Over the last decade, more countries have taken steps to increase the number of women on boards of directors while also providing a support system for such positions. However, with businesses in the GCC facing pressing challenges, including oil prices, inflation, and other factors, the issue of gender balance at the corporate board level is not a priority in the present climate.
Overall, there is a low percentage of women on corporate boards in the GCC countries, and this is due to the main cultural and religious aspects. The perspective of having women on corporate boards and their role is limited to certain positions within the corporation but not on boards. However, there have been initiatives for encouraging women on corporate boards. On the other hand, women in executive positions and on boards have increased tremendously worldwide.
“It’s more about having a diverse board than having women on boards. A diversified board provides for varied perspectives and viewpoints,” explains Dr. Christiane Schloderer, CFO and Board member NEXSYS-ONE and INSEAD International Director Program Ambassador UAE, who who contributed to a session on Female Board Directorship at the recently held TOP CEO Conference in Dubai.
“In today’s environment, boards that lack women representation suffer reputational and possibly regulatory issues.” So, the question for corporations should not be “should we have a woman,” but rather “how can we ensure that we promote and reach the most qualified women for a diverse board composition?” she continued.
Schloderer went on to say, “First of all, companies should specifically ask for women candidates to enter the search process. Here, remuneration and placement committees, headhunters, and chairperson play an important role. In addition, once a woman has joined the team, she should be encouraged to contribute so that she may demonstrate her value creation potential.”
Moreover, directors, led by the chairman, should ensure that informal networking among board members allows for women’s participation.
GCC countries are still falling behind, with no clear vision for increasing women’s involvement in corporate governance and presence on boards. Initiatives are required to follow the global trend of closing the gender gap in the region.
“Women in the GCC must have the chance to have sponsors who help them along the career path and, at times, push them into career-advancing chances, while ensuring that they feel comfortable with the added responsibilities. They must also be at ease with the increased pressures and politics”, according to Schloderer.
“I believe that many women in the GCC continue to struggle with family expectations.” Long hours, business travel, evening meetings, customer dinners, and other responsibilities are all part of the work. Women’s careers, on the other hand, are gaining acceptance as more role models emerge. At the time, I worked as a CFO in Saudi (company called Nokia Al Saudia), being the only women in the company back then. Now that the company has a big number of female employees, some of them will almost probably be elevated to positions of leadership,” she added.
The Non-Executive Director Roadmap
The Non-Executive Director Roadmap (NED) was another interactive networking event powered by INSEAD throughout the conference. This session addressed the role of women on corporate boards where policy choices are made.
According to Schloderer, INSEAD wants to create awareness about the role of INSEAD’s International Director Network, the path towards becoming a NED, and the current challenges in GCC board rooms NEDs must be prepared to face.
A non-executive director has financial, strategic, and advising responsibilities. The NED role varies substantially depending on the environment of the board. Formal boards have a financial duty to manage the business and mitigate risk. Other boards are more strategic and forward-thinking, while others play a larger advisory function to management.
An independent NED is unconnected to a shareholder and employs his or her own judgment and experience to guide the company, whereas a dependent NED represents a shareholder’s interests.
“The value a NED can contribute depends on the board’s overall role.” The range is broad, ranging from oversight and risk prevention to strategic direction and management coaching. A NED may also “bridge the gap between shareholder interests and corporate needs,” Schloderer stated.
A director must have a “nose deep in but hands out.” This means there is a lot of oversight and strategic planning but no operational action. This is frequently a challenge for ex- or current executives who get their first mandate. They are used to managing; however, as a NED, they must guide,” she continued.
NEDs are often business-experienced individuals with a broad generalist background. However, a new trend of NEDs is emerging with younger professionals that have a highly particular issue background that is ideally linked with the company’s strategy. For example, this could be tied to digital, sustainability, a specific growth goal, or regional knowledge.
Aside from formal qualifications, a NED should be able to drive an agenda, encourage management, and create good connections within the board, particularly with the chair and shareholders.