UAE businesswomen welcome new boardroom decision but say it 'shouldn't need to be law'

The UAE's directive mandating private companies to appoint women on their boards of directors is a step in the right direction for enhancing gender diversity and boosting profitability. However, companies should be more proactive in promoting inclusion without the need for legislation, analysts and business leaders have said. By bringing fresh perspectives, driving competition and pushing for innovation, women are poised to give a much-needed boost to companies' bottom line . Additionally, this shift will help break down the 'boys club' mentality that often dominates corporate echelons, paving the way for new ideas and a stronger pipeline of female talent for the future, they said. Mona Jalota, founder and managing director of Krypton Global Real Estate, a boutique agency specialising in international real estate and investment opportunities, said the move is "a huge push in the field of women empowerment in this country" that will help bring positive changes in the corporate culture. "The companies will be shaken out of their comfort zone. Companies are usually a big boys club generally, so they now have to get used to having a strong independent female voice in their midst: voice of reason or a perspective that makes them think differently and makes them accept inclusivity among peers," she said. Still, some businesswomen have questioned why it took legislative prodding to force private companies to take action on bringing more women on their boards when the social and commercial benefits are already clear and well-documented. "Why is this still a discussion in 2024? It's sad that it's still a legislative move and not a natural holistic move by companies to say this is a high time coming," Ms Jalota said. Rather than see the legislation as an exercise in ticking the regulatory boxes, companies should be more proactive about developing, promoting and benefiting from their female talent. "If companies already had a strong culture of gender diversity, then the legislation wouldn’t have to be made. Legislation ensures equal opportunity. If companies will be short-sighted, then things will reach a culmination point for the legislation to be passed," Ms Jalota said. "If they have a myopic vision and see it as a token move, then it will be a disservice to them and to business growth in the UAE. Companies are willing to put so much money into data and research initiatives, so this is a win-win for them. It doesn’t cost anything and ensures they get benefit." The latest directive announced on Wednesday by the Ministry of Economy is aimed at private joint-stock companies and will come into force in January. Such companies are businesses owned by their investors and require a board of directors to oversee their operations. This comes after the Securities and Commodities Authority in 2021 mandated all listed companies in the UAE to have at least one female director on their boards. Women hold 10.8 per cent of the board seats of publicly-listed companies in the UAE (133 of 1,231 seats across 168 companies) today, according to the GCC Board Gender Index Report 2024 by Aurora50 – a social enterprise working towards gender equality in GCC boardrooms – and Heriot-Watt University. The data showed women held 8.9 per cent of UAE listed companies' board seats in 2022, up from 3.5 per cent in 2020. The increase in numbers over the period shows that the quota system is effective in increasing female representation in corporate boardrooms over time, said Suzanne Locke, content strategist at Aurora50. The new directive for private companies will help "forge a bigger generation of inclusive leaders" as gender diversity works from the top-down and the bottom-up as the corporate culture starts to change, Ms Locke said. "When you have a diverse board, it creates a diverse and inclusive company and that trickles on to impact the industry and society. You can build much more quickly a pipeline of female talent at the top," she said. "A more balanced board creates a much bigger culture of diversity and that changes the culture. It combats group-think and drives the company to be more competitive with a diversity of thought. It's absolutely a business win. The companies perform better, they are more competitive and more innovative." An Oliver Wyman study published this year, which polled 800 people working in the UAE private sector, found 90 per cent of the men and women surveyed believe gender quotas or targets are helpful. This perception of targets increases with seniority, with 92 per cent of executives or those in senior management reporting that targets are necessary (53 per cent) or helpful (39 per cent). The survey found female leaders cultivate diversity: 76 per cent of participants have male managers, and only 40 per cent work in gender-balanced teams. However, teams led by women in the UAE are twice as likely to be gender-balanced than those led by men. Gender-inclusive organisations that prioritise the advancement of women reap a variety of benefits, including reporting a rate of revenue growth as much as 61 per cent higher than other organisations, according to a 2021 report by the IBM Institute for Business Value. More diverse companies also have the ability to spot and reduce risk by 30 per cent and enhance innovation by 20 per cent, according to a 2018 report by the Deloitte Review. Business leaders in the UAE said the country's private companies will have no trouble finding a pool of talented women with leadership capabilities to appoint to their boards. "As a company working with corporate women at the managerial level and C-suite level, we found that there is the most incredible talent available in the workforce in the UAE," Ms Locke said. "The problem is connecting that workforce with the boards and getting those women to be better known so that they can reach the top positions." Farida Al Awadhi, chairwoman of the Emirates Businesswomen Council, shared this view. "In reality, we have a lot of great cadres, women with a lot of knowledge, but companies have to look around more and find these women who are qualified.. they only concentrate on a few faces that are known to them. It's time that they go through the whole field and pick out the best qualifications," she said. Achieving more visibility in the workplace requires more networking opportunities. According to the Oliver Wyman survey, 29 per cent of women rated a lack of access to relevant mentors and sponsors as a barrier to career progression, making it the second leading reason after bias. This is backed up by the fact that women rated networking as the top training they would find beneficial, particularly earlier in their careers when there are likely fewer opportunities to meet potential mentors and sponsors, the report said. Women need to start networking at an earlier stage in their career and become more comfortable with promoting themselves and their achievements, Ms Locke said. UAE businesswomen also emphasised the need for companies to invest more in training and mentorship for their female talent to empower them to reach the top levels, particularly in areas of policy and technical knowledge, they said. A quota-based system for female board directors does not exclude selection based on merit, Ms Al Awadhi said. "Definitely this has to be based on merit when selecting a board member because we have a lot of female capabilities. It has been proven. Women are very hard working and very sincere," she said. "Giving more [boardroom] chairs to women will make men indirectly look to that opportunity, otherwise they will give it to the men they know. We need that system until we prove that women are not just there for sake of occupying the chair. But that they add value and are an important element of the board ... their decisions and their input and experience can benefit the company."

UAE businesswomen welcome new boardroom decision but say it 'shouldn't need to be law'

Ministry of Economy's latest directive on female boardroom participation seen as strategic move to drive success and profitability in the corporate world