BUILDING A STRONG PIPELINE

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The recent Grant Thornton International Business Report clearly indicates a deficiency of women in leadership positions in SA with 78% overall male leadership.  Coupled with the upcoming Women Empowerment and Gender Equality Bill, which requires the achievement of at least 50% representation and participation of women in all decision-making structures, our male business leaders may be forgiven for scratching their heads on the whereabouts of these sufficiently qualified women.

It should be said that the aim of greater representation of women in boardrooms must not be achieved simply by fixating on the high-flyers and ignoring the vast majority of women in middle management.  Nor should it increase a sense of tokenism, with good quality male board members being sidelined or ousted to make way for poorer quality women candidates.In order for the Bill to add value, it needs to be seen as an opportunity to bolster, not undermine, commercial competitiveness.

To aide public and private sector leaders in preparation for this, international nonprofit businesswomen’s organization, BPW South Africa and the Department of Trade & Industry (the dti) have joined forces to invest in a world class “Women on Boards” Director Development Programme to create a Register of female leaders in South Africa who are excellently trained and, as a result, are highly sought after by Boards.  There will no longer be any reason to pad Boards with token non-executive directors, to allocate power on the basis of sex rather than merit or to bemoan the scarcity of available qualified women. All men in leadership are urged to advocate for meaningful change and to support this Programme of developing and maintaining a strong pipeline of female talent.

The Boardroom is where strategic decisions are made, governance applied and risk overseen. It is therefore imperative that boards are made up of competent high calibre individuals who together offer a mix of skills, experiences and backgrounds. Since companies have a duty of care to their shareholders, board appointments must always be made on merit, with the best qualified person getting the job.  Clearly however, there is a limited pool of qualified female talent capable of holding these significant positions, resulting in extensive window dressing. The end result being women in leadership positions who are not up to the task, which has a negative trickle-down effect on all women in the workplace. A lack of skills for board membership is the biggest risk to good governance in South Africa. No company can afford to have an unqualified person on its board, whether male or female.

BPW SA President, Toni Gomes says however that women must also take more responsibility by breaking out of their men-dependency mentality. No system, including quotas will automatically rescue women unless they begin to step up to the plate. “If you’re serious about serving on a corporate board, the best investment is to invest in yourself, regardless of gender.  If you’re on a board simply to tick a box, your voice will be neutered and your advice will not be heard.”

Minister Rob Davies has appealed to both government and the private sector to join forces in supporting this Programme, thereby fast tracking the economic empowerment of women. The New Companies Act and the King III code of conduct highlight the accountability of directors, and allow for criminal action to be taken over negligent actions or decisions, necessitating more specialized training and certification, said Davies.  If sued for losses incurred on their watch, an unqualified director will be hard pressed to prove they acted honourably against a background of ignorance on matters of ethics and corporate social responsibility.  It is a misconception that the liability of non-executive directors is limited because they are not involved in day-to-day management. The courts do not make that distinction, the legal rules are the same for all directors.

According to Grant Thornton’s 2013 International Business Report (IBR) the percentage of women in senior management positions in SA has been static for the past six years with only 28% of SA senior management positions filled by women.  Of concern is that 21% of SA businesses surveyed for 2013 have no women at all in senior management positions.  Chief Financial Officers in SA rose to 32%, CEOs however continue to be down at 10% and a minimal 15% of SA women on boards, compared to 19% globally and 26% in the BRIC economies.

However, says Gomes, “If you drill down on these figures there are a number of prominent women who hold multiple board positions. One woman holds seventeen positions, many hold between ten and fifteen and there are a few who hold up to five. So the actual pool of women on boards is smaller than the percentages suggest.  If we continue along this path, middle management level women who are overlooked in favour of the chosen few, will eventually leave the job market altogether.”

Given the crucial role the Board plays in overseeing an organisation, BPW South Africa and the the dti have joined forces to invest in a Director Development Training Programme for women (and men). The training is designed and managed by BPW SA and certified by the dti.  The first group of candidates consisting of senior Directors from both the public and private sector ie, SASOL, TCTA, Group Five, Government Pensions Administration Agency, etc. has already completed training, some of whom will be placed on the public Register for Board posts and others are registered by their companies for retention purposes.

We have therefore drawn up a programme consisting of 8 phases – each of which is imperative for directors to familiarise themselves with.  These 8 phases include legislation, finance and corporate governance but also additional topics such as Media Training, Presentation Skills, Leadership, JSE Training, and the dti will also train candidates regarding their expectations of board members.  An exciting inclusion is the board meeting simulation facilitated by a “real life” CEO and Company Secretary.   The dti will also attend many of the sessions to ensure they stay in touch with the candidates and provide leadership and motivation and to discuss future board shadowing with the dti boards.

Ms Gomes advises that leaders should not only focus on senior management but also on their middle managers thereby creating opportunities that encourage women to accelerate their professional growth on a course to the top.  Finding ways to help women in the middle stay in the game and advance to higher levels will clear the blockages in the pipeline and go a long way towards bringing more talent to the top.  The low number of women on boards is in part a symptom of insufficient numbers emerging at the top of the management structure and the under-representation of women in senior management generally. Top management must be visibly committed to achieving the gender diversity goal.

Ms Gomes believes that there should also be greater transparency to ensure that more women are brought into the recruitment process. Both executive search firms and company Chairmen have a part to play in this.  Currently almost half of directors are recruited through personal friendships and contacts, only 4% have a formal interview and only 1% obtain the role through answering an advertisement. (Higgs & Tyson)

Gender transformation must not be just a gender numbers game. It should be about the richness of the board as a whole, the combined contribution of a group of people with different skills and perspectives to offer, different experiences, backgrounds and life styles and who together are more able to consider issues in a rounded, holistic way and offer an attention to detail not seen on all male boards which often think the same way.

The failure of any business or economy to maximise the talents of all its people will result in below-par performance. Tapping into the under-utilised pool of female talent at board level is vital if South African companies are to remain competitive and respond to rapidly changing expectations and market demands. South African corporate competitiveness is at stake.