A Look at the 2017 Board Diversity and Inclusion Report
In an ever-changing world, homogenous and close-minded living and thinking is a quick route to irrelevance. This is more so the case when it comes to business. Across the world, there has been a push to increase diversity when it comes to representation whether in politics, entertainment or business.
The Board of Directors is a strategic organ in every business as it plays a critical role in the strategy and oversight of an organization. Global reasearch has revealed that there is a positive correlation between diversity in boards and business performance. To this end, it is important to research the diversity and inclusion of boards. Kenya has done this through the Board Diversity and Inclusion Report, the brainchild of KIM (The Kenya Institute of Management) in partnership with NSE (Nairobi Securities Exchange), New Faces New Voices (Graca Machel Trust – Kenya Chapter) and Barclays Bank Kenya.
This is the second such report, with the first one dubbed Bringing the Other Half to the Boardroom: Case Study of State Corporations and Listed Companies in Kenya, published in 2012. The research sought to establish gender representation in private and public sector organizations, revealing that women made up 20% of boards in state corporations and 12% of boards in publicly listed companies, with only one company having a woman chairperson in publicly listed firms.
The 2017 report is a follow up and expands the scope beyond gender as diversity is not just about gender but includes other parameters such as age, profession, nationality and education background mong others. Diversity means having different groups represented so as to have varied voices and ideas, and inclusion means valuing those voices and giving room to those ideas. The 2017 report focused on the 52 publicly listed companies and was able to get data from 44 out of the 52 companies (about 84%).
There has been an improvement of 3% of women representation on boards, up from 18% in 2015 to 21% in 2017. In 2012, this figure stood at 12%. When it comes to board chairpersons, women make up only 7.7%, which is quite low but surprisingly Kenya is leading the world with this number. In senior management, women representation was a quarter, with 4 out of the 44 organizations without a single woman in senior management.
When it comes to age diversity, the average age of board members is 56, which is a little lower than the global average which stands at 61. Women are getting appointed a little younger at 48, with men being appointed at 52. On education, 93% had a higher education qualification, with women tending to be more educated than men. Professional diversity was limited with majority of boards made up of lawyers and accountants.
There has been progress in board diversity and inclusion, but a lot still needs to be done. The research shows that diversity affects the financial performance of an organization and is something that not only publicly listed companies should consider, but all organizations. I have high hopes that the next report will show a marked improvement in board inclusivity and diversity and the benefits that it brings to a fledgling economy like Kenya’s.http://www.mwendengao.com/2017/07/20/a-look-at-the-2017-board-diversity-and-inclusion-report/LifestyleBarclays,board diversity,Board Diversity and Inclusion Report,Graca Machel Trust,inclusion,Kenya,Kenya Institute of Management,Nairobi Securities Exchange