Addressing the gender gap requires effort on both sides of the equation

It is more critical than ever for businesses to reflect the diverse communities they operate in at board level. Women’s presence on boards, specifically, is important, not only because there are solid business reasons for more diversity across organisations, but also because women can provide solutions from a different perspective, or as viewed through a different lens.

With that in mind, Tuesday Consulting, as one of the co-founding members of the South African 30% Club – an organisation committed to achieving better gender balance throughout corporate South Africa – partnered again with the 30% Club this year to contribute to the qualitative research for the report into the State of Gender on JSE Listed Boards.

While the results of that report might seem to indicate that the gender gap on JSE-listed companies’ boards has not narrowed since 2020, there are some encouraging signs that things are shifting.

In summary, the 2020 research (published in 2021) focused on JSE-listed companies with minimal representation of women in non-executive board positions – usually a single woman non-executive director, or none at all. We surveyed a select few to gain insight into the recruitment, appointment, retention and development practices of their boards, specifically in relation to the representation of women as non-executive directors.

Four main themes emerged:

1. All of the participating companies either had formal gender diversity policies in place, or were preparing to institute them, and most included targets for their boards. However, there is a preference for keeping boards small to contain costs, which means fewer vacancies, particularly in small to mid-cap companies, where board members often have a long tenure. A few companies indicated they would be willing to consider gradually increasing the size of their boards to make room for new, more diverse talent, provided that costs allowed, and the appointments brought the requisite skills to satisfy shareholder mandates.
2. Companies appreciate the role that women can play on boards, and see the richness that gender diversity brings to problem-solving and deliberating. Their primary requirement for appointing a new board member, however, would be the candidate’s skills – ahead of diversity considerations.
3. There are common challenges in appointing women to boards: a small pool of skilled candidates, a high demand for women directors, conflict of interest risks, plus the length of time it can take to identify and appoint suitable candidates.
4. The need to look beyond the traditional talent pool and traditional mechanisms of appointing board members. Some of the participating companies reported that they would consider making use of external service providers such as executive search firms to assist them in achieving a better gender balance.

An interesting – and encouraging – perspective that arose was that it isn’t feasible to adopt an “appoint one and be done” outlook towards appointing women to boards. What typically happens is that when a second woman is appointed, it makes it easier for the first one to feel more comfortable, which means she participates more, and uses her voice more.

This demonstrates that even at board level, diversity and inclusion go hand in hand with belonging – regardless of which aspect of diversity is being discussed. Several participants noted that the addition of other women, or a broader diversity of directors, brought a new, productive dynamic to their boards, which further underscores the need for more diversity of all kinds.

Participants noted that prospective board members need to see a potential board appointment as a two-way street. Company boards with low female representation are well aware of the benefits of having women directors as board members and eager to attract more women members, and many say they are also willing to look beyond traditional talent pools, in search of female non-executive candidates with the requisite skills. They are also keen on younger directors.

However, those who hope to sit on a board some day need to do more than just wait to be noticed – that it isn’t policy alone that drives the appointment. Board hopefuls have to take responsibility to develop themselves and raise their profiles.

There are several actions they can take to increase their eligibility such as sitting on subsidiary or NPO boards to gain experience, network, and participate in industry organisations to gain experience and skills, and ensure they are front of mind when nomination committees are considering prospective candidates.

Companies and their boards, however, also need to consciously make a mental shift towards diversity, so that when a director’s term ends, they consider engaging a black woman as a replacement. In addition, they should find ways to build a pipeline within their ranks, to develop promising talent as future leaders.

There is also great value in partnering seasoned directors with young professionals, as younger incumbents have their fingers on the pulse when it comes to emerging trends, and understand the digital environment far better.

My view, after conducting numerous interviews with the chairs of various boards, is not that there is overt resistance to improving board diversity. Rather it’s a timing issue, it’s about managing the risk, and about responding to the shareholders’ mandate.

Most boards also see the value of diversity, but don’t want to institute it as a tick-box or policy exercise. It must be an intentional action from all parties involved to derive the greatest value for the organisation, its board and stakeholders, and the incumbent board members themselves.