USB report calls for 30% increase in JSE women
The report said women currently occupied only 20percent of directors while South Africa had no legislation specifically requiring companies to include women on their boards of directors.
The report, Women on South African boards: facts, fiction and forward thinking - released ahead of Women’s Day this Sunday - recommended voluntary targets, improved monitoring and reporting, enforcement and consequences for non-compliance, establishing shadow boards to grow the next generation of female directors and lobbying.
It said indirect measures - such as the JSE listing requirements - were limited in scope, relevance, impact and enforceability, the report sponsored by WDB Investment Holdings found.
The report’s author, Professor Anita Bosch, said: “For instance, there have been no consequences for JSE-listed companies that have not complied with listing requirements related to the advancement of gender diversity at board level.”
According to the Businesswomen’s Association of South Africa (Bwasa) Women in Leadership Census, from 2012 to 2017, only 26 companies consistently had a 25percent-plus female board while 45 out of the 277 surveyed had no female directors at all.
Bwasa also found that of the nearly 600 female board members of the companies in 2017, more than 80percent were non-executive directors.
Bosch said South Africa could only do voluntary targets since quotas were regarded as unconstitutional.
“Voluntary targets, however, can be just as effective as quota systems,” she said.
“The trick lies in the enforcement of voluntary targets and penalties, even if only through social pressure, which could be associated with non-compliance to own targets.”
Bosch said the pool of talented women suitable for boards was steadily increasing and gains had been made, but they were too erratic and too small to correct the gender imbalance.
She said addressing the gender imbalance would take strategic and concerted efforts by companies, directors, shareholder activists and institutional investors.
Bosch also called for the Companies and Intellectual Property Commission (CIPC) to collate data for non-listed companies and make it public in line with the CIPCs mandate as a regulatory body.
She said it was difficult to analyse and measure progress without good quality data and currently researchers often needed to compile their own diversity datasets by going through each company’s annual report and manually capturing the data. Furthermore, stock exchanges should collate and share data on the gender, age and race of company directors.
“Companies that are regarded as designated private bodies should be compelled to report the gender and race of board nominees, committee members, and committee chairs.”
A report by PricewaterhouseCoopers last year showed that only 3.31percent of chief executives of JSE-listed companies were women in the year to April 2019.
It also found the pay disparities between men and women chief executives was problematic, citing the largest pay gaps were in the healthcare sector, (28.1percent), followed by consumer discretionary (25.1percent), technology (22.9percent) and financials (21.8percent).
“The overall view of this JSE analysis paints a stark picture of the inequality in representation in the companies listed on it,” the report said.