DIVERSITY
to a body of non-executive directors, while the management board consists of executive directors. “Women’s continued low levels of representation in senior executive roles in South African companies continues to hamper their chances of becoming executive directors, and they are commonly appointed as non-executive board members. Similarly, in European companies with two-tier boards, women are more likely to be appointed to supervisory boards,” says Prof Bosch. She said that when comparing statistics, one
underrepresented in executive roles in Europe and therefore underrepresented on their second-tier management boards. “With a two-tier board structure, it is thus easier to influence diversity on the supervisory board. Since South Africa has one-tier boards, foreign investors and our trade partners can seek to influence board gender diversity through subtle or direct pressure on South African companies to diversify non-executive directors, in return for monetary investments or export- and import
needs to realise that European board gender diversity numbers are based on supervisory boards. “Similar to South Africa, women remain
contracts. Similarly, South African companies can exert pressure towards racial and ethnic diversity on European boards,” Prof Bosch adds.
Women face a second ‘glass ceiling’ She said that women faced a “second glass ceiling” – once appointed to a board, they are unlikely to be appointed as chairs of the key board committees for audit, nominations, and remuneration. “Significant power and responsibility vests in these committees, especially those chairing them, with direct impact on company policies on financial reporting, board composition and remuneration, even though all board members remain collectively accountable. Studies show that higher female committee representation is reflected in companies having fairer remuneration policies, financial reports of higher quality, and more diverse appointments to boards. Yet, South African companies are struggling to improve on women chairing these committees,” she adds. Prof Bosch said that both one- and two-tier boards should be challenged to place women
in more powerful positions on the board, with a target of either a woman CEO or board chair and targeting female non-executive directors to chair board committees. She said gender diversity on boards could also be enhanced through training and mentoring of potential female directors in corporate governance and board protocols so that they are equipped to make a meaningful impact, while institutional investors should require progress reports on setting and meeting clear targets for diversity. Support should also be provided to existing board members to develop skills of being purposefully inclusive of new board members. Prof Bosch co-authored the report with Stellenbosch Business School research fellow Shimon Barit. The report is available as a free download from www.usb.ac.za/usb_reports/windsof-change-trade-as-a-catalyst-for-board-genderdiversity/
REFERENCES The statistics and figures in this release are all drawn from the Stellenbosch Business School Research Chair in Women at Work report Winds of change: Trade as a catalyst for board gender diversity at https://www.usb.ac.za/usb_reports/winds-of-change-trade-as-a-catalyst-for-board-gender-diversity/
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