Despite research confirming the positive correlation between the presence of women in corporate leadership and company performance, women remain grossly underrepresented at the executive level of corporate South Africa. Thirty-one percent of South African companies don’t have any female representation in senior leadership roles, while female directorships fell from 21% in 2015 to 19% (85% non-executive) in 2017.
Elize Botha, the managing director of Old Mutual Unit Trusts, says the lack of women in leadership is hampering economic performance.
“By increasing the number of women in senior leadership roles in the private sector, especially in JSE-listed companies, the potential exists to drive better performance for South African investors in the local equity market, which will, in turn, drive positive growth for the South African economy as a whole,” Botha says.
Studies show substantial evidence that gender diversity at senior management level enhances company performance. Referring to a 2016 report by the Peterson Institute for International Economics, “Is gender diversity profitable?”, Botha says that companies with at least 30% women in C-suite positions – a term denoting the highest-level executives in senior management – demonstrated a 15% increase in profitability, compared with companies with no gender diversity.
“The suggestion is not that women should lead alone, but increased representation would ensure more diverse views, which is a proven performance enhancer.
“South Africa has prioritised cultural diversity, which is a welcome move; gender diversity is as important in the workplace, as it exposes men and women to each other’s unique and complementary perspectives, which is a proven recipe for success,” Botha says.
“Diversity in an executive team is an indicator of good management, because diversity drives innovation and creativity in all aspects and types of businesses. In a time of rapid technological innovation and social change, it makes sense that a lack of diversity of opinions and perspectives will not deliver the best possible business results.”
The lack of gender transformation has implications far broader than just the companies themselves, but extends to their shareholders and investors, Botha says.
“Diminished performance of listed companies as a result of the lack of transformation, therefore, has consequences for ordinary South Africans who look to local growth assets to drive the performance they need in order to reach their long-term investment goals and ensure a comfortable retirement.”
However, Botha warns boards and C-suite management against chasing gender targets without a meaningful desire to effect long-term transformation and to create companies that foster female talent.
“It needs to be about more than just having a few strategically placed women at the very top. Rather, corporate South Africa needs to create a strong pipeline of women managers before investors will begin to reap the financial benefits of greater gender diversity.”
Botha believes that South African investors have an opportunity to direct greater capital to businesses that make a positive impact concerning gender diversity. “Investors need to take a greater interest in the gender transformation displayed by the companies they choose to invest in, to ultimately drive other companies to follow suit,” she says.
The issue of gender disparity, however, runs far deeper than this, and Botha acknowledges that there needs to be a societal shift to bridge the gender gap in South Africa effectively.
“There is no quick-fix to remedy gender inequality in the workplace. We, as a society, need to work towards challenging gender bias daily to drive better growth,” she says.