Gender Diversity in Ghanaian Boardrooms An Abridged Report on Women on Boards of Corporate and Public Institutions in Ghana © 2018 International Finance Corporation. All rights reserved. 2121 Pennsylvania Avenue, NW Washington, DC 20433 USA Internet: www.ifc.org The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. IFC encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly, and when the reproduction is for educational and non-commercial purposes, without a fee, subject to such attributions and notices as we may reasonably require. 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Additionally, “International Finance Corporation” and “IFC” are registered trademarks of IFC and are protected under international law. Disclaimers The study was limited to Ghana, which means that the specific demographic culture would have a major, but nonmeasurable, effect on the answers of participants. Therefore, there may be findings that are not relevant to companies in different countries. The study was further limited to companies in Accra, which may reduce the diversity of responses and possibly provide results not relevant to all the companies in the country. Group photo on the cover: Launching the research work in Accra in October 2016 with panelists (seated, from left) Pearl Esuah-Mensah, Adlaide Benneh, Joshua Abor, Florence Hope-Wudu, and Chinyere Almona. Gender Diversity in Ghanaian Boardrooms An Abridged Report on Women on Boards of Corporate and Public Institutions in Ghana Contents Foreword ................................................................................................................................ v Acknowledgments................................................................................................................... v Executive Summary............................................................................................................ 1 1. Background and Context for the Study................................................................. 3 1.1. Global Trends in Gender Diversity........................................................................................ 3 1.2. State of Regulatory and Legal Framework on Gender Diversity in Ghana.......................... 4 1.3 Purpose of the Study............................................................................................................ 4 1.4. Significant Previous Studies .............................................................................................. 5 1.5. Research Methodology ...................................................................................................... 5 2. Findings and Discussions........................................................................................... 7 2.1. Sampled Firms.....................................................................................................................7 2.2 The Nature of Boards and Gender Diversity in Ghanaian Boardrooms.................................7 2.3 Exploring Gender Dynamics within the Corporate Setting................................................. 8 3. Challenges, Prospects, and Experiences of Women on Boards................ 11 4. Conclusions and Policy Recommendations...................................................... 13 4.1. Conclusions....................................................................................................................... 13 4.2. Policy Recommendations................................................................................................. 14 References ......................................................................................................................... 17 All photos in this report are by Tricolor Studios. | The table and all figures are from Field Data, 2017. Gender Diversity in Ghanaian Boardrooms iii Foreword Boards, that are diverse in experience, skills, gender, Women on Boards is a bold attempt to dispassion- age, and qualifications, have a positive effect on the ately situate the discussion on the extent to which quality of governance, and such boards often pre­ gender is and should be a factor in board composi- sent a good indication of a well-run company. The tion. An absolutely refreshing, intellectually stimu- conversation on diversity focuses mostly on gender lating, and poignantly instructive piece of work. because of the positive impact that gender parity Daniel Ogbarmey-Tetteh, has been found to have on performance. Director General, Securities and Exchanges Commission At IFC, we have found that addressing gender parity and increasing participa- tion of women on corporate boards and This is an informative study that brings to the fore- in other decision-making positions adds front the need for adequate inclusion of qualified value socially and economically and has the females in Ghanaian corporate governance. Gender capacity to play a significant role in institu- diversity in the membership of boards and senior tional capacity building and private sector management of institutions could improve decision Ronke-Amoni development. Therefore, a few years ago, making. Despite the challenges that women face in Ogunsulire we took a hard look at the boards of our the corporate world, they have enormous respon- investee companies and made the decision sibilities in all aspects of the development of the to promote gender diversity and inclusion on these nation. boards. Currently, women make up 29 percent Ekow-Afedzi, of the directors who sit on IFC investee company Deputy Managing Director, boards around the world—up from only 11 percent Ghana Stock Exchange in 2011, and heading toward a goal of 40 percent by 2019. This report on Women on Boards in Ghana will contribute to the global advocacy for gender diver- sity and inclusion, especially within the country, as it provides real data on Ghana. The results of the survey show that, while most companies of the private and public sectors have female represen- tation, the ratio of women to men is still low. The most common challenges women face, according to this report, relate directly to family responsibil- ities. These data provide statistics to advocate for more female