A Long Road Ahead: Key Takeaways from the Board Diversity Index Egypt 2020 Edition
On January 17, TheBoardroom Africa released the Board Diversity Index Egypt 2020 Edition in partnership with the Egypt Women on Boards Observatory at AUC School of Business and The Egyptian Exchange (EGX). The report found that more than half of the listed companies have at least one woman on board as of July 31, 2020, compared to 47 percent in 2019, indicating that EGX listed companies need more effort to increase women's representation their boards of directors.
The index tracks the number of listed companies’ boards by country. It identifies all board seats filled by women while also monitoring the number of women in the chair and other executive positions. Research to date covers publicly listed boards across 11 African countries, including Egypt.
Fully aware of the importance of gender equality and women empowerment, the Egyptian Exchange signed the UN Women Empowerment Principles (UN-WEPs) in 2016, in line with EGX's effective participation in sustainability initiatives and working groups in the capital market since 2012. “Moving on to close the gender gap, all listed companies are now required to put at least one woman on their boards,” stated Mohamed Farid, chairman of the Egyptian Exchange. Today, women make up 3.9 percent of CEOs and Managing Directors, 8.7 percent of COOs, and 2.1 percent of CFOs on Egypt’s listed boards.
“EGX is fully committed and aware of the impact that greater inclusivity could have in building competitive, value-creating companies and therefore resilient and inclusive economies. To that end, we have collaborated with the AUC School of Business Women on Board Observatory to promote stronger board governance for listed companies, build a Board Ready Women database, offering board placement services to listed companies, developing an annual monitoring report for women on boards as well as providing corporate governance awareness and training programs with an embedded gender component to highlight the benefits of board diversity,” said Farid, commenting on the role of stock exchanges in promoting gender diversity.
According to the new report, As of July 2020, among the 242 companies listed on the Egyptian Exchange, women hold only 10.8 percent of board seats. Although this figure represents a 0.7 percent increase in women's board seats from 2019, the Board Diversity Index shows that women are rarely included in Egypt’s most notable companies' governance and management.
Key sectors assessed in the 2020 Board Diversity Index include, but are not limited to, banks, energy, industrial goods, shipping, textiles, travel and leisure, and utilities. Amongst these sectors, the textile and durables sectors have the highest percentage of women board directors, with two out of eight companies having more than 30 percent female directors. However, in terms of the aggregate number of women, the energy and support services sector outperforms all sectors: 23 percent of all the energy sector directors are female.
Partnering up to fuel change
The Women on Boards Observatory was founded in 2017 by a consortium initiated by the AUC School of Business. It is recognized as a specialized observatory within the National Council for Women's framework, Egyptian Women Observatory, and advocates for 30 percent women on boards in Egypt by 2030. Partners of the Women on Boards Observatory represent a unique partnership, bringing together government, business associations, research institutions, international organizations, and non-government organizations.
One of the observatory’s partner organizations is TheBoardroom Africa (TBR Africa), the largest regional network of female executives in Africa. TBR Africa’s goal is to improve access to board opportunities for women and accelerate the presence of women on boards by working with development finance institutions, private equity investors and companies and companies to accelerate the appointment of women on boards and build a growing pipeline of board-ready women while inspiring and educating the business community on the power of diverse leadership.
“TheBoardroom Africa has undertaken a robust analysis of boardroom gender diversity in Egypt and 11 other African states over the past three years by analyzing board composition through public declarations of executives and officers. This year, we’re delighted to count the Women on Boards Observatory and the Egyptian Exchange as partners who understand the strong link between gender diversity and good corporate governance,” said Marcia Ashong, Founder and CEO of TheBoardroom Africa.
A few steps ahead, but even more to go
Over the last decade, Egyptian women have made significant strides in access to rights, education, and the labor market. While Egyptian universities turn out more female than male graduates, those gains have failed to translate to equitable representation in the workforce and the boardroom at the highest leadership level.
Luckily for Egyptian companies, EGX is a pioneering exchange in sustainability and Environmental, Social, and Corporate Governance (ESG) efforts, believing that the ESG factors play an increasingly important role in creating shareholder value. Leading by example, EGX encourages listed companies to embed the ESG factors into their business activities to build their corporate image and manage ESG related-risks.
So far, only 10.3 percent of EGX listed companies have been ranked as “top performers'' concerning gender diversity, meaning that women hold 30 percent or more of their board seats. According to the index, the top three performers in 2020 include First Investment Company and Real Estate Development, Marine and Oil Services (SAE), and El Orouba Securities Brokerage, each of which has a board that is 60 percent women, a record-breaking number for sure.
“Good corporate governance helps firms improve performance, drive growth and manage risk. To be truly effective, a board requires a diversity of skills and perspectives. The Board Diversity Index shows that many EGX listed companies are true gender diversity champions, but that there is still much work to be done,” commented Ghada Howaidy, Founder of the Women on Boards Observatory and Associate Dean for Executive Education and External Relations at the AUC School of Business.
"To understand the methodology and get more insights beyond the numbers, access the 2020 Board Diversity Index: Egypt Edition here."