Boardroom still a strange place for Kenya women

Studies show that companies with a high proportion of women board members score higher than their peers in financial performance, innovation and business longevity. File  

By Bob Koigi

In Summary

• Only 15 per cent of listed companies, according to the Chartered Institute of Marketing, have crossed the threshold of having 30 per cent women on their boards.
• Currently, only three women are chief executive officers in publicly listed companies: Ada Eze of Total Kenya, Maria Msiska of BOC Kenya Limited and Nasim Devji of Diamond Trust Bank.

The role of women in Kenyan boardrooms is dismally below global standards, standing at less than 15 per cent of board positions, even as women contribute 52 per cent of the country’s economy.

 

This, even as numerous studies show that companies with a high proportion of women board members score higher than their peers in financial performance, innovation and business longevity.

However, Kenyan corporates remain closed to recognizing the importance of having women in the boardroom, at least if numbers are anything to go by. Currently, only three women are chief executive officers in publicly listed companies: Ada Eze of Total Kenya, Maria Msiska of BOC Kenya Limited and Nasim Devji of Diamond Trust Bank.

By 2012, Nelius Kariuki, the current board chairperson of Kenya-Re, was the only woman chair among the 60 companies listed at the NSE.

A survey conducted by Ipsos Synnovate of this year’s top 40 under 40 women found that the majority of the women leaders blamed the lack of transparency about the availability of board positions, the lack of mentorship, and competition with the entrenched boys club as the key factors keeping women out of boardrooms.

Some 56 per cent of the women polled also perceive that Kenya is generally a patriarchal society that predominantly favours men. As a result, they have to work harder to succeed.

The survey is corroborated by earlier research by the Kenya Institute of Management that showed women occupy about 12 per cent of board seats in Nairobi-bourse listed companies, compared to 20 per cent among state-owned firms - despite a provision in the constitution that requires boards and management of all government agencies to have 30 per cent women representation.

Another report by a presidential taskforce on parastatal reforms noted that on average, women make up 27 per cent of the board members in the state run agencies, with a number of them having just one or two women on their boards. O

Only 15 per cent of listed companies, according to the Chartered Institute of Marketing, have crossed the threshold of having 30 per cent women on their boards.

Globally, countries have endeavoured to end the gender inequality in the boardrooms through incentives to companies that recognize women and even quota systems that force companies to incorporate women into their highest echelons of business.

In 2003, Norway mandated a 40 per cent quota for female board participation in both public and private companies. And in Finland legislation was passed that requires companies without women on their boards to disclose the reasons in their annual reports.

But, while government has been active in pushing for women representation in boardrooms across the globe, company shareholders seem reluctant in appreciating the role of women in top executive positions. Ironically, the shareholders should be the first to push for more women based on numerous studies on the effect of having women in top business positions.

Recent research from the Credit Suisse Research Institute found that companies with more women on their boards outperform those with fewer or no female directors. Even a single women director appears to mark out a difference, with Credit Suisse finding that net income growth over the past six years averaged 14 per cent for companies with women directors compared to 10 per cent for those with no female board members.

But, according to a study by catering services firm Sodexo, which compiled wide-ranging research on diversity at work, companies where women make up a third of board members made on average 42 per cent more profit, and shareholders received 53 per cent higher returns than those that headed by male peers.