inclusion in leadership and the need Research team members, media, and women advocates gather to to address the issue at the policy, regulatory, and mark the launch of the Women on Boards research in Accra in corporate levels. October 2016. Ronke-Amoni Ogunsulire, Acknowledgments IFC Country Manager, Accra, Ghana This study was an Initiative of the Ghana Corpo- rate Governance Program of IFC, a member of the A number of factors may account for the failure or World Bank Group, in partnership with the Swiss success of many companies, but arguably, corporate Secretariat for Economic Affairs (SECO) and con- governance practices may top the charts. Funda- ducted by the University of Ghana Business School. mental to corporate governance is the selection and We would like to recognize the special role of the composition of boards. How much weight must be National Insurance Commission and the Security given to gender among the many qualifying consid- and Exchanges Commission for their support in the erations when composing a board? data-collection process. Gender Diversity in Ghanaian Boardrooms v Executive Summary This publication provides a baseline exploration into gender diversity in the Ghanaian boardroom. It examines gender diversity—across sectors, ownership types, legal status, listing status, and a number of organizational and board-level charac- teristics—to provide empirical evidence to guide the development of organizational and national policy. The study, launched in Accra in October 2016, mainly focused on generating a balanced and objective analysis of the issues surrounding women in the boardroom to ascertain the business case for having females on boards in Ghana. The objectives of the study were to examine the nature of gender Joyce Aryee, with other members of the research team, announces a successful launch of the Women on Boards research. diversity in public and private sector boards in Ghana, examine the determinants of board diversity in Ghanaian organizations, examine the relation- research methodology used for this study. ship between gender diversity and organizational The second section presents and discusses the performance in Ghana, and to explore the experi- study’s findings, including a look at the firms sam- ences of women on boards. pled. It examines the nature of boards and gender The first section of this report provides context diversity in Ghanaian boardrooms and explores and background for the study, beginning with a gender dynamics within the corporate setting. summary of global trends in gender diversity and, The final two sections consider the implications more specifically, an overview of the regulatory of the study’s findings, particularly the challenges, and legal framework on gender diversity in Ghana. prospects, and experiences of women on boards, It also states the purpose of the study and cites followed by a presentation of conclusions and significant previous studies. And it describes the policy recommendations. “This study provides very interesting insights into the involvement of women on boards of corporate and public organizations in Ghana. The findings should serve as a good basis for intensifying advocacy for the inclusion and participation of more women on Ghanaian boards. This study will serve as a useful resource for government, regulatory authorities, corporate and public institutions, researchers, and students.” — Joshua Yindenaba Abor, Dean, University of Ghana Business School Gender Diversity in Ghanaian Boardrooms 1 1. Background and Context for the Study The establishment of appropriate corporate gov- Jackson 2009). In Sub-Saharan Africa and in Latin ernance principles directly influences firm perform­ America and the Caribbean, one out of every twen- ance and sustainability, and consequently improves ty-six women makes it to a senior management economic development. However, most boards lack position, whereas one out of every six to nine men balance when it comes to female representation. in the workforce makes it to a senior management Generally, educated women are mostly consigned to position (Jackson 2009). and clustered at the lower and supervisory manage- ment levels of employment. This situation is even “Over the last two decades, women’s worse in Africa, owing to cultural and traditional lives have improved in an unprecedented beliefs. Nevertheless, underusing the skills of highly way. Women gained access to rights, qualified women leads to loss of economic growth education, services and the labor potential (European Commission 2012). market. However, many women all over Gender diversity benefits boards in several ways. the world still do not enjoy equal For one, women can contribute special skills and participation in economic, social, and expertise that complement those of men when political life. deliberating on issues and making decisions that affect the progress of the company (Deloitte 2015). “Not only is this unjust, it is also a Also, gender balance improves the effectiveness of tremendous economic and social loss. the board across its three main roles: monitoring, Equal opportunities for women and strategic direction, and the relational function. men is one of the key concerns of Board gender diversity also sends important signals Switzerland’s development coopera- to long-term, risk-averse corporate stakehold- tion. For SECO, gender equality is a ers—signals based on certain aspects of female key development issue for inclusive leadership style, such as being more conscientious growth. It is not only the right thing in performing tasks, more risk-averse in investing their own assets as well as in investing on behalf of to do, it is also the smart thing to do.” others, and more other-oriented. — Matthias Feldmann, Deputy Head of Mission and 1.1. Global Trends in Gender Diversity Head of Cooperation, Embassy of Switzerland in Ghana On average, Fortune 500 companies have more women on their boards of directors, which has translated into better financial performance than Recent studies have focused on whether the effect companies with fewer than three women board on performance of companies that have women on directors (Jackson 2009). This