Corporate Directorship and Gender Neutrality: A myth?

Corporate Directorship and Gender Neutrality: A myth?

In July 2016, Snowy Khoza was appointed as executive chair of Bigen Africa Group and on the day on which she took office, it is reported that 70% of her male colleagues resigned. Khoza later remarked “They had never been led by a woman, and a black woman for that matter”.[1] It is evident that gender plays a pivotal role in board composition and dynamics as women only account for 20.7% of the JSE Listed Companies directorships according to statistics published in July 2019.

South Africa’s political and economic history is characterized by social inequities which affected and continue to affect women and African people who were on the periphery of society. These social inequities in the form of exclusions can be described as some of the initial conditions which affected the participation and representation of women in corporate boards.

At the dawn of the new democratic dispensation, a wave of policies and legislation were enacted to directly and indirectly remedy these initial conditions and achieve more diversified board compositions.

The Companies Act 71 of 2008 is the primary regulator of companies in South Africa. The Act encompasses a myriad of objectives which are mainly directed at the simplicity and flexibility of companies as legal entities, it has a “minimalist focused ethos”. Section 66 and 68 of the Act which deals with the appointment and election of directors respectively, features no gender differentiations or preferences. From the face of it, the Act is or promotes gender neutrality in all boards.

There is no single piece of legislation which was enacted to redress the paucity of women directors and to bolster diversified boards. Commendable efforts have been made in the codes of good Corporate Governance. This is essential as board composition is directly linked to those codes.

One such example would be the Broad-Based Black Economic Empowerment Act 53 of 2003, which serves a legitimate purpose of deracializing the landscape, it does so however, to the exclusion of other groups such as non-black women. Additionally, only companies who are reliant on state concessions such as obtaining mining and or prospecting licenses are incentivized to consider women in corporate boards. This is evidenced by Impala Platinum Holdings having a 38.5% female directorship and Kumba Iron Ore with 36.4% on the 31st December 2013.

In 1996, South Africa passed legislation for the reservation of a third of board seats for women in state owned companies. In 2006, Canada Quebec, passed a law that 50% of board seats in state-owned companies have to be reserved for women.  Both legislative measures have proven effective in the increment of women leadership and the emergence of highly skilled women in business.

In December 2003, Norway legislated a 40% quota of women directors in the midst of fears that it would not have the talent pool to meet the demand.[2] In South Africa, there are no legislated gender diversity quotas or targets for corporate boards. The King IV Report on Corporate Governance for South Africa contains voluntary targets for gender diversity at board level. This is an example of South Africa adopting international best practice within the scope of local conditions.

There have been calls to revisit the 2013 Women Empowerment and Gender Equality Bill, which called for 50% representation of women on corporate boards. The bill was proposed due to a lack of what could be classified as robust legislation to effectively promote the inclusion of women. However, great caution should be taken not to compromise the efficiency of boards in a vigorous attempt to promote inclusion of women.

The election and appointment of corporate directors is therefore not gender neutral in light of South Africa’s political, economic and legislative framework. It is recommended that collaborative efforts across the private sector including institutional investors as one of the largest drivers of social change to design a staggered framework which ensures that the existing talent pool is able to effectively meet the demands of any proposed legislative quotas or targets.

[1]              Https:// Accessed on 15/01/2021.

[2]              Where are the women: Inclusive Boardrooms in Africa’s top listed companies? African Development Bank. Published May 2015. Page 6.

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Authored by: Vuiswa Mbali LLB (UFS), LLM (UFS) (Cum Laude). Candidate Attorney at Ramolao Ramotsehoa Inc. She is a mentee in the mentorship programme developed by Mrs
Anastasia Machobane of Mashobane Advisory and Machobane AM Attorneys Inc.
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