Chronicle EditorZimCode Secretariat—
Chapter 3 of the ZimCode addresses the Board of Directors and Directors, and section (94) highlights that “Every Board should consider whether its size, diversity and demographics make it effective.“Diversity relates to academic qualifications, technical expertise, relevant industry knowledge, experience, nationality, age, race and gender”. Section (126) indicates that, “The appointment of the chief executive officer must be based on merit, skill, leadership qualities, and experience without losing sight of the need to promote gender equality”.
The ZimCode encourages gender balance in the board and executive appointments so as to have a diversity of views that are crucial in decision making.
Good corporate decision-making requires the ability to hear and consider different points of view, which comes from people who have different backgrounds, experiences, and perspectives. Therefore gender equality in corporates is not just a matter of “silencing” gender advocates but should be embraced as an effective way of realising the value of diversity.
The myth that there are not enough women with sufficient qualifications for board service has long been dismissed as several researches found an abundance of talent among women.
Board composition and structure has to be considered before the corporate makes its appointments.
The board size and composition is determined by the nature of the business as well as other situations peculiar to that company.
The makeup of corporate boards of directors should be representative of the company in which it governs i.e. shareholders, employees, and customers.
When taking into account the important qualifications such as skill and technical expertise, gender equality should not be overlooked.
Having a board comprising of people with various backgrounds and genders has its advantages.
It brings the value of diversity of thought and experience. It is believed that diversity of thought results in better decision making.
Having women in boards and executive positions brings different perspectives to the issues facing the company with higher chances of finding a better solution to them as compared to monolithic boards that are destined to foster monolithic thinking. Monolithic thinking often leads to missed opportunities, unresolved issues and potentially unworkable solutions.
Another valid explanation for why companies might benefit from having more women directors is that women can be more risk averse in decision making.
This line of reasoning would posit that companies with stronger female leadership could enjoy performance benefit derived from better risk management.
Some experts such as Wilson (2009) concluded that having just one woman on board cuts the risk of bankruptcy by 20 percent. Boards with more women surpass all-male boards in their attention to audit and risk oversight and control.
When Fortune-500 companies were ranked by the number of women directors on their boards, those in the highest quartile in 2009 reported a 42 percent greater return on sales and a 53 percent higher return on equity than the rest.
Women directors effectively address the concerns of customers, employees, shareholders, and the local community, and also tend to focus on long-term priorities. Women directors are likely to be more in tune with women’s needs than men, which helps develop successful products and services.
In general women influence 70 percent of purchase decisions and are likely to understand consumer trends which can be helpful to the company. Therefore advancing women to positions of leadership is actually being smart in business.
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