According to Stats SA’s latest mid-year population report,⁽¹⁾ women make up 51% of South Africa’s not inconsiderable population of more than 63 million people, and more women than men attain a tertiary qualification. And yet, the achievement of gender parity on boards seems like limping progress, at best. The United Nations⁽²⁾ estimates that, at the current rate of progress, it will take another 140 years to achieve gender parity in positions of power. This despite mounting evidence that diverse boards lead to better decision-making, improved corporate governance, and enhanced company performance.⁽³⁾⁽⁴⁾ The progress in women’s comprehensive representation on boards in South Africa has been, in a word, glacial. In this article, I provide a snapshot of developments around the world through the latest research results, unravel some of the considerations and opposing forces in achieving this goal, and offer some advice.

The state of women’s board participation

A global perspective

Deloitte Global⁽⁵⁾ notes that no country has exceeded the 45% mark of women’s board representation. However, there has been notable progress in women chairing board committees (Audit, Governance, Nomination, Compensation, Risk), at 57% in Risk in New Zealand, and 60% in Risk and 57% in Compensation in Italy. More than 40% of European Compensation Committee chairs are women. However, comparing Compensation Committee chair figures in Europe to those in the USA paints a vastly different picture. Women hold the majority of Compensation Committee chairs in Italy, France, and Ireland, with the United Kingdom standing at nearly 60%. In the United States, that figure plummets to 27%, although, in 2023, across the Russell 3000 Index, 38% of new board members were women. Deloitte Global notes the unacceptably slow growth in the percentage of women on corporate boards worldwide, from approximately 20% in 2022 to 23.3% in 2023.⁽⁶⁾

Deloitte Global’s⁽⁷⁾ latest study of women’s board representation worldwide found that five of the six countries with the highest percentage of women on boards have mandatory quota legislation: 33% in Belgium and Netherlands and 40% in France, Norway, and Italy, where the proportion of women on boards significantly exceeds the global average of 23.3%. In the UK, women hold 43.4% of FTSE 100 boards seats and 30.5% of board seats in the 50 largest companies.⁽⁸⁾ In Australia, which subscribes to voluntary disclosure and severe naming-and-shaming practices, women’s representation has more than doubled since 2014 (from 15% to 34%). Two-thirds of UK and US institutional investors have set targets for gender diversity.⁽⁹⁾ In Southeast Asia, women hold 19.9% of board seats, a mere 2.8% increase since 2021.⁽¹⁰⁾ Deloitte Global⁽¹¹⁾ reported that women hold only 23.3% of board seats worldwide and a mere 6% CEO seats of listed companies.

In the USA, companies listed on the Nasdaq stock exchange have until December to comply with or explain with regard to a 2022 rule on diversity requirements. In Europe, the European Union’s gender law requires that 40% of non-executive director posts or 33% of all director posts be held by women by the end of June 2026. In the UK, disclosures are expected under a Financial Conduct Authority rule of 2022. With regard to the Asia-Pacific region, China, Hong Kong, Malaysia, Indonesia, Japan, and Australia are expected to implement stronger board gender diversity rules.⁽¹²⁾ The FTSE Women Leaders Review,⁽¹³⁾ an independent business-led framework supported by the UK government, set a target of 40% women’s representation on boards of FTSE 350 companies by end 2025. The target has already been achieved, with women currently holding 43.4% of board positions.

McKinsey & Company⁽¹⁴⁾ reported that women worldwide hold only 7% of C-suite positions — just four percentage points higher than in 2017. An interesting finding by Deloitte Global⁽¹⁵⁾ is the ‘multiplier effect’: for each woman added to the financial services sector’s C-suite, there is a quantifiable increase in the number of women in senior management positions.

