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Increasing the number of women on a company’s board of directors in the United Arab Emirates has never been an easy task, as the increase in the number of people after the new regulations come into effect proves this.
Since the data compiled by Bloomberg, since the country announced on March 15 that listed companies should have at least one female board member, only 4 of the 23 people holding such positions in companies on the UAE’s two major stock exchanges Are female. In a country where approximately 96% of positions are held by men, this is almost impossible to move.
For Fatma Hussain, the only woman on the board of directors of Aramex PJSC, a logistics group based in Dubai, slow progress is evidence of a cultural concept that has freed women from this role. UAE nationals say that women-especially those from conservative backgrounds-avoid positions, which may require staying late or interacting with male colleagues. The UAE national is also the Chief Human Capital Officer of TECOM Group, a subsidiary of Dubai Holding, a sovereign investment tool.
Hussein said: “I interviewed a lot of people. Sometimes female candidates have to ask their parents’ consent to make an offer because there are many men.” Hussein said.
Although women in the UAE account for 70% of all university graduates, the social environment poses a daunting challenge to the fight for gender equality. According to data from the UAE Gender Balance Commission, although women make up about two-thirds of workers in the public sector, only 30% hold leadership positions. A report by JPMorgan Chase & Co. last year did not show “clean data” on female employment in the UAE, but it is estimated that their labor force participation is poor even when compared with neighboring countries such as Saudi Arabia, Kuwait and Qatar.
This is the background for the UAE board of directors to fuel the flames, and companies that fail to comply with the regulations may be punished. The Middle East has taken an unprecedented step. The oil-rich Gulf region (which has long relied on crude oil to maintain its trillion-dollar economy) is seeking a diversified talent pool as the world’s dependence on hydrocarbons weakens. The World Bank estimates that the female labor force participation rate in the Middle East and North Africa is the lowest in the world.
Give teeth
The UAE wants to show that it attaches importance to the new rules. In its written response to the question, the Securities and Commodities Administration told Bloomberg that penalties for companies that do not comply with the regulations may range from warnings to fines, or even prosecution. An SCA spokesperson said that the company will be required to disclose board representatives in its annual report.
Since the announcement of the rule, Dubai’s largest developer Emaar Properties PJSC, telecommunications provider Du, Abu Dhabi National Petroleum Distribution Corporation (a subsidiary of oil giant Adnoc) and Dana Gas have appointed women.
Facts have proved that gender quotas are also very successful in other parts of the world. For example, in France, women occupy at least 40% of board positions in large companies. This is a direct result of a law passed in 2011, which gradually implemented a quota system to increase women’s participation from 20% in 2014 to 40% in 2017. German women who have performed poorly in female company leadership have introduced a bill this year requiring at least one woman in the management of listed companies.
Racha Alkhawaja, chief distribution and development officer of Equitativa Group Dubai, said that SCA’s move was “absolutely necessary.” “In the past ten years, women have made great leaps in the corporate world, but their popularity has not been caught up. Therefore, not many people have reached the board level.”
She said that the mentality of putting women in primary care “needs to change.” “Before this happens, equality will not be achieved. It will take several generations to change the mindset.”
Mohamad Hamade, CEO of Amanat Holdings PJSC, said that cultural barriers are no longer as restricted as before. The company even appointed two women to the board of directors before the new rules were enacted.
He said: “I have witnessed the development of the past 10 years, and now it has become more diverse.” “I think it is not challenging to identify qualified women. There are many great things both locally, regionally and internationally. Achievers have accomplished a lot and can add a lot of value to listed companies.”
Low base
Investors are also under pressure, and they are pushing companies to solve environmental, social and governance (or ESG) issues. The company is making progress. For example, PJSC, the largest first bank in the Gulf States, appointed Hana Al Rostamani as Group CEO this year.
Still, “the reality is that we started from a very low starting point,” said Diana Wilde, co-founder of Aurora50, a UAE-based social enterprise that is committed to building a gender-balanced board of directors. She said that compared with the United States, the United States has at least one woman on every board of the S&P 500 Index, while in the United Kingdom, more than 34% of board positions in the FTSE 350 Index are held by women, while the United Kingdom is “really low “.
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