suggests a degree of boards serves to justify implementation of board- correlation between the presence of women lead- room gender policies. Several theories—such as ers and corporate performance. Globally, women the organizational demography, the resource-based constitute a small percentage in senior management theory of competitive advantage, tokenism theory, positions as compared with their male counter- and agency theory—have been used to explain the parts. The percentage of women in senior positions relationship between board gender diversity and ranges from 3 percent to 12 percent, and the per- corporate performance and thus how the propor- centage of men in senior management positions is tion of males and females influences the nature of relatively stable across regions (Ganguli et al. 2014; social interaction (Pfeffer 1983). Gender Diversity in Ghanaian Boardrooms 3 1. Background and Context for The Study Testing of the different propositions made by these theories has produced mixed results, as reported in a growing body of empirical literature on gender diversity and firm performance. Some studies have provided evidence suggesting a positive relationship between gender diversity and firm performance (Christiansen 2016; Ganguli et al. 2014; Jackson 2009). Yet other researchers have shown a nega- tive relationship between gender diversity and firm performance (Boulouta 2013; Hammad et al. 2012; Rodriguez-Dominguez et al. 2012). However, some others found no relationship between the two vari- ables (Webber and Donahue 2001). Panelists Adelaide Benneh, Pearl Esuah-Mensah, and Joshua Abor Female representation on corporate boards is participate in a session. greatly influenced by political, social, and economic structures in their home countries (Terjesen and stance, Article 17 of the 1992 constitution prohibits Singh 2008). Over the last two decades, various discrimination on the basis of gender. Accordingly, aspects of board diversity have been studied to the Affirmative Action Policy of 1998 requires a ascertain the effect of culture and ethnicity on or- 40 percent quota of women’s representation on ganizational performance, but the results have not all government and public boards. Also, creation yet been contextualized within the economic and of the Ministry of Gender, Children and Social socio-politico-cultural setting. Once that occurs, we Protection in 2013 has been a key step forward in may have a profound revelation regarding board Ghana’s commitment to promote gender equity. gender diversity. The presence of women in corporate and public In 2015, the Ghanaian government developed a leadership in Africa is limited, even though the National Gender Policy to reemphasize its objective male-to-female ratio is 1:1 (World Development to support gender equality. These policy commit- Indicators 2016). But the interesting question to ments move the country toward women’s empow- address is whether gender diversity on boards, erment and livelihood, women’s right and access especially those that make use of women’s skills to justice, women’s leadership, and accountable and expertise, is beneficial and pivotal to business governance, among others. However, the National growth in Africa. While some African countries, Gender Policy does not specifically indicate the de- such as Kenya, Malawi, Nigeria, and South Africa, gree of gender diversity that corporate and public are spearheading the agenda on formally integrat- boards and management should attain. Besides, ing gender diversity into principles of good govern­ some corporate organizations have their own poli- ance, policy debate in Ghana is still ongoing. cy on gender representation regarding management and board composition. 1.2. State of Regulatory and Legal Framework on Gender Diversity in 1.3. Purpose of the Study Ghana Considering the background, the study sought to Over the last two decades, the importance of provide some concrete information on women on gender diversity in the socioeconomic transforma- corporate and public boards in Ghana under IFC’s tion of Ghana has received much attention. Hence Ghana Corporate Governance Program. The study attempts have been made to incorporate this into was to raise awareness of and inform the discourse the laws of the country as well as to provide frame- about gender diversity. A second contribution is the works for addressing gender inequalities. For in- possibility of providing a source for tailored policy 4 Gender Diversity in Ghanaian Boardrooms 1. Background and Context for The Study actions and business practices. Thus the study no IWDs decreased across the five years of study. was intended to generate the relevant follow-up This may be due to external pressure created by discussions needed for Ghana to establish policies stakeholders. Also, the number of companies with regarding gender diversity in the boardroom. one IWD is increasing over the period of the study, The following were specific objectives of the study: while the number of companies with two or three or more directors is more or less the same. The • To examine the nature of gender diversity in number of two- or three-IWD companies remaining public and private sector boards in Ghana; the same could arguably be due to lack of availabil- • To examine the determinants of board diversity ity of independent directors who are women. in Ghanaian organizations; 1.5. Research Methodology • To examine the relationship between gender This study applied a mixed-methods approach, diversity and organizational performance in adopting both qualitative and quantitative data col- Ghana; lection and using both open-ended and closed-ended • To explore the experiences of women on boards. questionnaires. Information solicited from each or- ganization included its age, size, ownership type, and 1.4. Significant Previous Studies legal and listing status, among others. We distributed Hammad et al. (2012) investigated the relationship 310 questionnaires to companies across all the between gender diversity and firm performance sectors of the economy, and of those we received in Pakistan. That study focused on the impact of 162 completed questionnaires. State-owned