Parmi Natesan, CEO of the Institute of Directors South Africa, on gender diversification at board level


Q: What does genuine gender equity mean for you, and how does this compare to the current reality of female business leaders in SA?
Genuine gender equity for me means business promoting and advancing the equality of women in the workplace and in leadership positions – not just to tick boxes, but because there is acceptance and belief that it’s the right thing to do, and that business will benefit from it. It also means embracing women for the unique value that only they can add, and not expecting them to conform to the historical ‘masculine’ way of doing business.

This is the very reason why we need diverse groups – not for them all to conform to one common way of thinking, but to bring their own unique perspectives.

Q: What governance mechanisms and legislation does SA have in place to promote women in business, and how successful have these been so far?
In terms of legislation, the B-BBEE Act and the Employment Equity Act both have requirements when it comes to promoting women in business and leadership positions. However, these acts have been in place for a very long time but don’t seem to have had the desired impact. My experience is that they are applied in form over substance, with organisations finding loopholes to increase their compliance – through, for example, clever BEE share schemes – while not truly diversifying their top leadership tier.

In terms of regulation, the JSE has a requirement for all listed companies to have a policy on the promotion of gender diversity at board level, as well as to disclose how they are performing against this policy.

In terms of governance codes, King IV similarly requires that ‘the governing body should set targets for race and gender representation in its membership’.

Q: What is your position on gender quotas and targets in SA, specifically for JSE-listed companies?
I’m not certain that quotas are effective, as they too sometimes result in form over substance. We need general buy-in from decision makers on the importance and benefits of, and the need for gender diversity on boards – this is the only way to achieve real change.

Target setting is a step in the right direction. The JSE listing requirements already set gender targets, and so does King IV. However, I’m also not sure that the required reporting on progress against the targets is being applied as intended.

Reporting often seems boilerplate to tick a box. Ideally, we want a situation where there is full transparency and companies are held accountable for not making progress or not meeting the targets that they have put in place. A report titled the Status of Gender on JSE-listed Boards 2020 shows that while the number of companies that have set gender targets has grown to 104 from 81, twice as many companies did not set targets at all, and of the 104 that did set targets, only 62 actually achieved them.

Q: Women are often treated as a homogenous demographic, but lately there’s been a focus on gender and intersectionality. Why is this approach of value when advancing women in leadership?
So yes, not all women act and think alike, yet they tend to be associated with common characteristics. Our complex and diverse backgrounds affect who we are. Things such as race, culture, religion, upbringing, educational background, socio-economic status, age, sexual orientation, among others, contribute to who we are. That’s why diversity is not as simple or linear in its application. Particularly on boards, we have also seen how valuable diversity of thought, diversity of qualification/profession and diversity of industry experience is.

Q: What do you consider the greatest benefits for companies with gender diversity on their boards, and how does this impact on ‘groupthink’?
The business case for diversity has now conclusively been made in a number of studies. Diverse teams make better decisions and, with that, better investment decisions. Perhaps even more compelling, as reported by the Boston Consulting Group Henderson Institute, companies with above-average diversity scores report an average of 45% of revenue coming from innovation, as opposed to 26% at companies with below-average diversity scores.

The link between diversity and revenue derived from innovation is particularly compelling in the current business environment. COVID has clearly established a link between innovation and the ability to survive (and even prosper) during periods of extreme disruption.

The business case for boardroom diversity is extensive. In today’s increasingly competitive multinational and multicultural markets, organisations exist in a complex context with a wide range of stakeholders, and face competition from new quarters. Clearly, if a board is composed of the same type of people, with no diversity of thought, then chances are that it will find itself constantly on the back foot – unable to think its way into the minds of its various stakeholders, its staff and, importantly, its competitors.

Diverse groups are better able to solve complex problems. Members of diverse groups challenge one another more readily and examine more aspects of a problem, thus avoiding group thinking; they also tend to be more diligent around people they view as ‘different’. Some strongly believe the dialogue around the boardroom table is much more vivid, not because women are better than men, but because they just go about business and leadership differently.

Q: COVID has forced many women to downscale their careers or leave the workforce. What can companies do to better support female talent?
It is one thing to appoint females into leadership positions but, once there, the environment needs to be conducive for them to survive and thrive. Traditional (often patriarchal) policies need to change.

During the COVID lockdowns and working from home, women bore the brunt of juggling work with child-minding and overseeing online schooling as well as housework. The model is not sustainable, so as much as we say corporates must do more, there is also more needed in society in general to make things conducive for women to contribute optimally.

Q: What does the term ‘corporate gender intelligence’ mean for companies in SA?
For me, corporate gender intelligence is about the culture or DNA of an organisation embracing the need for and benefits of gender mainstreaming. It is a deep commitment to equity throughout an organisation and goes a lot further than simply setting gender targets.

So while gender diversity can be seen as adding more of the less-represented gender, gender intelligence is more about enabling different genders to work better together to improve productivity, innovation, decision making and growth. Without gender intelligence, gender diversity can be reduced to a mere tick-box exercise without the desired substance or impact.

Q: In terms of SA’s talent pool, are there enough suitably qualified female candidates for leadership and board positions?
Yes, I believe there are. Within the IoDSA membership itself, of our approximately 9 000 members, about 40% are female. Of our approximately 500 designated members (those holding either the chartered director or certified director designation), about 40% are female. So I don’t think the problem is that the talent does not exist. I think the problem lies in how the talent is sought; in other words, how board vacancies are filled. Those looking to fill board vacancies should be going out of their usual circles to find suitable candidates.

Q: How does the IoDSA support female professionals wanting to equip themselves for board positions?
We partner with other organisations, such as the 30% Club for example, where I serve on the steering committee. The objective thereof is to promote and achieve at least 30% of women on boards. We collaborate with the 30% Club on gender research and I’m a judge in their Gender Mainstreaming Awards. We have also made a concerted effort to market our membership and certifications to females through various campaigns. This has resulted in a steady growth in female representation in our database over time.

I personally conduct a lot of thought leadership and guest speaking to encourage, advise and motivate other women to equip themselves and actively seek board positions. The King Report – which the IoDSA owns the copyright to – also recommends gender (among other) diversity on boards.

Q: What role can investors and shareholder activists play in corporates appointing more women in leadership and to boards?
Shareholders (and in particular institutional shareholders who hold large voting rights) play a massive role, specifically with regard to gender diversity on boards. Convincing directors that we need more women on boards is only half the battle won, as ultimately, it’s the shareholders who appoint directors.

Our big institutional shareholders can thus have a major influence in two ways, namely driving the direction with regard to the diversity they would like to see on the boards of the companies in which they invest; and voting against resolutions that put forward candidates that do not add to the diversity of the boards.

My view is that the resolution to vote for directors at AGMs is one of the most important resolutions, yet it seems to be often neglected by just being passed without much discussion, questions or debate. We need to see more active engagement and voting on this resolution, instead of what seems like rubber-stamping the candidates that the board has put forward for voting.

By Silke Colquhoun