Corporate boards throughout the world are still dominated by men, and Pakistan is no exception. In October 2019, Deloitte Global published the sixth edition of its report, Women in the Boardroom: A Global Perspective, which revealed that women held just 16.9% of board seats globally.
In Pakistan, as in other countries, there is a host of reasons why women continue to be underrepresented on boards. These include cultural and societal obstacles, unconscious bias, lack of access to mentoring and networking opportunities that would help them progress, and an overall shortage of women in the talent pipeline. The lack of board representation persists despite a body of research showing that companies perform better when they have at least one woman on their board.
Behind the headlines
To address the issue, Pakistan introduced a requirement in 2017 – through its Companies Act and corporate governance code – for all listed companies to have at least one female director on their boards. At first sight, the new requirement seems to have had the positive impact intended. Research by the Securities and Exchange Commission of Pakistan (SECP) found a marked increase in the number of independent female directors between 2017 and 2019, from 8.8% to just under 12%.
Yet the headline statistics don’t tell the whole story. SECP commissioner Sadia Khan says: ‘The survey results reveal that while there is a meaningful increase in the number of companies with at least one female director, the number of companies with more than one remains static.’
‘While there is a meaningful increase in the number of companies in Pakistan with at least one female director, the number of companies with more than one remains static’
In the absence of focused group discussions or more detailed analysis on the subject, she says it is too early to draw conclusions, but adds that anecdotal evidence points to a ‘general appreciation of the contributions of female directors’ once they have been inducted into boards.
In demand
Certainly, female directors in Pakistan are seeing heightened demand for their expertise. ‘Ever since the change was brought into the Companies Act, it has had a positive impact,’ says Jahanara Sajjad Ahmad, executive director for corporate governance and group financial adviser at Pakistani conglomerate Bibojee Group. ‘Many companies started calling me up and asking me to be a board member.’
Ahmad now sits on the boards of a brewery and a cement company. She believes that while some companies are treating the appointment of female directors as a compliance exercise, others genuinely desire a greater diversity of skills at board level. ‘The chief executive of Murree Brewery wanted me to join the board because of my experience in the field of corporate governance,’ she explains.
The participation of women in governance roles in Pakistan has been growing gradually, although the pool of women working as independent directors, typically across several different boards, remains small.
Yet this shortage is not necessarily a gender-specific issue, according to ACCA Council member Ayla Majid FCCA, founder of sustainability platform Planetive and managing director of Islamabad-based accountancy firm Khalid Majid Rehman. ‘I see this in the case not only of competent women but competent men as well,’ she says. ‘The pool available and willing to sit on boards as independent directors is small.’
Path to progress
While progress is being made on board gender diversity in Pakistan, albeit slowly, SECP’s research also highlights a ‘worrying downward trend’ in the number of senior women occupying C-suite positions in companies, which has implications for board talent pipelines. So what can be done to speed up the process of getting more women into senior leadership roles and onto boards?
Majid says it’s important to share the story about board gender diversity and raise awareness of board positions as an option for professional women. ‘We need to create awareness, write about it and have conversations about it,’ she says. ‘And we need to make training more accessible and build capacity.’
She also points out that women in Pakistan are underrepresented generally in the formal workforce compared with their male counterparts. ‘When we increase the base number – with more girls going to school, more girls entering professional education, and more girls going to work – that growth will lead to more women coming into the C suite.’ Majid also believes that, while virtual working has helped, a better transportation ecosystem is key to making the workplace more accessible to women.
The stereotype struggle
Irfan Wahab Khan, CEO of telecoms company Telenor Pakistan, suggests that social and cultural attitudes remain the main obstacle to getting more women onto boards. ‘We continuously need to challenge some of the prevailing stereotypes that surround women in business,’ he says. ‘To improve the pipeline of qualified and experienced female talent, we also need to work harder to ensure female talent succession and equal access to development opportunities.’
Khan thinks that an inclusive work culture starts at the top, and that boards should have a well-articulated diversity policy. He recommends that boards should keep track of key metrics showing recruitment, retention and promotion, along with gender pay gap analysis. He also believes that companies can help to nurture female talent in the workplace by setting up day care centres, improving maternity leave, and establishing robust anti-harassment policies and speak-up protection.
Ultimately, Pakistan will succeed in improving board gender diversity and closing its gap with other countries only if it addresses the broader issue of gender equality, says the SECP’s Khan. ‘Greater board diversity, in isolation, will not pay as much dividend as having it in a culture that nurtures equity, values diversity and provides an environment for women to be not just inducted, but also heard.’
For more information
Find additional materials from ACCA on the theme of diversity and inclusion, including the current webinar series, on ACCA’s D&I web page