enter- female directors on corporate performance, using a prises (SOEs) were 11.39 percent of the sample. sample of 395 listed nonfinancial companies of the Karachi Stock Exchange from 2004 to 2009. The We also collected data from online secondary sources findings indicated that the ratio of female directors (mainly on the financials and board structure of is negatively related to firm performance. The chal- the listed companies in the sample) to augment the lenge with this study is that it did not cross-assess data from the survey. We used descriptive statis- the various industries in the economy and thus may tics, charts, and graphs to describe and explore the not apply in some industries. nature of gender diversity in Ghanaian firms. (See Figure 1.1 on the next page.) Correspondingly, the Sanan (2016) investigated the impact of board study used cross-tabulations to examine cross-cut- gender diversity on financial performance of listed ting between various variables and gender diversity. Indian firms in a dynamic modeling framework. Using a firm-year unit of analysis, Sanan studied a Interviews with 15 female board members pro- sample of 148 publicly listed firms across multiple vided a deeper understanding of the females on industries over a period of five financial years. Us- the board. These women happened to be from ing panel data analysis, the study took the percent- the banking, media, and hospitability industries. age of women directors as the independent variable We also interviewed four male directors to gain and measured firm performance by return on assets an understanding of male perspectives on gender (ROA) and Tobin’s Q as the dependent variables. diversity. In addition, the final stages of the study The primary results of the study, using ordinary included a focus-group discussion with five fe- least squares and fixed-effects estimation models, male board members, followed by another group point toward a positive and significant relationship discussion with three female and six male board between the percentage of independent women members. This more heterogeneous group provided directors (IWDs) and firm performance. However, an opportunity for a more diverse discussion. The results are reversed when the theoretically superior purpose of these focus-groups was to triangulate Arellano Bond estimation was used. Findings of the and augment some of the hard findings from the study indicated that the number of companies with quantitative data analytics Gender Diversity in Ghanaian Boardrooms 5 1. Background and Context for The Study Figure 1.1: Dynamics of Ghanaian Boards Women executive directors Women non-executive directors Boards with at least one sub-committee Boards without sub-committees Female representation on boards with no policies Boards with no gender policies 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80% 90% 6 Gender Diversity in Ghanaian Boardrooms 2. Findings and Discussions The 162 questionnaires retrieved spanned multi- ple sectors within the Ghanaian economy. 2.1. Sampled Firms The investment banking/asset management industry constituted about 29.63 percent of the sample. Insurance, banking, and media consti- tuted 14.20 percent, 11.73 percent, and 11.73 percent, respectively. Manufacturing organiza- tions constituted 8.64 percent, and pensions and regulatory bodies constituted 3.7 percent each. Construction, oil and gas, and SOEs followed, A session of the audience at the Women on Boards launch. at 3.09 percent, 2.47 percent, and 2.47 percent. Agribusiness, health, mining, microfinance, nongovernmental organizations, and IT/telecom- 2.2 The Nature of Boards and Gender Diversity in Ghanaian Boardrooms munications organizations followed, with 1.85 Findings from the study indicated that board percent, 1.85 percent, 1.85 percent, 1.23 percent, size ranged from two to fourteen members, but 0.89 percent, and 0.62 percent of the sample, the majority (81.24 percent) of firms had four to respectively. (See Figure 2.1.) nine board members. The most common board Regarding ownership, 56.33 percent were private size was four members (18.35 percent), followed domestic organizations, 11.39 percent were by five (16.46 percent). Board sizes of two to five state-owned companies, and public and foreign members accounted for 38.6 percent of the sam- organizations (organizations with predominantly ple, and those with six to nine members accounted foreign ownership) accounted for 20.89 percent for 43.68 percent. Available literature has yet to and 9.49 percent of the sample, respectively. Ap- reach a consensus on optimal board size, and what proximately 1.79 percent could not be immedi- constitutes a large or small board is still in conten- ately classified under any of the categories. tion. However, the appropriate board size should Figure 2.1: Sectoral Distribution of Sample Gender Diversity in Ghanaian Boardrooms 7 2. Findings and Discussions have enough members with expertise to diligently Regarding ownership type, SOEs exhibited the discharge the organization’s responsibilities. highest level of diversity, with a gender diversity The question of executive and non-executive ratio of 58.9 percent. Foreign companies, public members has also been extensively studied. Some companies, and private companies followed with arguments promote the presence of executive diversity ratios of 14.3 percent, 12.2 percent, and members on the board, because they have in-depth 11.1 percent. (See Figure 2.3.) organizational information that can facilitate better 2.3 Exploring Gender Dynamics within decision making. The contrary argument is that the the Corporate Setting presence of significant executive management on In seeking to understand the nature of gender diver- the board detracts from the objective and super- sity in Ghana, the study explored the prevalence of visory function of the board and consequently gender policies among organizations. Gender policy results in poor organization performance. Hence simply refers to an established public policy for the best-practice position has been to have more organizations for assessing the different implications non-executive members on the