BY VICTOR ADAR
Board cultures, especially during the 1990’s was too much for the ladies. Recently, however, most companies have believed that they were safer by expanding the role and participation of women at both the board and management level. The argument is that if there is professional mix, which encompasses age diversity, gender balance, technical skills and related experience, a company will perform better.
Standard Chartered Bank is one financial institution thriving on what has been for a long time a secret plot known only by a few firms, emerging the overall winner in the Nairobi Securities Exchange’s board diversity award for this year. The bank was ranked as the most improved company in board gender diversity between the years 2014 to 2016 as per New Faces New Voices – NFNV – advocates for women’s access to finance and financial services, and Nairobi Securities Exchange (NSE) award thanks to the fact that they have done well in promoting diversity at the senior management level in 2016, garnering 60 points out of a possible 100.
Dubbed “New Faces New Voices Board Diversity Awards 2017,” it is an initiative of NFNV, a Pan-Africa network established by Graca Machel to expand the role and participation of women in the financial sector. Now in its second edition, the Award recognizes companies that have demonstrated an improvement in the priority diversity attributes.
Liberty Kenya Insurance came a close second with 47 points while Uchumi Supermarket, Total and Bamburi Cement all tied in 3rd place on 35 points in the assessment conducted by New Faces New Voices (NFNV) and Nairobi Securities Exchange (NSE). The assessment included data from the Kenya Institute of Management 2017 Board Diversity Report as well as research by NFNV.
Including Standard Chartered which witnessed a marked improvement in its diversity standing due to its diversity at the management level, listed companies such as Total, Liberty Kenya Insurance, and Safaricom were noted for having well constituted leadership teams. In terms of gender diversity, Barclays, Eveready, Uchumi and BAT had boards that reached the 50% gender balance in 2016. Across the 52 listed companies that were analyzed, 12 companies had a representation of 33% of women on their boards.
Nairobi Securities Exchange, Kenya Institute of Management and Barclays are just but a few examples of firms which have been promoting diversity in the boardrooms trying to bridge the gap by not only advancing the financial inclusion of women by bringing more of them into the formal financial system but also promoting more women in leadership within the financial services sector.
The NFNV Kenya chapter chair Andia Chakava says that embracing diversity requires a willingness to challenge the status quo and deliberately seek people who think differently from one another. “An inclusive and diverse agenda has moved from ‘nice-to-have’ to a critical business strategy component,” she says, adding that advancing boards and management diversity needs leaders with commitment and accountability to undertake data-driven approach to create and grow a more inclusive workforce.
To enhance the disclosure process, NFNV recommends that the NSE and Capital Markets Authority (CMA) should consider automating board composition disclosures by establishing an online portal where listed companies can update their board and management information.
Nuru Mugambi, who is not only the NFNV founding trustee and analyst on board diversity but also a director at Kenya Bankers Association, says that there are numerous ways to enhance board diversity. “Full disclosure is an important one,” she says. “From our initial research in 2014, we are pleased that more companies are disclosing the full names, age, profession and gender of their board members. We need to encourage all boards of listed entities to follow this best practice. It is also important to have greater transparency of when board positions are opening up or when directors are retiring, as this will help the potential candidates know which firms to target for opportunities.”
According to Geoffrey Odundo, who is the CEO of NSE, the corporate objective of maximizing shareholder value requires not only greater competitive performance, but also attention to a variety of governance issues, including board diversity. It is such a smart move, so it seems, to put up a more diverse board and management if you are to reach higher heights.
“It is on this premise that the Exchange in partnership with New Faces New Voices, conceptualized, the NSE Leadership and Diversity Dialogue Series in 2015. The forums put together for board directors and senior executives of listed companies, kicked off conversations around the importance of diversity in our businesses and we are very pleased that our engagements are beginning to bear fruit,” says Odundo.
The NFNV and NSE top 10 most diverse boards in Kenya:
1 Uchumi Supermarkets
2 BAT Kenya
3 Barclays
4 Eveready East Africa
5 Liberty Kenya Insurance
6 Bamburi Cement
7 B O C Kenya
8 Total Kenya
9 Longhorn Publishers
10 StandardChartered
11 Safaricom