Forcing Gulf firms to fill top jobs with women treats symptoms not causes, says chief economist
Using quotas to force Gulf companies to fill a percentage of their board seats with women will not solve the region’s gender imbalance, Dr Nasser Saidi said.
Despite women occupying only 1.5 percent of the Gulf’s 4,254 board seats, using quota policies similar to those seen under Emiratisation to push up numbers would fail, Saidi said.
“Quotas should not be thought of as major instruments. They deal with the symptoms, but they do not deal with the causes. I think it’s more important that we deal with the causes, rather than the symptoms,” Saidi, chief economist Dubai International Financial Authority, told Arabian Business.
“Quotas are not the right way to go about promoting diversification.”
According to Amer Halawi, head of research for Shuaa Capital, only 63 of board seats across 582 Gulf companies are filled by women, a ratio surpassed only by Japan and Italy.
This is despite women outperforming men in the classroom – according to the World Economic Forum, more Arab women are securing degrees than ever before.
In Saudi Arabia, the Gulf’s wealthiest economy, just one percent of board seats are held by women, marking the worst ratio in the region.
In the UAE, women hold 1.5 percent of the top jobs. In Oman and Kuwait, the best-performing Gulf states, the figure is 2.3 percent and 2.7 percent respectively.
The figures reflect a wasted economic resource, Saidi said, and a business culture that favours sharing top jobs among a small group of participants.
“We need to remove barriers to the participation of women in the labour force. It’s part of the role of the government to create awareness of these issues. Just like in good corporate governance, the tone is set at the top,” he said.
Had boards in the region improved their diversification ahead of the recent financial crisis, many could have fared better, he added.
“For good governance, boards need to have a large proportion of independent, non executive directors. The last thing you want, as we found out during the crisis, is for the executives themselves to decide what the compensation would be. That leads to disaster.”
Women in most countries account for less than 15 percent of company directors.
In 2002, Norway introduced a 40 percent quota for women in its boardrooms, a target it has now exceeded.