board. Across all for women and men of any planned policy action, the sectors sampled, about 42.3 percent of the including legislation and programs, in all areas and organizations have boards with at least 60 percent levels, with the aim of improving gender balance. non-executive directors. Even though the ideal is for organizations to have The findings also revealed that board committees gender diversity, a majority (77.85 percent) of firms help the board execute its mandate, which enhances surveyed did not have policies on gender. Only 5.70 the governance within the organization. From the percent of organizations had policies on gender, survey, the most frequently occurring board com- and 16.46 percent did not respond. Notwithstand- mittees were finance, audit, risk, and compliance, ing the absence of policies, 72.15 percent of the followed by nominations, remuneration and human boards had female representation, even though resources, and technical. Some organizations (14.85 the ratio of females to males remained low, with percent) operated without board committees; diversity typically ranging from 20.00 percent to others (approximately 81 percent) operate with 30.00 percent. two to six board committees. Very few committees Furthermore, only 6.33 percent had minimum were chaired by women. The findings revealed that, thresholds for women on their boards, 75.95 per- when women are on board committees, they tend cent did not have minimum thresholds, and 17.72 to chair the human resources and remuneration percent failed to provide valid responses. Only committees and the audit and risk committees. about 4.43 percent have a standard for female (See Figure 2.2.) representation. (See Table 2.1.) Figure 2.2: Committees Chaired by Women Figure 2.3: Gender Diversity by Ownership Type Finance, Audit and Risk Human Resources and Remuneration Private Public State Owned Foreign Other 8 Gender Diversity in Ghanaian Boardrooms 2. Findings and Discussions Table 2.1: Gender Policy Codes Description Percentage Gender Policy for Organization Yes 5.70 No 77.85 No response 16.46 Minimum women on board Yes 6.33 No 75.95 No response 17.72 Minimum women in top management Yes 4.43 No 77.85 No response 17.72 As noted above, results indicated that 77.85 per- with the most common number of women on cent of organizations responding did not have a boards being one. The findings further revealed that policy on gender representation to guide selection 24.05 percent of the sampled boards are composed of top management and board positions. Yet 72.15 of only males. Thus one out of every four boards percent of boards surveyed responded that they do has no female representation. Also, most women on have female representation on their boards. How- boards (49.37 percent) were non-executive direc- ever, the results showed that approximately 86.00 tors, and only 6.49 percent of organizations have percent of organizations have no more than two females as board chairs. (See Figure 2.4.) females on their boards. Further survey results on the issue of gender diver- Gender diversity (proportion of female to total sity revealed that smaller firms were more likely to board members) generally ranged from 7 percent have higher gender diversity compared with larger to 25 percent. The number of women on boards firms. In addition, younger firms were more likely ranged from one to six among the sampled firms, to have high gender diversity compared with older Figure 2.4: Results on Board Dynamics Gender Diversity in Ghanaian Boardrooms 9 2. Findings and Discussions board chair positions tend to have more women on their boards. More independent boards tend to have less gender diversity. Businesses with female CEOs tend to have more females on their boards than businesses with male CEOs. Businesses with female board chairs tend to have more females on their boards compared with businesses with male board chairs. Overall, the findings suggest that there is a busi- ness case for having women on boards, because the cross-tabulations reveal that companies that A session of the audience at the Women on Boards launch. perform better tend to have more gender-balanced firms. Nongovernmental organizations and micro­ boards. High-performing firms, based on return on finance firms appeared to have higher gender di- assets (ROA), were associated with higher gender versity than other organizations. Further, it appears diversity than low-performing firms. However, that organizations in the financial services industry low-performing firms, based on return on (banking and pensions), with the exception of the equity (ROE), exhibited higher gender diversity microfinance and the asset management industries, than high-performing firms, but the difference have low gender diversity. Unlisted firms exhibited was not significant. In addition, a majority of the higher gender diversity compared with listed firms. high-performing firms exhibited gender diversity. SOEs had higher gender diversity compared with In sales growth, high-performing firms were associ- other ownership types. Foreign firms did not score ated with higher gender diversity than low- highly on gender diversity. Family-owned busi­ performing firms. (See Figure 2.5.) These find- nesses showed higher gender diversity compared ings provide support for the value-in-diversity or with non-family businesses. decision-making perspective that suggests a positive Additional findings suggest that smaller boards relationship between gender diversity and firm have higher gender diversity than larger boards. performance, taking into consideration the various Organizations that do not combine CEO and factors that enhance decision making. Figure 2.5: Gender Diversity and Performance 10 Gender Diversity in Ghanaian Boardrooms 3. Challenges, Prospects, and Experiences of Women on Boards From the standpoint of the experiences and per- to be represented on the board, because having spectives of gender diversity on board performance, female CEOs provides role models and paceset- the study supports the assertion that gender diversi- ters that younger females can look up to. Further, ty influences board performance through different