In December 2012 the Government of the UAE made it compulsory for "companies and government entities" to appoint women on to their boards of directors. Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, made the announcement tweeting his ambition for women to have "a strong presence in decision-making positions in our institutions".
This declaration demonstrates the significance the UAE cabinet places on this issue, and not without merit. Indeed, in the UAE, our businesswomen are already being credited for their achievements. The latest Arabian Business poll of the 100 most powerful Arab women, awarded one quarter of the places to Emirati women.
Anecdotal evidence points towards women improving the overall dynamic of a board of directors by bringing increased emotional intelligence to debates and decision-making; greater levels of preparation for board meetings; and a deeper emphasis on making a truly valuable contribution to the organisation. However, at the heart of the issue is the need to recognise the value of supporting diversity and inclusion within our teams throughout the region by implementing flexible working options and HR policies conducive to this diversity.
There have been several studies on the correlation between mixed-gender boards and company performance, and many find strongly positive results. Studies have shown that diverse groups of directors tend to make more prudent decisions and in the Financial Review, David Carter, Betty Simkins and Gary Simpson found a correlation between enterprise value and diversity on the board.
In addition, a study of Fortune 500 companies by Catalyst found that from the perspective of return on invested capital, that companies with the highest proportion of female board directors outperformed those with the least by 66 per cent. Credit Suisse Research Institute also found that over the past six years, companies with at least one woman on the board would have outperformed stocks of companies with no women in those positions by 26 per cent.
In the UAE, according to a report by Al Masah Capital, women own or run about 30 per cent of small and medium-sized enterprises (SMEs). The Arab Women Leadership Outlook suggests that one in every eight firms in the Middle East and North Africa region is female-owned and more than 30 per cent of women entrepreneurs in the region owned large firms employing more than 250 workers.
Last year, the Pearl Initiative interviewed representatives from more than 100 family-owned firms in the GCC and found that 32 per cent had mixed-gender boards. This contrasts with women holding only 1.5 per cent of board positions in listed companies across the GCC. However, while having a representative and diverse board is important, it is vital that board members are appointed based on appropriate merit and speci¿c skill sets rather than simply as a result of their gender or for regulatory box-ticking. This is where creating a formal corporate governance structure comes into play; implementing these frameworks helps businesses achieve a more ef¿cient and streamlined corporate structure, one that both men and women can be proud to be a part of.
Companies often lose high-performing women at mid-management levels as they leave to have children, feeling that they cannot combine work commitments with family commitments. This does not have to be the case. Organisations in the region that manage to successfully retain and promote women do so by providing strong HR collaborative support at pivotal points in their careers, creating structured mentoring programmes, and developing networking opportunities.
Therefore, to make a real stride towards equal opportunity in the workplace, a more flexible approach to working needs to be adopted to ensure that the numbers of women in leadership positions grow, rather than decline. For example, more companies and organisations should consider offering part-time or flexible working hours to allow mothers to work around their family commitments. The law in this area was updated in 2011 with the introduction of the region's first part-time work permit as announced by the Ministry of Labour, but this is not yet a widely used system and many are not aware this option is open to them. According to a recent study by the Federal Authority for Government Human Resources of 7,876 working women, there is a growing need for better HR practices that benefit working women in the UAE, since 72 per cent of those surveyed said they would prefer the option of part-time employment to enable them to dedicate time to their children.
An increased female presence in the boardroom along with suitable policies in the workplace, hand-in-hand with the clear message from the leadership of the UAE in support of these goals, will undoubtedly create many more role models for our future generation of young women leaders.
As our father the late president of the UAE, Sheikh Zayed, said: "Nothing could delight me more than to see the woman taking up her distinctive position in society. Nothing should hinder her progress. Like men, women deserve the right to occupy high positions according to their capabilities and qualifications." It is our duty to honour this ambition.
Badr Jafar is the founder of The Pearl Initiative and the managing director of the UAE's Crescent Group