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Women at the top
Published in Al-Ahram Weekly on 25 - 04 - 2019

Egyptian companies with gender-diverse boards outperformed those with all-male ones, a recent study by the International Finance Corporation (IFC) has found.
The study, entitled “Women on Boards”, shows that gender-diverse companies had higher profitability, less debt, improved board performance, and a better employee retention rate than those run by men alone.
It covered a sample of 2,139 Egyptian companies, focusing on two main groups: privately held companies and companies listed on the Egyptian Stock Exchange or on the Nile Stock Exchange for small and medium-sized enterprises.
The group of privately held companies was further divided to compare results between firms without gender-diverse workforces and those with an employee mix that was at least 25 per cent female.
The study found a positive relationship between financial performance and gender-diverse boards. It said that privately-held companies with female board members exhibited two per cent higher growth in terms of return on equity, four per cent higher growth in return on assets, and five per cent higher growth in return on sales (operating profit margins).
Furthermore, privately-held companies with gender-diverse boards displayed greater preference for equity financing and less dependency on debt, the study added.
As for publicly-listed companies, companies with female board members exhibited seven per cent higher return on equity, an equal return on assets of four per cent, and 14 per cent lower returns on sales.
The study said that diverse boards better reflected the marketplace and therefore customer and investor needs. Women drive purchasing decisions in 85 per cent of households in Egypt.
Such non-financial factors can allow companies to make better financial decisions, operate more efficiently and cost-effectively, and broaden their customer base, the study said.
The characteristics of female board members were highlighted by the study, including sound economic and strategic thinking, excellent problem-solving skills, and an exceptional ability to identify profitable deals.
The study's findings showed that such attributes yielded significant benefits for companies in the areas of risk management, planning, and strategic direction.
Besides financial performance, the study uncovered several key linkages between gender diversity and organisational structure.
In focus groups, interviews, and surveys conducted by the study, participants indicated that “the presence of women improves board dynamics and performance. They contribute a broader perspective and improve conflict management and communication.”
The respondents also perceived female board members as highly focused on the workplace environment, company culture, and professional development. “Such an emphasis contributes to increased employee satisfaction, retention, and talent development, all beneficial to building a company's human capital base,” the study said.
Additionally, study participants said that gender-diverse boards contributed to innovation and enhanced corporate social responsibility.
The study said that diversity, which offers different perspectives, experiences, and points of view, stimulated robust dialogue and creative thinking. The respondents said that female board members challenged male-dominated perceptions and initiated new ideas, creating a conducive environment for innovation.
The study further showed that privately-held companies with women on their boards spend more on research and development as a percentage of annual sales than companies with all male boards.
Yet, despite such positive impacts women hold only 14 per cent of all board seats in Egypt, the study showed.
Egyptian businesswomen continue to face hurdles in rising through corporate ranks, it said, with women often working in administrative job functions such as human resources and accounting that do not come with key revenue-generating or operational responsibilities.
As a result, they are not always able to develop the range of skills and expertise needed to win managerial promotions and compete for board directorships, the study said.
Highlighting the obstacles for Egyptian women in gaining access to board positions, the respondents noted that Egyptian women were subject to societal expectations about women's roles from an early age. Popular culture reinforces the stereotypes of women as homemakers and men as leaders, the respondents said.
“Such gender stratification feeds on itself, contributing to a lack of self-confidence among women and a hesitation to pursue career tracks leading to executive-level responsibilities,” the study said.
It also leads to negative perceptions about women's skills and capabilities for performance and career dedication, influencing men's and women's views alike, it added.
Women often lack the necessary encouragement and empowerment for pursuing highly demanding careers. As a result, the pipeline of qualified women for board positions is relatively small, according to study participants.
Women in Egypt have taken great strides in recent years, and today they represent nearly half of the country's college graduates. However, only 23 per cent of women participate in the labour force, and very few reach the upper echelons of the corporate world.
In order to rectify the situation, the study puts forward recommendations including improving overall corporate governance and transparency, with a particular focus on board dynamics and functioning as well as more extensive public disclosure of non-financial information such as the gender composition of the workforce in senior management in corporations.
It calls for educating children equally and supporting efforts to reduce the high school dropout rate among girls, particularly in poor communities. It also calls for empowering future female leaders through training, mentoring, sponsoring, and the company and sector-wide implementation of gender diversity initiatives.
The study recommends raising overall public awareness about women's capabilities and the business case for gender-diverse boards.
Other recommendations include creating and building networks of female leaders that can connect women in senior business leadership positions with less-experienced women. Engaging with male leaders to gain their support and public advocacy for a better gender balance throughout the workforce, in management, and on boards would also be desirable, the report said.

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