Breaking the Boardroom Glass Ceiling: Gender Equity and Corporate Governance in Africa.

Jonah Godswill Ekwere, Guest Blogger, University of Uyo, Nigeria.

Walking into most African boardrooms today, it is clear that they are male dominated. In Nigeria, women hold roughly 29.4% of board assets as of 2023, a modest increase from 24.8% in 2020. Similarly, in South Africa, women occupy approximately 19.1% of board positions, and this percentage has remained unchanged over the past five years. Despite decades of reforms, these numbers highlight a persistent gender gap in corporate leadership.

This underrepresentation has implications for economic governance. A study examining publicly traded companies in Nigeria found a significant positive correlation between gender diversity on boards and financial performance. Specifically, a 20% increase in female board representation corresponds to a 4% increase in Return on Assets.  Elaborately, boards risk diverse perspectives, which leads to stagnation, while women continue to face barriers to corporate governance. The question lies not in the qualification of women generally but whether boardrooms are ready to embrace them.

The Reality Check

Despite the growing awareness of gender equity, African boardrooms are overwhelmingly dominated by men. In Nigeria, for instance, women held roughly 29.3% which signals a marginal increase from 24.8% in 2020. In South Africa, the percentage of women on boards is roughly 19.1% showing almost no improvement in five years.  According to the National Gender and Equality Commission of Kenya, women now occupy 36% of board seats, and this is one of the highest in Africa.

The reasons for this are multifaceted, as gender roles and cultural norms continue to hinder women from aspiring to leadership in corporate governance. Recruitment practices mostly favor male candidates and networks that lead to board selection equally follow the same path. A survey by McKinsey& Company indicates that women are promoted at a rate lower than men and this translates into recommendations for top positions in corporate governance. Mega corporations further depict such disparity among genders. For instance, female representation in BUA foods has declined by 100 percent, indicating that the company has no female board members, while Union Bank’s representation declined by 44 percent to 14 percent. Without profound change, African boardrooms risk stagnation due to underrepresentation.

The Cost Of Exclusion

When women are excluded from boardrooms, companies pay the highest price in both quality of governance and financial performance. An empirical study of publicly traded firms in Nigeria found that an increase in female representation is associated with a corresponding improvement in financial outcomes. A twenty percent rise in women on boards produces a four percent increase in Return on Assets.

Furthermore, a gender diverse leadership has been shown to strengthen even governance. A West African analysis reveals that women in executive roles, especially at the CEO level, also have a higher performance indication. According to the African Development Bank, closing gender gaps in agriculture could lift Africa’s GDP by over nineteen percent. Also, it has been estimated in McKinsey Power of Parity that advancing women’s equality across the continent could further improve Africa’s GDP by ten percent. The cost of exclusion is relatively high, and if Africa continues to exclude women, it excludes half of its talents, resources and is willing to sacrifice billions in economic gains.

The Gap Between Law And Reality

Despite many African countries having ratified positive legal frameworks, such as the Maputo Protocol, which has been ratified by forty-four out of fifty-five African Union Member States, a distinction remains between law and lived experience. For instance, Nigeria’s Companies and Allied Matters Act (CAMA 2020) introduces improved board independence and chairman roles but is entirely silent on gender diversity, allowing boardrooms to be dominated by men. In South Africa, legal frameworks like the Employment Equity Act exist but women only occupy thirty-six percent of board seats in JSE-listed companies, thus depicting a disconnection between law and practice.

The Way Forward

The future of Africa’s corporate system depends on transforming corporate laws into effective corporate practice. More stringent methods should be implemented to ensure compliance with these laws in the corporate world. Corporate leaders must view corporate governance not as an opportunity for women only,  but as a potent strategy to boost development and increase productivity in Africa.