A Tale of Two Genders: Bringing Boardroom Diversity to Life
TheBoardroom Africa’s (TBR Africa) task is no easy one. Accelerating the presence of women in boardroom’s across Africa will require strategic vision that embraces corporate gender challenges, and cultural complexities. But there is no time like the present, a time when gender initiatives have gained prominence, propelled by new research findings that show a correlation between diversity and business growth, and when global leaders are increasingly realizing the impact of inclusive decision-making and the role this plays in improving domestic output and gross economic performance.
According to the United Nations, the unequal treatment of women in the labour markets alone cost sub-Saharan Africa approximately $105bn (or 6 per cent of gross domestic product) in 2014. Yet the same data points to a tendency of business leaders to underestimate the benefits of gender diversity as a catalyst for growth and in rolling back these losses. McKinsey estimates that earnings before interest and taxes (EBIT) margins of companies with at least a quarter share of women on their boards was 20 percent higher than the industry average — this lies on the backdrop of a continent where only 14 per cent of Boards, and 5 per cent of CEO’s are women.
In Sub-Saharan Africa, we can expect to wait approximately 60 years for economic gender parity, and if measures are not put in place today, the 60-year target will likely not be reached. But the truth is, businesses and as a result economies, are losing out today. And as a developing continent with multiple economic challenges, we simply cannot afford to lose on average 6 per cent GDP or more annually as a result of workplace gender inequality alone.
Why TBR Africa?
TBR Africa was borne out of this reality, with a specific mandate to accelerating change at the Board level. Our goal is to improve business performance through the acceleration of appointment of women to Boards, enabled by our leading and extensive database of senior executive women who are connected with Development Finance Institutions, Private Equity Funds, and other prominent institutions’ for vacant Board opportunities. Our approach is a data-driven technological model. At the heart of this model lies a talent identification method; endorsements. Detailed mapping into Board nomination processes in Africa have revealed the almost ubiquitous use of ‘trust networks’ to identify independent board directors. This peer-to-peer process drives accountability, but more importantly, companies trust their endorsers’ ability to recommend the right candidates in both skills and cultural fit. But these trust networks are also ‘closed’ and exacerbate the diversity challenge — Board members are often nominated based on similarities and shared networks of existing Board members, the result is a non-diverse pipeline of candidates who are consistently called on for opportunities. We have recognized ‘endorsements’ as a critical piece during the board nomination process, but have formalized the status of ‘endorsers,’ such that their nominees are exposed to wider networks, and have made ‘endorsements’ a key pre-requisite for candidate identification.
Role of Male ‘Endorsers’ in Getting Women a Seat
What better way to get men involved in driving diversity than through endorsements? There’s a clear demand to find a “place” and or “voice” for male support. Various examples exist globally where men are being effectively engaged — UN Women’s #HeForShe initiative engages men and boys as agents of change by encouraging them to take action against negative inequalities faced by women and girls. In the corporate world, gender strategists like Jeffery Halter are creating impact in similar ways, as founder of YWomen, Halter is leading the charge through strategic consulting and focuses on engaging men in women’s leadership issues. Halter recently stated that “it’s about time we stopped asking women to lean in, and started asking men to stand up.” An emphatic statement which was obviously in reference to Sheryl Sandberg’s daring title of her critically acclaimed memoir slash advice to women “Lean In”. Far from Halter being critical of Sandberg’s ‘lean In’, he was on the other hand, keen to emphasize the imbalance in leadership which undermined a woman’s ability to break through barriers simply by “leaning in.” His justification was simple, “if men are 85 per cent of senior leadership, (they) are 85 per cent of the problem.” It was a clarion call to male leaders about the power they hold in helping to advance women’s leadership agenda. His approach is simple yet effective, and at the core of his work is the utilization of business principles to change the way diversity is framed in the corporate setting.
TBR Africa brings onboard these key learnings and has built on existing frameworks in creating an enabling space for male engagement to drive diversity in leadership. Endorsements are one avenue. There are many more.
Developing the Pipeline
A critical element is often missing when addressing the promotion of women to leadership, especially to the Boardroom. It is well documented that women with no Board experience are less likely to be selected for boards than men in similar circumstances. “When a woman fills a board seat, there’s a 32 per cent chance she’s already served as a director at another company,” one study found, on the other hand, “When a man does, there’s a 23 per cent chance he’s already held a seat” (Bloomberg), the vicious cycle of needing to have Board experience to get chosen to sit on a Board, the ‘catch-22’. This is further challenged by a culture that tends to expect more of women leaders than their male counterparts. The effect being women are more likely than men to feel ill equipped to take on directorships, and when appointed, struggle to navigate Boards that are heavily dominated by men. TBR Africa conducted a series of interviews with Senior Executives and Board members, to identify areas for increasing the outcome of first time women Board members. We identified that companies that wished to escape the ‘catch-22’ have often opted for Director Certification training as a pre-requisite for further consideration. It is with this understanding that we’ve partnered with a globally accredited provider to deliver our Certified Board Training program ‘Open Doors,’ for women with no or little Board experience, and our Sustain! initiative which is designed to support existing women directors, as a solution ensuring a constant pipeline of women are ready and qualified to sit on Boards.
So Why A Focus on DFIs and PE Firms?
The magic word is ‘scale.’ Any attempt at accelerating an outcome must consider options for scaling. Simply, Development Finance Institutions (DFIs) and Private Equity Funds (PEFs) provide other companies with access to their capital. CDC Group (the UK’s DFI) for instance, invests in over 600 companies and Funds across the African Region alone, their greater emphasis on inclusion can encourage gender leadership within their portfolio and private equity-sponsored companies. More importantly, these institutions get it! They often back research that demonstrate higher return on investments (ROI) as a result of greater leadership diversity, there’s no better outcome for an investor than better financial performance. But beyond the clear business case that exists, DFIs carry around the mandate of the big ‘D’ (development), the very basis for their developmental focus dictates that they must look beyond simple financial returns, and that through their portfolios, they must demonstrate a commitment to delivering impactful change, be it poverty reduction, inclusive access to finance, or gender equality. The big ‘D’, enables them to back and partner with initiatives like TBR Africa who offer a solution to delivering leadership diversity. We see our investor relationships as partnerships. Our partners commit to creating an enabling space for more diverse representation on their boards or portfolio companies, and we in turn commit to supporting their gender equality initiatives, enabled by our extensive database of peer-endorsed candidates.
Please visit us at the following to discover more: https://www.theboardroomafrica.com/
By: Marcia Ashong, Founder & Executive Director at TheBoardroom Africa