Putting aside the philosophy of moral imperatives for a moment, let us focus on the bottom line — the business case — in the global perspective. Morgan Stanley⁽¹⁶⁾ examined 1 875 firms on the MSCI World Index, and found that those with greater gender diversity (a higher Holistic Equal Representation (HERS) score) outperformed less gender-diverse firms by 1.6% in 2022. The examination also highlighted marked differences according to geography and industry, with the share prices of companies that are more gender-diverse outperforming others by 7.1% in Europe, 3% in Japan, and 2% in the USA. The rest of Asia was an outlier, at -5.6%. Sector data showed that share prices in consumer discretionary companies showed the greatest outperformance at the global level (13.8%), followed by healthcare (9.0%), financials (8.3%), real-estate investment trusts (8.2%), utilities (4.5%), and industrials (1.8%). However, share prices of gender-diverse energy companies had underperformed (-15.8%), but with regional inconsistencies.⁽¹⁷⁾

An interesting case is the mining industry. While women’s representation in this industry is lower overall than in more ‘feminine’ industries, their presence has been felt in this highly male-dominated industry. Gender-diverse teams in mining have been found to have an 11% higher adherence to production schedules and a staggering 67% lower frequency of injury. That mining is a dangerous industry is trite, and one would think this industry would rush to capitalise on these abilities to the very top levels. The reality is that there are only 13% women in C-suites and no women CEOs amongst companies in the S&P 500, with McKinsey calling the mining industry “a laggard among laggards”.⁽¹⁸⁾ Interestingly, the Australian Government Workplace Gender Equality Agency noted that the 30% target of women on boards has served its purpose, but is no longer useful, and that more is needed to achieve gender parity.⁽¹⁹⁾

The case of South Africa

The 2017 census by the Business Women’s Association of South Africa (BWASA) showed that, in companies listed on the Johannesburg Stock Exchange (JSE), women held 19.1% of directorships, 4.7% of CEO positions, 6.9% of board chairs, and 29% of executive positions. In state-owned enterprises, women held 41.2% of directorships, 5% of CEO positions, 10% of board chairs, and 28.5% of executive roles.⁽²⁰⁾ According to a 2024 report by Business Engage on 247 of the 292 companies listed on the JSE (therefore not representative of the entire JSE) women comprise 36% of board members overall, but only 19% of chairs, 10% of CEOs, and 22% of CFOs. Furthermore, many companies still follow the ‘one and done’ approach — a token appointment of one woman to the board to appease critics.⁽²¹⁾ Board membership figures show a mere 1% increase from 2023, and executive positions show a 2% decline. This despite women comprising 46% of the country’s economically active population.⁽²²⁾

While there are no legislated mandates for board gender diversity in South Africa, the King IV Code⁽²³⁾ does encourage companies to strive to achieve parity and report on progress in their annual reports. Section 3.84 (h)(i) of the JSE⁽²⁴⁾ listing rules, with regard to corporate governance, states:

the board of directors or the nomination committee, as the case may be, must have a policy on the promotion of gender diversity at board level. The issuer must confirm this by reporting to shareholders in its annual report on how the board of directors or the nomination committee, as the case may be, have considered and applied the policy of gender diversity in the nomination and appointment of directors. If applicable, the board of directors or the nomination committee must further report progress in respect thereof on agreed voluntary targets

The JSE listing requirements also refer to Principle 7 of the King IV Report,⁽²⁵⁾ which stipulates that:

The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively.

Practice 11 of Principle 7 notes: “The governing body should set targets for race- and gender representation in its membership.”⁽²⁶⁾ South Africa’s president, along with heads of state of the Southern African Development Community, signed the Protocol on Gender and Development in 2008, which contained the target of 50% women in decision-making positions in both the private and public sector. Progress has, however, been slow.⁽²⁷⁾

The 2017 revisions to the JSE listing requirements prompted firms to implement gender equity policies for board representation, but did not indicate a desired ratio for targets.⁽²⁸⁾ There is a lack of transparent reporting, despite the JSE requiring that all listed companies have a policy promoting gender diversity on boards and reporting on its implementation. Setting an example, women make up 55% of the JSE’s board and 78% of its executive committee.⁽²⁹⁾

