CBN directive: Women occupy only 22% boards’ seats in 21 banks

Four years after the Central Bank of Nigeria (CBN) directed that women occupy 40 per cent of top management positions, and 30 per cent board positions across banks from 2014, only 22.3 per cent of women have attained that, Daily Trust reports.   An analysis based on data obtained from the websites of 21 banks in […]

Four years after the Central Bank of Nigeria (CBN) directed that women occupy 40 per cent of top management positions, and 30 per cent board positions across banks from 2014, only 22.3 per cent of women have attained that, Daily Trust reports. 

 An analysis based on data obtained from the websites of 21 banks in the financial sector shows that women constitute only 22.3 per cent of the total board appointments in Nigerian banks, while their counterparts make up 77.7 per cent since 2014. Among the 238 board members, 185 are men while 53 are women, the analysis reveals.

 Then CBN governor, Sanusi Lamido Sanusi, at a women empowerment conference held in Lagos on December 12, 2013 had said:  “The CBN has taken action to break the glass ceiling that continues to block female talents from reaching the top by issuing a circular that by 2014, 40 per cent of banks’ top management and 30 per cent of board directors should be women.”

 He said the banks that promote these principles get funds from Development Finance Institutions (DFIs) as incentives to promote gender equality in banks.

 The CBN boss said Norway was the first to enact a quota of 40 per cent women on boards, and women now hold 35 per cent of board positions. 

Similarly, the European Commission has proposed a 40 per cent quota for the whole EU region. The United Kingdom recommended a 25 per cent target by 2015.

He, however, added that inasmuch as the banks and CBN wanted these targets to be achieved, merit and competence would never be sacrificed. “I am a very strong believer in diversity, be it gender, ethnic or religious, but I believe it can never be achieved by sacrificing merit and competence. We want women, but we need qualified women,” Sanusi, now Emir of Kano, had said.

 But a recent study of the boards and management of 20 commercial banks, including Providus and Sun Trust (two of the recently approved banks), with the exception of Citi Bank Nigeria, revealed that they have 200 board members, with 48 women only, and 152 men.

 Three of the banks – First Bank, Access Bank and Guarantee Trust Bank – have women as their chairpersons. This figure translates to 15 per cent as against the 85 per cent held by men.

 The statistics further reveals that only two of the 20 banks, Standard Chartered Bank and Unity Bank Plc, currently have women as managing directors, translating into 10 per cent for women and 90 per cent for men.

 Another interesting perspective revealed by the study indicates that, out of the total of 46 women directors, only 21, representing 45.6 per cent are executive directors. The other 25, representing 54.3 per cent, are either non-executive directors or independent directors.

 Emerging from one of the biggest mergers ever witnessed in the banking space anywhere in the world, Unity Bank has an eight-man board with equal number of men and women.

The board also has an interesting blend of two executive directors and two non-executive directors, with a woman as managing director.

 A 2008 study by Professors Renée Adams of the European Corporate Governance Institute and Daniel Ferreira of the London School of Economics found that women tend to have better attendance records at board meetings than their male counterparts.

“In fact, the more women on the board, the more men’s attendance record improves,” says Richard Leblanc, associate professor of corporate governance at York University.

 The study also found that females are more likely than men to sit on audit, governance and nominating committees (monitoring committees). 

“Gender-diverse boards allocate more time and effort to monitoring, and diverse boards are more likely to hold CEOs accountable for poor stock-drive performance,” Leblanc notes. Such an atmosphere of accountability will undoubtedly change the decisions the board makes.

 A breakdown of the data obtained by our reporter shows that Diamond Bank has 10 board members out of which four are women; Ecobank board comprises eight members with just two women; and First Bank has 15 board members with only three women representing 20 per cent.

 Fidelity Bank, which is among the top 10 banks, has a 14-member board consisting of three women and 11 men; Access Bank also has a 15-member board with five women representing 33.3 per cent. Stanbic IBTC Bank has an eight-member board with no woman. However, at its sister firm, Stanbic IBTC Holdings, there are three women in the nine-member board.

 Union Bank has a 16-member board with four of them women; United Bank for Africa (UBA) has 19 members out of which only three are women; Guarantee Trust Bank (GTB) has a 13-member board with only three members being women, representing 23.1 per cent.

 Skye Bank has an eight-member board with no woman on it; First City Monument Bank (FCMB) has a 12-member board with four women. Wema Bank has 12 board members with only four women, translating into 33.3 per cent.

 The data analysis further showed that Standard Chartered Bank, Nigeria has a nine-member board, which includes four women, translating to 44.5 per cent. At Sterling Bank, four women are on the 14-member board while three women are on the 11-member board of Heritage Bank.

 Zenith Bank Plc has an 11-member board of directors but with only one woman on it; Keystone Bank board has a seven-member board including only one woman. 

Jaiz Bank, the only licensed Islamic bank in Nigeria, has an 11-member board with no woman. There is only one woman on the seven-member of board of Providus Bank while Sun Trust Bank has two women on its nine-member board.

 The National President of the National Association of Nigerian Traders (NANTS) , Mr Ken Ukaoha, who spoke on the issue recently, said while there may not be a clear correlation between the number of female directors on a company’s board and the firm’s profitability, companies with higher number of female directors in other climes have shown that they realized long-term management and communications benefits.

 Ukaoha said: “Empowering women is not only the right thing to do, it is the smartest thing to do because it will boost productivity, generate higher returns on investment and promote greater organizational effectiveness.”

But some experts do not believe in quota system to solve banking problems. “I don’t believe quotas solve the problem,” said Maggie Wilderotter, Chairman of Frontier Communications.

 She said, “What companies must do instead, is help increase the number of women in the operational roles that are so attractive to board nominating committees. We don’t have enough women in operating positions, and affording women that opportunity in the pipeline is critical.”