As the GCC governments propel themselves to new heights, Tony Long, CEO of CPI Financial highlights the significance of a crucial initiative that is evidently changing corporates in the developed world.
In the February issue of Banker Middle East, we featured Rania Nashar, CEO of Samba Financial Group on the cover, with a five-page interview discussing her thoughts on the bank’s performance and her vision for the future. As the first female CEO of a listed commercial bank in Saudi Arabia, Rania’s rise to the top is testament to the capabilities of women in what is arguably one of the most fiercely competitive, male dominated C-suite environments in the business world, but unfortunately her story is a rarity in the banking profession and particularly in the Middle East in general.
Deloitte’s fifth edition of Women in the Boardroom (June 2017) gave a global perspective on how women are represented at board level, and whilst the there is definitely progress being made in some countries, it is still relatively slow in most markets, and extremely poor in many others. The most glaring statistic being that whilst on average women represent 15 per cent of board seats globally (which was up from 12 per cent in 2015), berating the UAE for being rock bottom of a list of 64 countries at only two per cent.
In contrast, the best performer was Norway with 42 per cent of women holding board seats, with France second at 40 per cent and Sweden third on 32 per cent. The UK came in at 13th on 20 per cent and the US further down at 25th on 14 per cent. Interestingly, Finland and Denmark came in seventh and eighth with 25 per cent and 24 per cent respectively, giving Scandinavia four out of the top eight countries in the world, so something different is definitely happening there in a meaningful way.
It is also telling that in companies with a female CEO the level of female board members rises to 29 per cent, compared to 15 per cent for companies with male CEO’s, demonstrating that women in senior leadership positions, not surprisingly, are much more proactive about changing the status quo. And there’s good reason for this. According to Dame Vivian Hunt, McKinsey UK’s Managing Partner, “The correlation between diversity and financial performance is clear across different sectors and geographies: more diverse teams equals significant financial outperformance.”
Among the findings of research conducted by McKinsey between 2011 and 2015, the most gender diverse quarter of companies were 20 per cent more likely than the least diverse to have above average financial performance, and encouragingly, financial services companies performed best in terms of gender equality. This is only going to increase as more women take the reins of bigger companies.
Other research conducted by Korn Ferry suggests that the reason for this may be the different attributes that women bring to executive leadership. On average women tend to have held a more diverse range of roles before becoming CEO and are four years older compared to McKinsey's benchmark data. Women also bring more altruistic aspects to the fore. Whilst female CEOs interviewed by Korn Ferry were just as motivated by collaborating with other people, taking on more responsibility, power, etc., more than two-thirds said they were motivated by a sense of purpose and believed that the company could have a positive impact on its community, its employees, or the world around them. Nearly one quarter said creating a positive culture was one of their most important accomplishments.
Amidst the rapidly changing landscape of banking around the world, especially in the Middle East and the emerging markets of Africa and South-East Asia, it is likely that banks which can relate to these values and become central to the lives and communities of their customers will perform much better. It’s time to fully embrace gender equality in our industry, for everyone’s benefit.