Gender Parity in the Board of Directors

 

 

By Ananta Prashad Chakraborthy

Gender equality denotes equal rights, responsibilities, and opportunities of men and women. Equality does not imply that men and women will become the same, but rather that men and women’s rights, duties, and opportunities will not be determined by whether they are born as male or female. Gender equality entails taking into account both women’s and men’s interests, needs, goals, while also acknowledging the variety of diverse groups of women and men. Equality between men and women is viewed as a human rights problem as well as a prerequisite for an indication of long-term people-centered development according to United Nation.

As per Articles 28 and 29 of the Constitution of the People’s Republic of Bangladesh, there is no discrimination on the basis of gender from the part of the state in terms of employment and equal opportunities. However, yet having these non-discriminatory clauses, the number of women representation in the boards of directors is stuck at 18%.

According to Dr. Therese Huston, women and men both have different characteristics in respect of taking business decisions. Men are more risk-hungry and women are risk-alert that means men usually take bold decisions in a business and women are more alert about risk and consequences. This shows the importance of having both genders in the top level of the company because it is necessary to have bold decisions for launching new products, being in the competition with the changing world and business market, and faster decisions help achieving success. Additionally, Gender equality may boost economic productivity, improve next-generation development results, and make institutions and policies more representatives according to International Monetary Fund.

Surprisingly enough, despite having a low participation of women comparing to men in the boards of directors, the Parent law for Companies namely Companies Act, 1994 having 411 total sections, did not incorporate a single provision for mandatory appointment of women in the boards even after the recent amendment in 2020, whereas, India at least 1%, The UK 40%, Norway 40% made mandatory appointment of women in the boards by their concerned laws.

As per a survey of annual reports for 2018, among 294 businesses registered on the Dhaka Stock Exchange, 499 director posts were occupied by women. This equates to 17.37% of the total number of directors. Out of 294 publicly traded businesses, 80 had no female directors on their boards. The proportion of women directors on boards varies by industry, with the IT sector having the most at 24% and the cement sector having the lowest at 8%. The results demonstrate that the average percentage of female directors is greater than 10% in most businesses, with the exception of the cement, fuel, and power sectors. Women make about 25% of the workforce in the telecommunications industry. Ironically, despite having the highest proportion of female directors on business boards in the IT industry, no company in this sector nominated a female independent director. Furthermore, no women were appointed as independent directors by companies in the Cement, Jute, Paper & Printing, Service & Real Estate, Tannery, and Travel & Leisure industries. Women’s presence in the RMG sector was once around 80% before Covid-19, but it is now dropped to 41.7 to 58.3% (RMG Bangladesh). Out of 27 directors in the board of directors of BGMEA, only 3 are women (BGMEA). That shows a very poor representation.

To improve gender diversity in the boards a few things need to be changed like incorporating a provision of “compulsory women representation” in the boards of directors. Moreover, providing computer based knowledge, teaching of writing better job descriptions and encouraging entrepreneurship could increase their leadership skills. In addition, providing fair salary to women would also encourage them for better work and more participation.

According to Amnesty International, women currently earn roughly 77% of what men earn for the same work worldwide. In the language of Amnesty International, it is termed as “Gender Pay Gap”. If all these things mentioned above and their safety and security can be maintained, Bangladesh would be in the top and rule South Asia in terms of Gender Parity in the boards of directors in near future.

Ananta Prashad Chakraborthy, student of LLB program, Department of Law and Human Rights, University of Asia Pacific.

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