The GCC Gender Board Index, published for the first time in April 2024, was created to enable those professionals interested in gender diversity (which ranges from ESG analysts to academic researchers) to have a reliable source of data that would be updated every year. The inaugural data set shows that in the financial sector across the Gulf Cooperation Council (GCC) countries, there are 265 firms with a total of 2,041 board positions. Women occupy 121 positions within this landscape, constituting 5.9% of the total.
What does this tell us? The incidence of women serving on the boards in the financial sector (5.9%) is marginally higher than the percentage of women on boards across the GCC (5.3%). But that’s not the story here–the really compelling narrative is that the financial sector accounts for over 40% of the women board directors. Why is that?
Spotlight on finance
Financial services firms develop and promote more women than other sectors for a variety of reasons. First, this is a large sector representing a major part of the capitalisation of the whole market. Looking at the Dubai Financial Market as an example, as of last October, the financial sector accounts for 41% of the whole market. So perhaps we should not be surprised that they are generating so many women directors.
Regulatory pressure is another factor. The industry is highly regulated across the GCC–and indeed across the world–and is under a lot of scrutiny. It is also closely watched by international investors, who will want to put their money into organisations with high ESG scores; one of the first constituencies to write and thank us for generating the Gender Board Index were professionals working in the ESG sector, who have long needed reliable information from which to make their recommendations and investment decisions. The board chairpersons are aware of this and appoint accordingly.
The development and support of talent is another contributing factor. Women form half of the talent pool, and banks and insurance companies have historically been good at talent planning. They often have structured talent management programmes (e.g. graduate training schemes) and leadership development programmes. Women thrive in this environment and can demonstrate their ability, increasing their chances of getting to the top.
Women in financial services companies are likely to be well-qualified. Over the last few decades, women in the GCC countries have entered higher education in increasing numbers and gone on to a wide range of professional qualifications, including in law, accounting and compliance, and integral skills for financial services, leading to a robust pipeline of qualified candidates for board positions. Both the women on the board of the Abu Dhabi Commercial Bank, for instance, are Chartered Financial Analysts.
UAE paves the way
Legislation is another reason that women are joining boards, not just in the financial services sector. The UAE led the way in the GCC countries by introducing, through the Securities and Committees Authority, in March 2021, a requirement for all listed companies to have at least one woman on the board and, if not, to explain why. As a result, while the percentage of women directors across the GCC is, as mentioned earlier, 5.3%, the UAE has 11%, and the financial services sector is a key part of that. There are now 95 listed financial services companies in the UAE, across the two exchanges in Abu Dhabi and Dubai, including 23 banks and 32 insurance companies. They account for 56 of the 121 women serving on the boards of financial services companies in the GCC, a full 46%.
Legislation clearly works!