In summary, women’s representation has been correlated with significant improvements in various aspects related to business, although the nature of the link has not been determined. Nevertheless, be it direct or indirect, there is little to no contestation that the link is positive. Women tend towards a more collaborative leadership style and seem less prone to groupthink; they support open communication and giving individuals a voice. This constructive approach is posited to cultivate innovation and creativity, enhanced decision-making, improved risk management, and sound environmental, social, and governance practices.^{(30)(31)(32)(33)(34)}

Gender-balanced boards engage in more transparent financial reporting and monitor management more diligently, leading to the company enjoying an enhanced reputation as a good corporate citizen. Women, who are responsible for the largest share of consumer spending, also may have superior insights into products, and are usually more attentive to customers’ needs.^(35)(36)(37)

A variety of measures have been suggested and implemented to ensure at least a 30% representation of women on boards and in positions of power in the public sector, which have met with varying levels of success and, of course, resistance. Critical mass theory⁽³⁸⁾ holds that a representation of 30% women is the threshold to ensure a meaningful impact on board decisions, which led to the founding of the 30% Club, a global campaign led by CEOs and chairpersons⁽³⁹⁾. I look at the two main categories of these efforts — targets vs quotas, and contrast how these are viewed and what has worked and not worked.

Quotas vs Targets

In efforts to force non-responsive companies’ arm, a number of countries introduced quotas for women’s representation, while others opted for the soft option of targets. In the simplest terms, quotas are a set, quantified minimum, and they are mandatory — the position may not be filled with a person who does not meet the quota criteria, despite being suitable for the position — with consequences for non-compliance. Targets are aspirational and voluntary, and thus more flexible. Those in favour of quotas argue that, in the absence of quotas, progress in gender equality is negligible, and that quotas effect rapid change. Those who are opposed to quotas argue that the approach equates to outside interference in company governance, leads to added administrative costs, and undermines the principle of career advancement based on merit, leading to promising male candidates being overlooked. Those in favour of targets argue that this approach allows companies to tailor and adjust diversity efforts to their circumstances and context. Whether by quotas or target, it is argued that having more women in positions of power will not only lead to a narrowing of the gender gap, but also the associated pay gap.⁽⁴⁰⁾

Quotas initially did not have the desired results in Norway, with some companies resisted implementing quotas to the point of delisting. However, quotas have, since 2005, been successfully implemented in Norway, followed by Spain, France, and Belgium.⁽⁴¹⁾

In the USA, Morgan Stanley⁽⁴²⁾ analysts are of the view that that regulators will favour the ‘comply or explain’ approach over more demanding mandatory steps. South Africa saw the King Report intensifying efforts to increase transparency by moving from ‘comply OR explain’ in King III (which became a JSE listing requirement) to ‘comply AND explain’ in King IV.⁽⁴³⁾ Mervyn King, former chair of the King Committee, said that many companies see disclosure simply as part of the cost of doing business, following a tick-box approach without any real engagement.⁽⁴⁴⁾

While quotas and targets are seemingly bearing some fruit in diversifying boards, it is unclear whether there is a recipe or process to follow. Deloitte Global⁽⁴⁵⁾, in research on 18 000 companies across 50 countries and geographies spanning Asia Pacific, the Americas, the Middle East, and Africa, reported that five of the top seven countries in terms of women as board chairs do not apply similar quotas, and some have no quotas for women’s board representation.

While a number of countries employ gender quotas, a mere 8.4% of the world’s boards are chaired by women. For example, while Norway and France, whose governments were amongst the first to introduce quotas (in 2005 and 2010, respectively), are nearing gender parity in the boardroom, less than 13% of these women hold board chairs. However, those with quotas still outperform those without, as seen in Germany and Switzerland, where quotas were only introduced more recently, showing less than 5% women chairing boards.⁽⁴⁶⁾

The picture of women’s representation in C-suite (executive) roles is even more bleak. Only 6% of CEOs in the world are women, a mere 1% increase since 2022. At this rate, we can look forward to CEO gender parity in 2111.⁽⁴⁷⁾ This is a grave concern, as it is known that boards rely heavily on CEO experience in selecting board members and chairs. But this is only one of a myriad hurdles and potholes in the road to a board seat, whether via quota or target.