female CEOs and board chairs were more likely to leadership styles (Druskat 1994; Gipson et al. seek out female directors when the need to appoint 2017). Women generally tend to be more “emotion- new directors arose. ally intelligent”—to discern feelings—as compared In addition, the study sought to explore the contri- with men, who possess the attributes that trigger butions of women on boards. Female directors are adventure and lead to a higher propensity to take seen to be understanding, cooperative, and cautious risks. Notwithstanding this, many boards in Africa and to have integrity. Where they have expertise are dominated by males because of gender nuances and qualifications, they make meaningful contri- that are firmly embedded in the African culture. butions at the board level. In the interviews with Indeed, the patriarchal nature of the African the 15 women on boards, we found that women traditional customs—as well as laws—seems to be enjoyed working on boards with men who respect the underlying factor of male dominance in top their views. Interestingly, according to 80 percent of positions. Respondents’ assertion on board compo- the female respondents, they are usually nominated sition indicated that men constitute more than 90 for international assignments because of the respect percent of the membership on most boards. Hence given to them by their male colleagues. corporate bodies have a long way to go toward Some respondents suggested that women were achieving gender balance on their boards. better trainers and also better at risk management The study also examined the nature of gender issues. They also observed that women were more diversity on boards. The major considerations in cautious when it came to taking decisions, which appointing members to the boards were found to helped balance the aggressive tendencies of men. be competence, experience, connection with stake- These respondents also said that women were bet- holders (“whom you know”), and qualifications. ter negotiators and more persuasive. Given all these Among these factors, qualifications was considered attributes of women on boards, it is not surprising the most preferable. However, study results showed that most women serve on finance, audit, and risk that the progression of women to boards in organ­ committees. Another important finding was that izations was influenced—more than for their male most women on boards were older and did not counterparts—by the perception of their potential have the responsibility of taking care of children. to deliver satisfactory work when they serve on Although they are few, the women on the boards boards. This reflects experiences and expectations feel proud of their performance and hence would about the abilities and skills needed to operate want to see more women represented on boards. successfully on boards. Generally, findings show that women who serve Organizations with female CEOs tended to have on boards were satisfied or happy with the board more females on their boards compared with those experience. Though there is male dominance on with male CEOs. In addition, organizations with boards, these women do not experience discrimi- female board chairs tended to have more females nation. Indeed, most of these board members are on their boards compared with those with male older people and therefore show maturity when board chairs. The interviews also revealed that, dealing with their colleagues. when the CEO is a woman, more women are likely Gender Diversity in Ghanaian Boardrooms 11 3. Challenges, Prospects, and Experiences of Women on Boards Nonetheless, women are faced with many chal- Some women, although qualified to be on boards, lenges on boards of organizations in Ghana. The deliberately shy away. This could be because some majority (about 80 percent) of the respondents said women do not want to be in the spotlight in the that board activities affect their family responsibili- midst of males, as the Ghanaian cultural tends to ties. Another challenge was the lack of recognition, tag assertive women as disrespectful. Also, from which stems from male dominance on boards— our interviews with male board members we sometimes, the male counterparts want their learned that women appointed to boards tended to thoughts to overshadow those of the women. In stereotype their female counterparts as having male the light of this, some women sometimes feel their behavioral traits, which discourages more females views are not as respected as those of the men, and from accepting board positions. the men are sometimes overbearing. 12 Gender Diversity in Ghanaian Boardrooms 4. Conclusions and Policy Recommendations “Gender diversity through the participation of females on boards is well recognized in the theory and practice of corporate governance, and this is seen to contribute to improved organizational performance. Women tend to have different experiences and unique perspectives that could be brought to bear in boardroom deliberations to enhance effective board governance. The discussion regarding board gender diversity needs to move beyond the notion of just having female representation on the board, to asking the question, what is the propor- tion of women on the board? The inclusion of more women in achieving a balanced board should be an important consideration in determining board structure and composition.” —Joshua Yindenaba Abor This study sought to examine various issues asso- 4.1. Conclusions ciated with female representation on Ghana’s The majority of the organizations in the sample corporate and public boards. Specifically, it sought were private domestic, unlisted, and limited-liabil- to examine the factors that affect board gender ity companies. We found that board size for most diversity as well as to identify the link between companies was neither too large nor too small, with board gender diversity and organizational the majority having six to nine members on their perform­ ance. The study also allowed women on boards. For most of the organizations, fewer than boards to share their experiences and sought the half of the board members were executive directors. opinions of male directors