Bringing the Gender Equality Index to the Middle East: The benefits and the obstacles

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Gender equality has been one of the world’s hottest topics in recent years and even the finance world has been no stranger to it.

In the workplace, much of the debate has revolved around the gender pay gap and women’s representation.

In recent years, more governments and international institutions have been making efforts to increase female labor force participation in the job market.

One of these efforts has been Bloomberg’s Gender Equality Index (GEI), a “modified market capitalization-weighted index that aims to track the performance of public [limited] companies committed to transparency in gender-data reporting,” according to their official website. It was launched six years ago to help companies assess their progress towards gender parity and highlight their commitment to gender equality.

The GEI of each company is measured according to a number of factors including female leadership, equal pay, inclusivity, and anti-sexual harassment policies among others.

The movement towards more equality between women and men in the business world is not only being driven by a commitment to an ideal. While most of the arguments have been from a human rights and equality perspective, there is also a significant business case for greater gender diversity in workplaces and company boards.

Many studies conducted over the years have shown that companies that employ more women perform better financially and have greater transparency than those that are predominantly staffed by men.

Additionally, stakeholders are increasingly demanding more gender diversity in their companies, from employees to regulators and to investors as well. Many investors are looking more into the values and social impacts of the companies they are choosing to invest in.

Bloomberg argues that companies that sign up to disclosing their GEI will be more competitive and attract more capital by showcasing their commitment to gender equality and good practices.

Bloomberg recently held a webinar that invited speakers to discuss the business case for gender equality with a Middle East focus. Among the speakers were Mohamed Farid Saleh, the executive chairman of the Egyptian Exchange (EGX), and Ghada Howaidy, associate dean for executive education at the AUC School of Business and founder of the Egypt Women on Boards Observatory (WoB).

Providing the opening remarks was Patricia Torres, global head of Bloomberg’s sustainable finance solutions, who emphasized that “with regards to gender-related data, we know that a workforce committed to diversity, equity and inclusion is a more productive one.”

“For investors, it represents new data metrics that can be used during security selection when allocating capital across their portfolios,” she continued, adding that more than 100 companies in the Middle East and North Africa (MENA) region are now eligible to participate in the GEI.

Saleh, the EGX executive chairman, revealed that the exchange is working tirelessly on sustainability. Part of its efforts include increasing gender parity and improving workplace conditions for women on EGX-listed companies, which the GEI is a significant part of. He further cited that there have been plenty of studies showing that more gender diverse companies perform better than ones with less gender diversity.

“Good governance attracts good investments,” according to Sherif Kamel, dean of the AUC School of Business. Linking the EGX up with the GEI will provide a good reference for investors to demand more gender diversity in their companies, according to Heba El Serafi, assistant chairman and head of disclosure at EGX.

However, El Serafi added that many Egyptian companies still do not see the benefits of gender equality and urged that more efforts were required to help convince them to get on board. The GEI, she said, provides a good framework for these companies to use as a guide to identify gaps and focus their efforts.

Mona Hosny, sustainability strategy manager at Commercial International Bank (CIB), confirmed El Serafi’s point. “The GEI helped in providing areas of improvement [at CIB].”

There have been many positive efforts and tangible progress in Egypt and other MENA countries to address the gender gap. One key gain has been more local data collection efforts such as the WoB. The GEI only represents further progress in this regard.

However, cultural obstacles to further progress still exist, according to Raeda Al Sarayreh. Al Sarayreh is the chair of the steering committee of the MENA chapter of the 30% Club, a UK-based initiative that pushes for women to represent 30 percent of big company boards around the world.

She said that cultural perceptions of gender in the Middle East remain a bottle neck for women achieving greater parity with their male peers in the business world, and there needs to a concerted effort to shift these attitudes.

In order to effectively move forward, WoB’s founder, Ghada Howaidy, said that the first step should for organizations to do some soul searching. They need to form strategies that make sense to their stakeholders and identify the purpose behind why they should improve their gender indicators. Doing so helps to put the organization on a focused and well managed trajectory.

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