Challenges

The glass cliff

Glass cliff phenomenon is the tendency of appointing women and other underrepresented groups in leadership positions that are risky, such as during times of organisational crisis or decline due to poor performance or controversy, with the appointment of a woman seen as a symbolic gesture. These women face a high probability of failure, and are, in effect, being set up for a very public downfall.⁽⁴⁸⁾ The glass cliff metaphor, introduced by Ryan and Haslam in 2005, highlights the heightened risk of poor outcomes, symbolising both women’s elevated leadership positions (through the imagery of height) and the unstable nature of their roles as they balance on a precarious edge.⁽⁴⁹⁾

Over-boarding

In a desperate scramble to appoint women, boards may focus on the small ‘club’ of women who already serve on boards, leading to over-boarding of these women. This casts doubt on these women’s independence, impartiality, and effectiveness. There is no agreement on the definition of a director serving on too many boards to be effective, and considerations in determining over-boarding include mounting board responsibilities and greater investor expectations regarding the monitoring of corporate governance risks. However, in weighing over-boarding, it has to be considered whether the board member is a professional director or employed full-time. Nevertheless, sentiments in the USA are leaning towards a maximum of four board positions.⁽⁵⁰⁾

To measure over-boarding, Deloitte Global developed the ‘stretch factor,’ a research tool that measures the average number of board seats an individual holds in a particular market. The stretch factor increases as the seats held by a single director increase. Deloitte Global’s⁽⁵¹⁾ most recent study found that the stretch factor remained unchanged for both women (1.30) and men (1.17). Furthermore, of the 20 geographies with the highest stretch factor for women, only four had quota legislation for publicly listed companies. In Norway, which is subject to quotas, the stretch factor declined from 1.15 in 2014 to 1.04 in 2023.

In South Africa, however, concerns have been raised about over-boardedness, particularly of directors who also serve in an executive role and on a number of committees, and it has been recommended that a director hold a maximum of three board seats.⁽⁵²⁾

Unhealthy concentrations

Women’s management experience across functions is not sufficiently diverse, due to what is called the ‘glass walls’ phenomenon. In the absence of women in line functions and positions with cross-functional responsibilities, women are clustered in certain management areas, such as human resources, public relations, communications management, finance, and administration, where they have limited opportunities (largely due to how caregiving is structured) to engage with operations and strategic decision-making.⁽⁵³⁾ This phenomenon is exacerbated by a reduction in line roles and an increase in staff roles (support functions such as human resources, legal, and IT), with companies hiring women into these positions. This is evidenced by the fact that, over the past decade, the number of women appointed to C-suite positions in the financial services industry exceeded the number of men.⁽⁵⁴⁾ It therefore stands to reason that this is not a viable way of creating parity — companies cannot multiply these roles indefinitely,⁽⁵⁵⁾ and more pipelines of career access need to be pursued.

Talent pipeline

As noted, companies prefer board members with CEO experience, which, coupled with ageism against younger women, who are automatically viewed as too inexperienced for a board role, constricts the talent pipeline. The talent pipeline is further narrowed by women’s lack of line management experience, few role models, and a dearth of leadership training and mentoring.⁽⁵⁶⁾ Add to this inflexible work arrangements,⁽⁵⁷⁾ and it is no wonder companies complain about a shallow talent pool.

Research in the USA has shown that the number of women is less than men at every stage of the corporate pipeline, especially in being hired for entry-level management positions, and they are less likely than men to be promoted, combined, a phenomenon referred to as the ‘broken rung’.⁽⁵⁸⁾ There are exceptions in particular job types such as in South Africa, women may outnumber men in areas such as administration. However, the choked talent pipeline is evident from the fact that the growth of women’s representation in senior leadership and next-generation roles is even slower than the growth in their representation in executive positions, which does not bode well for future talent searches amongst women.⁽⁵⁹⁾

Femwashing

One highly undesirable phenomenon is organisations engaging in femwashing. This practice, at its most innocuous, is organisations appointing women to the board for the sake of compliance reporting. At worst, organisations engaged in femwashing then capitalise on and profit from their actions by, for example, polishing their marketing brand and company image. Neither manifestation of this odious practice does anything for the true advancement of women. Women, in general, regard femwashing as condescending and inauthentic.⁽⁶⁰⁾ Femwashing also exacerbates imbalances in power relationships, as these women are not respected or deemed worthy of their role, with some, including subordinates, indeed wondering if their appointment was decided on the ‘casting couch’.⁽⁶¹⁾ Unfortunately, in these circumstances, women who earned their appointment on merit are tarred with the same brush.

