Eyes on the prize: 2023 goals for ‘women on boards’ realized

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Eyes on the prize: 2023 goals for ‘women on boards’ realized

What would a world without women in the workforce be like? Well, certainly one with a lot of lost potential and lack of growth. Having women as workers and employees is crucial for the economic growth of any country, and this is especially true for a major emerging market economy like Egypt’s.

According to the National Council for Women (NCW), the percentage of female graduates of higher education in Egypt currently stands at 36 percent, while women represent about 48 percent in the field of scientific research. Additionally, UN Women says that Egypt has the highest percentage of female university graduates. These university graduates bring a lot of potential into a variety of sectors and the companies they’re hired into, specifically if they manage to reach leadership positions and be on the boards of directors of these companies.

“Going from having no women in corporate leadership (the CEO, the board, and other C-suite positions) to a 30 percent female share is associated with a one-percentage-point increase in net margin — which translates to a 15 percent increase in profitability for a typical firm,” says Heritage Financial.

An IFC report titled “Women on Boards: How Gender-Diverse Boards Bring Value to Egyptian Companies” revealed that having women on boards is likely to enhance organizational and human capital development aspects of companies. It says that having women on board “contributes to a broader perspective. They improve conflict management and communication.” Additionally, respondents to one of the surveys in the aforementioned IFC report perceived female board members “as highly focused on the workplace environment, company culture, and professional development.” The report further reads, “Such an emphasis contributes to increased employee satisfaction, retention, and talent development—all beneficial to building companies’ human capital base.”

Throughout the past few years, and since its founding in 2017, the Women on Boards (WoB) Observatory of the AUC School of Business has kept its eyes on supporting women and bolstering their representation on the boards of directors of companies, helping them assume leadership positions, thus enhancing inclusion and contributing to an overall successful economy.

The 2023 WoB Annual Monitoring report shed light on the key takeaways of the efforts made throughout 2023 and the progress observed in that arena. It analyzes the data of the Egyptian Exchange (EGX) listed companies, the banking sector, the public enterprise companies, and the Financial Regulatory Authority (FRA) non-banking financial sector companies.

Reaping stunning results

Showing an incredible improvement, the 2023 report indicates that the WoB indicator reached 23.3 percent compared to just 19.7 percent in 2022, increasing by a growth rate of 18 percent and achieving 3.7 percent increase in the overall WoB indicator. “All categories sustained an average of 3 percent annual increase,” read the report. Maintaining this annual increase of 3 percent means that the WoB indicator will be able to reach the 20230 goal of 30 percent women on boards by 2026.

“We’re looking at a significant increase since the last report, and also an increase in the number of sectors that are having more women on boards,” said Christine Arab, country representative of the UN women Egypt office, during the launch of the report.

Further reflecting a remarkable increase in the number of women on boards, the report shows that the total number of women on boards of companies and banks in 2023 is 1563 compared to 1320 in 2022, making a growth rate of 18 percent.

For her part, the Minister of Planning and Economic Development, Hala El-Said, expressed her pride in the improvement achieved and her trust in the positive results waiting to be reaped. “This report’s launch marks a major milestone towards societal impact as women are becoming key actors in shaping the future. Empowering all females is an investment we’re making in our future that fosters strong communities by allowing women to be heard, leading to more effective decision making an overall pioneering community,” she said.

When it comes to EGX-listed companies, it’s safe to say that 2023 was the year that WoB reached its highest levels at 21.7 percent compared to 17.3 in 2022, marking 25.4 percent growth rate between 2022 and 2023.

The percentage of EGX-listed companies with zero women on boards decreased to only become 10 companies in 2023, dropping from 10.2 percent in 2022 to a good 4.2 percent in 2023.

In the banking sector, the percentage of zero women on boards decreased rather dramatically by a stunning 67 percent, reaching only one bank in 2023.

Commenting on the notable progress made in the private sector, Maya Morsy, the president of the National Council for Women who’s assumed this position since 2016, said, “Egypt has exerted immense effort for women empowerment in the private sector. Moreover, I believe that by having women on boards, we will see a better financial performance and a more diverse economic landscape, expanding the talent pool and driving economic empowerment through participation.”

The public enterprise sector got its fair share of women’s participation as the percentage of WoB increased from 9.3 percent in 2022 to 12 percent in 2023, marking a growth rate of 29 percent.

Last but not least, the non-banking financial sector (NBFS) saw the highest increase of all sectors. It marked 25.2 percent in 2023, compared to 22 percent in 2022, with a 14.7 percent growth rate.

What to expect next?

The goal for the coming years for WoB is rather clear. As it delved into more specific figures, the report indicated that the total estimated gap to reach the 2023 strategy target by 2023 is 455 women. 161 women in EGX listed companies, 35 women in banks, 70 women in public enterprise companies, and 189 women in non-banking financial sector companies until 2023.

Commenting on the data of the report, Islam Azzam, the Financial Regulatory Authority (FRA) vice chairman, said that FRA has been working hard to contribute to the increases. “FRA had made huge progress increasing the representation of women in the banking sector, and we have a goal of 25 percent of women on board, with 16 percent growth over the year,” he added.

WoB has partnerships with many government bodies, including the Ministries of Planning and the Public Business Sector, as well as the National Council of Women, EGX and CBE.

To learn more about AUC School of Business Women on Boards Observatory watch here

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