regarding women on Regarding gender diversity and firm-level charac- boards. teristics, although we found that a vast number of To achieve these objectives, the study used ques- organizations did not have a policy on gender and a tionnaires to survey 162 organizations in Ghana threshold for the number of women to be included for the years 2014 and 2015. These organizations on their top management teams and board, most represented different sectors and varied in age, still had female representation on the board. Typ- size, ownership type, legal and listing status, and ically, however, the board had only one woman. so on. Apart from the data obtained from the This suggests that Ghanaian boards are most likely questionnaires, the study conducted interviews missing out on the rich experience a diverse board with 15 female board members to gain insights can provide. about their experiences serving on boards. The Another interesting finding from this study was that, study team also interviewed four male directors, in organizations where women were represented on inviting them to discuss their thoughts on gender the boards, most of these women were likely to be diversity. The study complemented the survey non-executives and were not likely to play lead- with secondary data, mainly for the listed compa- ership roles on the boards. That is, they were less nies. To affirm the findings and to obtain further likely to be board chairs or chairs of board commit- insights on the ones we found difficult to explain, tees. Most of the women served on more technical we conducted a focus-group discussion that in- committees, such as the finance, audit and risk, and cluded both male and female board members. human resources and remuneration committees. Organizations with female CEOs tended to have Gender Diversity in Ghanaian Boardrooms 13 4. Conclusions and Policy Recommendations more women on their boards than those with male because males dominate boards, their opinions as CEOs, and organizations with female board chairs women were sometimes not considered. The findings tended to have more women on their boards than obtained from interviewing the males suggested that those with male board chairs. From the interviews women appointed to boards were stereotyped by we learned that the reason more women are likely to their female counterparts as having male behavioral be represented on the board when the CEO or board traits, which discourages more females from accept- chair is a woman is because female CEOs and chairs ing board positions. provide role models and pacesetters that younger Regarding whether there is a business case for females can look up to. Further, female CEOs and having women on corporate boards, our findings board chairs were more likely to seek out female di- showed that organizations that perform better rectors when the need to appoint new directors arose. tend to have more gender-balanced boards. These Looking at how women get onto boards, we found findings provide support for the value-in-diversity that competence, links with stakeholders, experi- or decision-making perspective. High-performing ence, and qualifications were the main consider- firms (based on ROA) were associated with higher ations. Examining issues relating to gender diversity gender diversity compared with low-performing and different groups of firms, we found that smaller, firms. Comparatively, low-performing firms (based younger, welfare-oriented, unlisted organizations on ROE) exhibited higher gender diversity than and SOEs tended to have more females on their high-performing firms; however, the difference boards compared with larger, older, commercial, and was not significant. In addition, a majority of the foreign firms. high-performing firms exhibited gender diversity. In In the interviews with the 15 women on boards, we sales growth, high-performing firms were associated found that women enjoyed working on boards if with higher gender diversity compared with low-per- their views were respected. They described wom- forming firms. en on boards as understanding, cooperative, and 4.2. Policy Recommendations cautious and as having integrity. According to them, Our findings provide useful pointers for regulators, where women had expertise and qualifications, they policymakers, and companies. Appointing female made meaningful contributions in the boardroom. CEOs and board chairs can go a long way toward Some respondents suggested that women were better improving the presence of females on boards, trainers and also better at risk management issues. because it provides role models and pacesetters that They also said that women were more cautious younger females can look up to. The findings suggest when it came to taking decisions, which helped bal- that it makes economic sense for businesses to seek ance the aggressive tendencies of men when taking out female directors, because businesses that have decisions. Further, these respondents indicated that a more gender-diverse board tend to have higher women were better negotiators and also more per- performance. In this regard, organizations should suasive. Given all these attributes of women shared aim to develop gender policies for top-management by women on boards, it is not surprising that most and board-level positions that ensure a good balance women serve on finance, audit, and risk committees. between males and females. Another important finding was that most women on The following are specific recommendations result- boards were older and did not have to take care of ing from the findings of the study: children. • The Institute of Directors should consider Interestingly, most of the respondents reported that establishing a pool of talented directors (male they faced little or no discrimination. Sharing their and female) who have the requisite skills to serve challenges as women on boards, most of them said on corporate and public boards in Ghana. that boardroom responsibilities conflicted with their family responsibilities. They also argued that, 14 Gender Diversity in Ghanaian Boardrooms 4. Conclusions and Policy Recommendations • The Institute also needs to intensify training