A recent report by PwC shows that South Africa’s mining sector has the best level of female representation on boards.
“Research shows that there is a strong correlation between financial performance and the participation of women on boards,” says Gerald Seegers, PwC Director for Human Resources Services, Southern Africa.
There are currently 21.05% women sitting on the boards of South Africa’s top 100 listed mining companies.
The survey was carried out by PwC in the UK in conjunction with sponsors Anglo American, Rio Tinto and Lathan & Watkins. The purpose of the study was to widen the already well discussed debate about the lack of representation of women on boards in the mining industry.
The top 500 globally listed mining companies were surveyed for this report. Together these companies have a market capitalisation comprising 97% of the global industry, or $1.05 trillion of the sector.
This data will be used to track, measure and analyse changes to trends in female development and retention in the mining industry over the next three years.
The second report, to be issued in 2014, will update the data contained in this study, and examine more closely views from those working in the industry on the rewards and obstacles that are faced by employees and employers relating to gender diversity.
While the findings are not unexpected – the mining industry has the lowest number of women on boards of any sector in the world – they are nonetheless interesting and expose a number of jurisdictions for not addressing the issue
Collectively women occupy eight per cent of all board seats in the top 100 mining companies, with only four female executive directors in this group. The top 101 – 500 mining companies, collectively, have a lower proportion of women on their boards, at less than four per cent. However, this group has a greater proportion of women in executive board positions at nearly three per cent compared to 1% for the boards of the top 100 mining companies.
Only 16 of the top 100 mining companies and less than eight per cent of the top 101 – 500 mining companies have more than one female director. “In technical industries that are usually dominated by men (such as mining, oil and gas, aerospace and construction) the challenge of finding women who have considerable industry experience is not to be underestimated,” says Seegers.
The percentage of women on boards is significantly higher in those mining companies that are listed in South Africa on the JSE and, to some extent, in Australia on the ASX. South Africa and, more recently, Australia have introduced policies regarding gender equality that apply to companies that are incorporated in, operate in and/or are publicly traded in these jurisdictions.
In South Africa there are a number of laws, rules and regulations that encourage or require that companies ensure and accelerate the sustainable participation of women in the economy. For example, as part of the country’s Broad-Based Black Economic Empowerment (B-BBEE) Codes of Good Practice, qualifying small South African enterprises and all medium to large enterprises are encouraged to have greater representation of their board and senior management positions held by persons who are previously disadvantaged. There are also several programmes that are aimed at supporting or increasing the level of female ownership of companies. For instance, the Gender and Women Empowerment Unit (which aims to support women-owned enterprises), and the Mining Charter, which aims to transfer 26% of the ownership of the mining industry to previously disadvantaged individuals (which includes women) by 2014.
Similarly, in Australia the ASX Corporate Governance Council Principles and Recommendations were re-issued to include recommendations on gender equality.
Across the top 500 mining companies, the survey found that for every two women directors there are three women in executive management (the level immediately below the board). This indicates that there are women who are gaining experience that may lead them to a place on the board. The research shows that while there is a low percentage of women in executive positions, there is a solid pipeline of female talent at the executive management level.
South African-listed mining companies tend to have a relatively robust pipeline of female talent at the executive management level when compared with mining companies listed on other exchanges. “The higher percentage of women in executive management positions may be due, in part, to South Africa’s general gender diversity policies,” comments Seegers. On the other hand, London-listed companies have the lowest proportion of female representation in executive management positions.
The report suggests there could be a number of reasons for the difference between the higher age proportion of women in executive management positions as compared with those in board positions: it may reflect a long lead time for women to progress to directorships; or may show the willingness of mining companies to appoint women but only up to a certain level. It may also reflect the fact that historically women were not encouraged into mining and therefore there are very few women of board age (50 – 65) currently in the mining industry. The next generation (women aged 40 – 50) are just reaching the executive level now.
In addition, some mining companies may be required to adhere to gender diversity policies, depending on which stock exchange they are listed on. This varies from legislation in South Africa to a lack of guidelines in Hong Kong. The new Companies Act in South Africa was updated in 2008 in response to the King III Report which highlights the importance of diversity among the board. Since this was introduced there has been an increase in female board members. However, it should be borne in mind that the South African legislation does not include a quota system as has been implemented by other countries such as Norway, adds Seegers.
The mining industry is currently facing serious challenges in both recruitment and cost inflation. There are a number of strategies in order to change the status quo, including government-led and business-led initiatives. Some of these include the introduction of legislation to encourage gender diversity; the implementation of diversity policies in organisations; and board evaluation in order to identify areas of strengths and weaknesses.
Seegers concludes: “The mining industry needs to identify and address the issues that prevent or restrict the development of women in the sector to reach senior management and board positions.
“Making use of a wider talent pool to tackle these problems could lead to better outcomes for both the industry and the individuals involved. In this context, encouraging recruitment and career development across the gender line is essential.”