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Research consistently demonstrates the positive impact of gender diversity on corporate performance, risk management, and innovation. Studies show that companies with gender-diverse boards are 21 percent more likely to outperform their peers on profitability. Research also revealed that companies with more women on boards experienced higher financial returns, lower volatility, and reduced instances of financial restatements.
In the Middle East, where gender disparities persist in various spheres of society, the representation of women on corporate boards remains disproportionately low. According to a report by Hawkamah, women occupy just 13 percent of board seats in the region, significantly below the global average of 20 percent. This underrepresentation deprives companies of diverse perspectives and expertise and undermines their capacity to address complex ESG challenges effectively.
Gender diversity on boards is not merely a matter of equity but a strategic imperative for sustainable business success. Women bring unique insights, experiences, and skills to the table, enriching boardroom discussions and enhancing decision-making processes. By fostering an inclusive corporate culture that values diversity and empowers women leaders, companies can unlock new opportunities for growth, innovation, and long-term value creation.
Hawkamah, the Institute for Corporate Governance, advocates for proactive measures to promote gender diversity on boards and enhance ESG accountability. Firstly, companies must prioritise diversity and inclusion as core corporate governance principles, setting measurable targets and holding themselves accountable for progress.
This entails implementing transparent recruitment processes, providing leadership development opportunities for women, and fostering a culture of inclusion that empowers all employees to thrive. (couple of examples of actions undertaken by Hawkamah will be good to mention here)
Investors and stakeholders are pivotal in driving change by prioritising gender diversity in their investment decisions and engagement with companies. Research shows that companies with diverse boards are better positioned to navigate ESG risks and capitalise on emerging opportunities, making them more attractive investment prospects. By integrating gender diversity considerations into their investment criteria, investors can incentivise companies to prioritise diversity and accountability.
Policymakers are responsible for enacting legislation and regulatory frameworks that promote gender equality and diversity in corporate leadership. By mandating transparency and accountability, regulators can catalyse progress towards gender parity and ESG accountability in the corporate sector.
International Women’s Day provides a moment to celebrate, reflect and recommit to pursuing gender equality and diversity in corporate governance. By harnessing the collective talents and perspectives of women leaders, boards can build more resilient, inclusive, and sustainable organisations that drive positive change.
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