of women to prepare them to take up board appointments. • Women who are serving and have served on boards can play a key role in mentoring the next generation of women who will serve as leaders in business. • It is important for policy advocacy to create more opportunities for females to serve on boards. • The Securities and Exchanges Commission and the Ghana Stock Exchange should provide a relevant framework for companies to comply IFC Regional Corporate Governance Program Manager Chinyere with generally accepted principles of corporate Almona (left) exchanges pleasantries with Daniel Lauchenauer of SECO and IFC Corporate Governance Consultant Florence governance. The findings from this research sug- Hope-Wudu at the study launch. gests that nonlisted companies are doing better in having a gender-balanced board. It would be • It is important to engage with male directors re- useful to develop a system that rates companies garding the benefits of gender-balanced boards. based on their corporate governance practices. This would make it easier for men to be part of • The establishment of family-friendly policies, any future solutions. such as the provision of childcare facilities onsite • Policymakers, regulators, and organizations or offsite, could encourage women to serve should think about developing policies that en- on corporate boards. This has been proven to courage young women to serve on boards. Wom- increase women’s productivity. en who want to attain board positions should • It is important to implement “returnship” consider pursuing relevant qualifications, gaining policies to make it easier for women who have experience, and establishing great networks. stepped off the career track (for reasons such as having a child) to return to work. Gender Diversity in Ghanaian Boardrooms 15 4. Conclusions and Policy Recommendations “According to Peter Sands, ‘Women who are economically empowered are an incredibly powerful source of development.’ “Studies have shown that diverse boards function as well as, if not better than, boards that lack gender diversity, yet the pace of women joining boards remains slow. With the global acknowledgment of the role and value of women on boards, the business case for empowering women is clear. Essentially, it benefits future generations, it enhances corporate brand reputation, it improves the rela- tionship between companies and stakeholders, and it is a key driver of economic growth. What is the status of Women on Boards in Ghana? It is important to the ongoing dialogue to explore the state of affairs regarding women’s involvement at the decision-making tables. “IFC is committed to encouraging conversations and actions that empower women to fully participate in leadership at the corporate level and in the wider socio­ political terrain, through the Ghana Corporate Governance Program, funded by the State Secretariat for Economic Affairs (SECO), Switzerland. This study is an effort to provide baseline data on the status of women on boards in Ghana, which is required to inform policies to promote better representation. This is a way to facilitate robust dialogue among all stakeholders at the national and regional levels. “We are optimistic that this study will contribute to the body of knowledge on the subject and increase understanding of the current business practices with recommendations for action.” —Chinyere Almona, Regional Program Manager Africa Corporate Governance Program 16 Gender Diversity in Ghanaian Boardrooms References Adams, R. B. 2016. Women on boards: The superheroes of and performance. The Journal of Applied Behavioral tomorrow? The Leadership Quarterly 27 (3): 371–86. Science 53 (1): 32–65. Adams, R. B., J. Haan, S. Terjesen, and H. Ees. 2015. Hammad, H. M., S. Mahmood, S. Andleeb, and F. Board diversity: Moving the field forward. Corporate Ramzan. 2012. Gender diversity and firm performance: Governance: An International Review 23 (2): 77–82. Evidence from Pakistan. Journal of Social and Development Science 3 (5): 161–66. Amidu, M., and J. Abor. 2006. 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The initiative spans socioeconomic strata with more than 2,000 businesses worldwide, we and includes firms, investors, market intermediaries, use our capital, expertise, and influence to create and regulators. The focus is on enhancing the regu- opportunity where it’s needed most. Our long-term latory infrastructure and building the corporate gov- investments in developing countries help the private ernance capacity of institutions, with the expectation sector play an essential role in the global effort to of increased awareness, knowledge, and capacity to end extreme poverty and boost shared prosperity. In adopt good governance practices. promoting sustainable private sector investment in developing countries, IFC has identified a need for Contacts for information about the emphasis on improved corporate governance prac- content of this publication: tices. For more information, visit www.ifc.org. Roman Zyla Corporate Governance Lead (Africa) About SECO IFC Environment, Social, and Governance SECO is Switzerland’s competence center for all core Department issues relating to economic policy. SECO’s economic 14 Fricker Road, Illovo development cooperation strives to achieve sustain- Johannesburg, South Africa able growth. Growth is sustainable if it creates jobs, rzyla@ifc.org helps increase productivity, and helps reduce poverty, inequalities, and global risks. For more information, Chinyere Peace Almona visit www.seco-cooperation.ch. Regional Program Manager Africa Corporate Governance Program IFC Environment, Social, and Governance About the Africa Corporate Department Governance Program 7th Floor, Alliance Place, The Africa Corporate Governance Program, funded 33A Alfred Rewane Way, Ikoyi by SECO, is an initiative to promote corporate Lagos, Nigeria govern­ance best practices and standards continent­ calmona@ifc.org wide, in line with regional priorities. IFC works 18 Gender Diversity in Ghanaian Boardrooms 2121 Pennsylvania Avenue, NW Washington, DC 20433 USA Tel: +1 (202) 458-8097 www.ifc.org/corporategovernance www. ifc.org/sustainability May 2018