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By: Delia Ndlovu, Chair, Deloitte Africa
Many studies have established the business case for diversity and inclusion. The recently published eighth edition of the Deloitte Global Boardroom Programme’s Women in the boardroom: a global perspective is a report which analysed more than 18,000 companies in 50 countries and geographies. More than 206,506 directorships – spanning Asia Pacific, the Americas, and EMEA exploring the representation of women in the boardroom and insights into the political, social, and legislative trends behind these numbers.
According to this Deloitte report, organisations that are more diverse as a whole with respect to gender – from top executives and board members to managers and employees – tend to outperform those that are less gender-diverse. Despite this compelling fact, women are underrepresented globally and locally on company boards. This Deloitte report finds that women hold less than one-quarter of the world’s board seats (23.3% in 2023).
Deloitte reports that the mandatory quota legislation in various countries has yielded results. This is evident despite fears that quotas may lead to the same circle of women being asked to serve on a large number of different boards. Five out of the six countries with the highest percentage of women serving on boards in the Deloitte study have some mandatory quota legislation, ranging from approximately 33% (Belgium and the Netherlands) to 40% (France, Norway, and Italy). In the UK, through continued government initiatives and the use of targets, women now hold over 40% of FTSE 100 board seats. There have been similar efforts in Australia, through voluntary targets and disclosures. Women’s representation on Australian boards has more than doubled since 2014 (15% to 34%). However, government action alone is not sufficient to reach parity.
From an Africa perspective the steady increase in women representation on boards is encouraging but much work is required to achieve parity. According to the Deloitte study South Africa has shown improvement with women’s representation on boards in 2023 at 34.9%, from 26.4% in 2021 (It was 31.8% in 2022). Nigeria had 28.9% women representation at board level in 2023 an improvement from 21.7% in 2021. What is patently clear from the study is that without greater focus and action, gender parity in the boardroom is unlikely to be achieved before 2038.
For parity to become a reality, a wide range of stakeholders would need to devote greater focus and action to help corporate boards more accurately reflect the societies in which they operate. The boards themselves should continue to take action and ask the right questions.
Clearly, government-driven quotas have yielded global results in advancing parity at the board level. However, more than government action is likely required to reach the 2038 goal. Stakeholders, including investors, should remain vigilant in setting expectations around gender diversity despite the number of matters competing for investor attention. Efforts like the 30% club, which has deep private sector involvement, have also helped. However, more than a quota of 30% is needed to set the bar high.
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The way forward
Boards are critical change agents. Today, board agendas are more packed than ever – the challenges and emerging areas boards must keep abreast of are only increasing. As organisations aim to build more equitable and balanced boardrooms and C-suites with real diversity of thought, directors must remain focused on gender parity to advance progress. Key advice for boards from the Deloitte report as it probes whether and to what extent, the company and management are doing enough to drive change includes:
- Don’t default to historic experience profiles when selecting board members. Questions that Boards should ask include: Do we have the right mix of experiences, skills, and backgrounds to position ourselves to succeed in light of the complexities of today? To what extent do we, as a board, play it safe when selecting our board or C-suite candidates? Do we default to narrow searches of candidates with a historical record of prior CEO experience, or are we willing to take risks to find leaders of the future? How much emphasis do we place on previous executive or board roles compared to skill sets, capabilities, leadership, and business acumen, which may inadvertently exclude a range of high-quality women candidates?
Where boards are prepared to take a risk and allocate a board seat to high-potential, talented female future leaders and entrepreneurs with business credibility, relevant technical expertise and emotional intelligence, they reap the benefit of innovative, fresh thinking. This challenges the status quo and groupthink. Boards benefit from the input of these future leaders if the chairs are inclusive and create a psychologically safe space where the voice of everyone can be respected and heard. Female leaders and entrepreneurs with aspirations to serve on boards also need to be committed to continuous learning in order to keep themselves informed about new developments in their areas of expertise and governance in general.
- Get creative in building governance experience. What creative solutions can management and the board deploy to provide more opportunities for women to gain governance experience? Have we considered placing high-potential candidates on boards of our subsidiaries or other entities to fuel not only our own board and C-suite pipelines, but also corporate pipelines more broadly?
Deloitte Africa has established a Governance Academy intending to provide board readiness to future leaders and entrepreneurs who aspire to serve on Boards or report to Boards. The Academy upskills these future leaders on the role of the Board and the duties of a Director. Modules include the duties of a director, ethics, the role of the board as a strategic differentiator and technical topics, including sustainability, risk management, crisis management, cybercrime, Generative AI and executive pay. Participants of our Governance Academy are assigned a mentor who will partner with them on their journey to becoming a Non-Executive Director. The mentors become the thinking partners of the participants and reflect together on the technical topics being taught. They are also assisted in developing world-class CVs that position them for future Board positions, leveraging the experience gained at the Academy. The participants then work with a specialised head-hunter who places them, in most instances, on boards of subsidiaries of companies and NGOs, where they can gain experience.
- Regularly interrogate your pipeline data and progress. Are we spending enough time challenging our data and outcomes? How fast are women being added to our C-suites? Are our pipelines advancing women at the same rates as men? Are we losing women leaders at critical junctures in the pipeline?
The rigorous analysis of the data safeguards against women with leadership potential arriving and not thriving. With this kind of robust analysis, boards can hold themselves accountable for creating an inclusive environment where everyone can thrive. Additionally, boards should consider carefully tracking their industries for how many women-owned businesses are in their supply chain to continue the virtuous cycle of empowering women. This brings women’s empowerment in general to the forefront of the business agenda and uproots systemic biases.
These areas are only a start; boards cannot go at it alone. Business leaders in all markets will need to commit to collaborating and having the courage to ask difficult questions. Through this, doing their part to help accelerate the timeline for achieving gender parity in the world’s boardrooms and C-suites.
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