Getting more women on UAE business boards has never been easier, and the figures after a new rule went into effect to increase their presence proves it.
Since the country announced on March 15 that listed companies must have at least one female board member, only four of the 23 people who have joined these positions in companies on the two major UAE stock exchanges are being women, according to data collected by Bloomberg. This barely moves the needle in a country where approximately 96% of these positions are held by men.
For Fatma Hussain, the only woman on the board of the Dubai-based logistics group Aramex PJSC, the slow progress is proof of a cultural mindset that keeps women away from these roles. Women, especially of conservative descent, shun publications that may require staying away from home or interacting with male colleagues, said the UAE national, who is also the head of human capital for the TECOM group, a unit of the Dubai Holding Sovereign Investment Vehicle.
“I do an interview with a lot of people and sometimes a candidate has to ask their parents for permission to take on an offer because there are a lot of men,” said Hussain, who joined Aramex’s board of directors after the message was advertised in a local newspaper.
The social context poses an upward battle for gender equality, even when Emirati women account for 70% of all university graduates. Although women make up about two-thirds of public sector workers, only 30% hold leadership positions, according to data from the UAE’s Gender Balance Council. A report by JPMorgan Chase & Co. last year did not show “clean data” on female employment in the UAE, but estimated that its participation in the workforce is bad even when compared to neighbors such as Saudi Arabia, Kuwait and Qatar .
This is the backdrop for the UAE board’s impetus, with threats of sanctions for companies failing to comply. An unprecedented move for the Middle East comes when the oil-rich Gulf region, which relies on crude oil to bring its trillion-dollar economy, seeks to diversify the talent funds it obtains as it decreases global dependence on hydrocarbons. The World Bank estimates that the female participation rate in the North Africa and Middle East region is the lowest in the world.
The UAE wants to show that they are serious about their new rule. The Securities and Commodities Authority told Bloomberg in a written response to questions that sanctions for companies that fail to comply can range from warnings to fines or even a referral to the public prosecution. Companies will be asked to disclose board representation in annual reports, an SCA spokesman said.
Since the standard was announced, Dubai’s leading developer, Emaar Properties PJSC, telecom provider Du, Abu Dhabi National Oil Distribution Company, a unit of oil giant Adnoc and Dana Gas, have appointed women to his councils.
Gender quotas have been successful in other parts of the world. In France, for example, women occupy at least 40% of the boards of directors of large companies, a direct consequence of a law passed in 2011 which imposed a gradual quota to increase the participation of women by 20%. in 2014 to 40% in 2017. Germany, which has had a bad track record of female corporate leadership, this year introduced a bill that requires at least one woman on the boards of listed companies.
The SCA move was “really necessary,” said Racha Alkhawaja, head of distribution and development for the Dubai-based group at Equitativa Group. “Women have made a big leap in the corporate world in the last decade, but their visibility has not necessarily been brought up to date and therefore not many have yet reached the board level.”
The mindset that places women in the primary caregiver box “needs to change,” she said. “Until that happens, equality will not be achieved. Changing mindsets takes generations. ”
Cultural barriers are a lower limitation than they used to be, said Mohamad Hamade, CEO of Amanat Holdings PJSC, who appointed two women to its board even before the new rule.
“I have witnessed the evolution of the last ten years and it has become significantly more diverse,” he said. “I don’t think it’s a challenge to identify qualified women. There are many great achievers who have achieved a lot, whether locally or regionally or even internationally, and can add a lot of value to listed companies.
The pressure also comes from investors, who drive companies on environmental, social and governance or ESG issues. Companies are moving forward, with First Abu Dhabi Bank PJSC, the largest bank in the Gulf country, which appointed Hana Al Rostamani as the group’s chief executive this year, for example.
Still, “the reality is that we’re starting at a pretty low base,” said Diana Wilde, co-founder of Aurora50, a UAE-based social enterprise focused on creating gender-balanced boardrooms. Compared to the United States, where there is at least one woman on all S&P 500 boards, or the United Kingdom, where more than 34% of FTSE 350 board positions are held by women, “it’s pretty low.” he said.