Lack of investor engagement

While there is increasing awareness of and efforts towards constructive action from investors in enhancing women’s representation, these are, as yet, insufficient, and more needs to be done.⁽⁶²⁾ Investors wield considerable power in influencing companies’ decisions in appointing CEOs, board members, and chairpersons, as well as in demanding transparent reporting.

Lack of follow-through

There is clear inertia in companies’ efforts and programmes to advance women, mainly due to it no longer being considered a priority, and very few companies track the outcomes, if they even engage in such programmes. This means zero translation into management action.⁽⁶³⁾ The problem is compounded by women board members being loath to raise issues of a gendered nature, such as women’s representation, due to a gendered board hierarchy and the fear of being viewed as a troublemaker.⁽⁶⁴⁾

Recommendations

While, on the face of the data, quotas may seem a self-evident ‘incentive’ when parity efforts stall, this aggressive and polarising approach comes with undesirable unintended consequences, such as a significantly increased risk of femwashing and over-boarding, compared to the more flexible and context-aware approach of targets. These outcomes do women more harm than good — both the women already in board positions and those who harbour the aspiration. Thus, in my view, quotas are not the answer for every jurisdiction. A mix of relevant and appropriate mechanisms will vary between countries.

Growing a talent pool and retaining top talent require that organisations sincerely commit to change and embark on concerted efforts to create and sustain internal awareness. It is vital that they recognise the antiquated biases and current challenges women face, and that they build mechanisms into their strategies for optimising women’s recruitment, retention, and promotion. These include closing the gender wage gap as an important signal to both current and prospective women employees of their value to the company, implementing family-friendly policies, providing mentorship and coaching for promising talent (including creating a shadow board), and engaging in open communication with women in senior positions.

Existing board members have a responsibility to cement the importance and legitimacy of such initiatives. Existing boards should also widen their scope in scouting for suitable talent. The world is changing at an unprecedented pace, and new specialist areas in the form of next-generation expertise, which require considered integration into companies’ strategic goals to ensure sustainability, are proliferating at an unprecedented rate. Fishing in the same (shrinking) pond is not the way to gain a competitive advantage. Boards should consider talent in non-profit organisations, unlisted companies, and larger private companies to deepen the pool.⁽⁶⁵⁾

Shareholders are in a unique and powerful position to encourage change through pressure. These activists and the organisation should collaborate in research on the current and desired state of the company’s talent pipeline and the required strategies, which must be followed through. These is a need for more accurate reporting on gender diversity, which would entail the collaboration of stock exchanges, and could be facilitated by the Institute of Directors in South Africa. Useful efforts could include investors giving preference to companies that are showing real progress towards gender-balanced boards and following a voting policy that prioritises gender diversity when voting on new board members. As most board decisions are taken at committee level, listed companies should set specific targets for women’s representation on all these committees, not just those involving disciplines in which they are spoiled for choice with regard to suitable women. Investors should also demand gender parity in nominations for board members and documented reasons for short-list selections.

In closing, the challenges and considerations noted above, while complicated, multifaceted, and oftentimes interlinked, are not insurmountable, and I still consider a target, rather than a quota, of 30% as both reasonable and feasible in the short term, with 40% as the stretch target. In closing, I’ve said it before,⁽⁶⁶⁾ and I am saying it again:

While significant progress has been achieved and deserves recognition, we must remain steadfastly focused on the ultimate goal: creating a world where women on boards are embraced and valued with the same enthusiasm and opportunity as their male counterparts.