retrieved from https://30percentclub.org/about/who-we-are

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PART 4

ANNEXURES

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All annexures can be found at www.businessengage.co.za Annexure A Board Level Gender Policy Comments noted in Annual Reports Annexure B Opportunities for Women on Boards 2019 Annexure C Update on Opportunities for Women on Boards 2017/2018 Annexure D Targets Already Met Annexure E Parity Achieved / One move away from Parity Annexure F Targets Set Annexure G No Apparent Opportunity Annexure H Companies not reporting a specific gender policy Annexure I Companies not considered in this report

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INVESTING IN PEOPLE

Consulting is rooted in Local, Social, Tweuesday Conscience. Simply put, in our world it means recognise the need to be acutely socially aware,

commercially astute and we have a burning desire to develop a sought-after culture of South African and ultimately African excellence. Tuesday Consulting is one of the co-founding members of the 30% Club Southern Africa.

ur purpose is derived from ‘Investing in People’ O so that our undertakings help build not only the companies and individuals we serve, but ultimately the

communities around us. This underpins our culture. We recognise it as multi-faceted and apply it equally in our own lives, those of our corporate clients, our candidates and our business partners spanning the Human Capital Ecosystem.

OUR SERVICES Executive search; targeted research; talent advisory; career development.

Our suite of services empower clients to identify and retain the right people for their organisation and culture.

The research model we offer adds benefit by way of qualitative market intelligence, insights into remuneration levels and skills availability, plus competitor awareness and trends in talent management and organisational design.

OUR EXPERTISE We focus at the Board; Executive; Senior Management and Specialist levels.

We build deep knowledge and relationships by investing in ongoing research within each sector, including: financial services; Consumer; Retail; ICT; Education; FMCG. OUR CLIENTS By partnering with clients across industries in which we specialise and have superior understanding, we become true ambassadors, sharing insights that will enhance employee value propositions.

OUR PEOPLE Our professional team are subject matter experts with a solutions based approach to assignments.

Tuesday Consulting is characterised by individuals with strong ethics, respect, trust and the motivation to deliver the best possible service to our clients.

We live by the ethos of ‘investing in people’ and are passionate about building a business recognised for excellence and having a genuine Local, Social, Conscience.

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Wendy Spalding is a Director of Tuesday Consulting with more than 20 years’ experience. Her specialities include executive search; identifying and engaging with highly skilled talent pools; providing talent mapping research and critical intelligence and career coaching. She is committed to the development of education and is a Director and Deputy Chair of School Aid South Africa.

T

+27 11 325 2802

E

info@tuesday.co.za

in

Tuesday Consulting

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GET IN TOUCH MALCOLM LARSEN 084-308-2645 malcolm@businessengage.co.za www.businessengage.co.za www.30percentclub.org www.genderawards.co.za

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