Why 30% Club encourages equality in corporate world

On February 17, 2021, the Nairobi Securities Exchange (NSE) joined the 30 per cent Club, a scheme to ensure that women occupy at least 30 per cent of senior positions in major companies. It was the second bourse in Africa to do so after the South African one. The move by the NSE comes in the wake of a 2019 study by Equileap, which revealed that women constitute a minority in the 62 companies listed in the national bourse.

Founded in the United Kingdom in 2020 by Helena Morrisey, the 30 per cent Club believes that “gender balance on boards and in senior management …encourages better leadership and governance … and ultimately increased corporate performance”.

To create pressure for compliance, the Club votes against “re-election of the chair of the board or nomination committee, particularly where there continues to be no evidence of board diversity”. It also publicly commends companies where there is progress. The Club categorically states that it does not believe in mandatory quotas but prefers voluntary ones that would yield organic and sustainable change.

Boardroom dynamics

By why 30 per cent? The Club states that this target was aspirational at its launch in 2010 because the proportion of women in most boards was then only 12 per cent. This target is anchored on the common norm that “30 per cent represents a critical mass from which point minority groups can impact boardroom dynamics”.

The idea of a critical mass is adopted from a study by Rosabeth Moss Kanter of the male-dominated Industrial Supply Corporation in the United States of America in the 1970s. Derived from nuclear physics, the critical mass idea is that addition of uranium to an existing assemblage leads to the likelihood of an atomic explosion.

After a certain limit, addition of extra uranium causes a bigger effect than that of the original quantity. In the human context, this means that when a minority reaches a certain numerical strength, its influence on the culture of an institution becomes significant.

The 30 per cent threshold is based on four group types outlined in Kanter’s Critical Mass Theory. The first are uniform groups in which there is only one demographic category, either men or women.

The second are skewed groups in which one type is a dominant majority, such as 85per cent, and the other is an inconsequential minority. The third are tilted groups where the minority has a numerical significance, such as 35 per cent, which enables it to influence group culture.

Over-ride male domination

The last are balanced groups in which neither has absolute control. The critical mass is based on tilted groups and the theory’s postulate on numbers and similarity in identity. In this regard, the theory posits that a shift in women’s absolute numbers enables them to over-ride male domination.

One major misunderstanding of the theory is that it prescribes 30 per cent as the proportion that will automatically make a minority influential. The theory makes no such claim but only speculates that such a proportion gives the minority numerical gravitas. In fact, a careful reading of the theory reveals that it actually recommends 50 per cent based on the balanced groups where none has numerical advantage over the other. It puts the groups at 60per cent to 40 per cent, which works out to an average of 50 per cent.

Unfortunately, entities seeking to sanitise themselves and display a semblance of gender parity often jump at the 30 per cent proportion for women. In fact, there seems to be a universal interpretation that the 30 per cent for women is a ceiling rather than a minimum.

Critical mass

This is a tactical distortion of the theory and a resistance mechanism to keep women a minority while paying lip service to the concept of critical mass. Proponents of gender parity should not accept this minimisation but demand 50 per cent inclusion.

The critical mass is also misinterpreted to be an end in itself – merely numerical increase in the number of women without commensurate change in the institutional environment to enable them assert influence.

Another misconception is that the critical mass should only apply at the leadership level. This is noticeable from the Club’s idea that the companies are only aiming at having more women in boards. Without women in the lower cadres, the concept is doomed because there is no reservoir from which they will be mentored and recruited into the higher positions.

Only aiming for the top also leads to what Kanter calls “loneliness among peers” because women remain a conspicuous minority. As the NSE applies the principles of the 30 per cent Club, it should do so pro-actively and avoid satisfaction with 30 per cent inclusion. After all, the number of women and men in Kenya is approximately the same.

The writer is an international gender and development consultant and scholar. [email protected]