The trend towards more gender-balanced boards is starting to gain traction in Pakistan. The move has come late to a nation that, with a population of 228 million, is the fifth most populous in the world. As recently as 2017, a survey of 550 companies listed on the Pakistan Stock Exchange found that there were just 11 female CEOs.
In recent years, Pakistan’s regulators and corporates have stepped up efforts to reduce gender inequality and create more opportunities for women. The push is particularly noticeable in banking and finance.
'Studies show that when men and women work together, they can achieve better and faster results'
Banks lead
In September 2021, the State Bank of Pakistan launched a policy to reduce the gender gap with a series of policies for both banks and the public, including an effort to improve gender diversity in financial institutions.
'Studies show that when men and women work together, they can achieve better and faster results,' says Maha Jafer Butt ACCA, director of research at Lahore-based Capital Stake, a company that provides analytics platforms, wealth management tools, data solutions and research.
Butt stresses that progress has been visible at some of the highest levels of policymaking and the industry. For instance, Ehsaas, a government poverty alleviation programme, is headed by Dr Sania Nastar, who has received international recognition for her work.
In 2020, Sima Kamil was appointed as deputy governor of the State Bank of Pakistan, after becoming the first woman to lead a major bank in Pakistan in 2017 when she became president and CEO of United Bank Limited. Butt notes that both are examples of how 'having women on the board can give your company a boost'.
Progress towards greater gender equality has been visible, says Nayab Ashfaq ACCA, manager for process review and controls in the credit operations department at Bank Alfalah, one of the largest private banks in Pakistan. She believes that mindsets are changing and that gender inequality has become less of an issue over the past two decades.
'There was a time in Pakistan when society wondered whether women would be able to participate in the financial sector; time has proven that women can not only work in the sector but excel as well,' she says, citing Shamshad Akhtar, the first woman to serve as governor of the State Bank of Pakistan, as well as Bank Alfalah's group head of retail banking, Mehreen Ahmed.
Regulatory reform
A move towards acknowledging the importance of gender diversity at board level has been assisted by a raft of new regulations. Section 154 of the Companies Act 2017 includes a new provision for all public interest companies to have female representation on their boards, while the Code of Corporate Governance for listed corporations, issued in 2019 by the Securities and Exchange Commission Pakistan (SECP), makes it mandatory for every board to have at least one female director or risk financial penalties, on a 'comply-or-explain' basis.
'Time has proven that women can not only work in the sector but excel as well'
A 2020 SECP report found that since the Companies Act 2017 was passed, the number of women directors had increased by 3%, rising from 8.8% in 2017 to almost 12% in 2019. The number of women chairpersons of listed companies rose from 24 to 33, up more than 37%, while 163 listed companies reported having at least one woman on their board in 2019, almost double the number from 2017.
In the year to March 2021, of the 21,168 companies that registered with the SECP, 5,145 had at least one woman as a director.
Enhanced performance
The reforms were further reinforced in March 2021, when the SECP issued a circular advising boards to 'oversee the implementation of gender diversity policies in their companies', carry out gender pay gap analysis and put in place policies to develop the skills of women employees. In announcing the circular, the SECP noted that it 'firmly believes that gender diversity in decision-making has a proven correlation with enhanced financial performance of the corporate sector and the overall growth of the economy'.
'Culture is evolving but we still have lots of challenges and lots of work to do on mindsets'
That same month, the SECP noted that Pakistan’s score on the entrepreneurship indicator of the World Bank’s Women, Business and the Law (WBL) index had risen from 50 to 75 after a series of reforms to allow women to register companies effectively and quickly.
Meanwhile, Pakistan's business community is encouraged to step up its commitment to gender equality with the recently-launched diversity awards, a collaboration between the Pakistan Business Council and the International Finance Corporation. Speaking at the virtual launch, Ahsan Jamil, CEO at Pakistan Institute of Corporate Governance, said that firms that take positive action and publicly declare their gender equality practices are better equipped to succeed in the future.
Visible progress
Butt says that there is now a more widespread recognition in Pakistan that gender diversity on boards generates real and measurable advantages, and that companies with gender-diverse management teams consistently perform better and more profitably.
'We can create a better environment by hiring women and taking advantage of their skills,' she says. 'When you have a better team you can get better results, which ultimately grows the country’s economy.'
'Culture is evolving but we still have lots of challenges and lots of work to do on mindsets,' adds Ashfaq.
'Change begins at home. You have to change minds and opportunities automatically increase. I think the time will come that we will reduce inequality and the gender gap.'
