Alarm as 62 NSE-listed firms have only four female CEOs


Kenyans are busy hounding the public sector because it does not have enough women in leadership positions, but the situation is much the same in the private sector, reveals an investigation by Nation Newsplex.

Only four in 62, or a meagre six percent, of chief executive officers or managing directors of companies listed on the Nairobi Securities Exchange are women. And only three, or five percent, of these firms have women as chair of their boards of directors, shows data compiled by Newsplex from the companies’ latest annual and financial reports.

The overall representation of women in boards and senior executive posts is also tipped in favour of men. One in four (23 percent) members of boards of directors is a woman, translating to about 126 of the 550 members in the 62 companies.

In seven of the companies surveyed, including four in the agricultural sector, there was no woman on the board of directors

Of the businesses that reported on the composition of their senior management, slightly more than a quarter are women, compared with more than three-quarters who are men. Senior managers refer to CEOs or managing directors and the tier of leadership just below them. Fifty-two firms provided information on their top executives, totalling 143 female and 392 male managers.

Past global studies have found that there is a positive relationship between diversity (age, gender, race, etc.) in company leadership and management and performance.

A 2016 study by the US-based Peterson Institute for International Economics, which involved 21,980 firms from 91 countries, found that the impact on performance is greatest for female executive representation, followed by female board proportions. But CEOs representation has no noticeable effect. This pattern highlights the importance of creating a pipeline of female managers and not simply getting women to the very top.

For profitable firms, a move to have the share of female leaders increase from zero to a third would increase the net revenue margins of the firms by 15 percent, according to the study.

Atlas Development Services, which was suspended from the stock exchange last year, was not included in the survey. Also left out was Nairobi Business Ventures because its updated annual and financial reports or website were not readily available.

Diamond Trust Bank’s managing director and Group CEO in East Africa, Nasim Devji, was appointed to her current role in 2001, making her the longest-serving head of a publicly listed company among the four. She joined Diamond Trust Bank over two decades ago as a regional coordinator-cum-financial controller before she was appointed to her present role.

The managing director of British American Tobacco Kenya and director of BAT East and Central Africa, Beverley Spencer-Obatoyinbo served in the company for over two decades before she was appointed to her current role in May 2017.

The women at the helm of the listed companies include the managing director and chief executive officer of KenGen, Rebecca Miano, who has served in the post for about one year, and BOC Kenya managing director, Marion Gathoga-Mwangi, who has steered the company since mid this year.

The three female chairs of board of directors are Anne Mutahi, who heads the board of Standard Chartered Bank, Isabella Ocholla-Wilson (Unga Group), and Lucy Waguthi (Eveready East Africa).

The small number of women heading companies is not unique to Kenya, with only 24 of the US Fortune 500 companies having women CEOs or managing directors. This was a decline of a quarter from 32 in 2017. The Fortune 500 is an annual list of 500 of the largest US companies compiled and published by Fortune magazine.

Globally, Asia and Australia have one in eight (12 percent) CEOs who are women, compared with Europe and the Americas (eight percent), according to a study by IRC Global Executive Search Partner.

Senior management

Only 18 of the 52 Kenyan listed companies had at least a third of their senior management who are women. Of these companies, four are in the commercial and services sector and three in banking, insurance and manufacturing and allied sectors each. The energy and petroleum, and investment sectors had two companies each while real estate investment had one.

Stanlib Fahari, in the real estate investment trust sector, is the only firm that had all of the senior management staff (five) who are women. It is a fund under STANLIB Kenya, with an estimated market value of about Sh1.94 billion as at December last year, which is about 600 times smaller than Safaricom’s value of Sh1.2 trillion.

Half of the senior managers at Kenya Airways are women, making it the leader in gender representation in senior leadership among listed large corporations, and second overall. The other companies that have achieved gender parity in senior management are TransCentury, Express Kenya and Home Afrika.

Four companies — Crown Berger, EA Portland Cement, Kakuzi and Williamson Tea Kenya — have no women in senior management. Nine other companies — National Bank of Kenya, Kenya Power and Lighting Company, Equity Group Holdings, Co-operative Bank of Kenya, Nation Media Group, Sameer Africa, KenGen, EA Cables and Uchumi Supermarkets Ltd — have a women representation rate of less than 15 percent in top management.

Role of women

Women with backgrounds in finance-related fields accounted for a quarter of the senior female managers, followed by human resources specialists, business management experts (a fifth each) and corporate lawyers (14 percent).

In addition to external barriers erected by society, women are hindered by barriers that exist within themselves. “We hold ourselves back in ways big and small, by lacking self-confidence, by not raising our hands, by pulling back when we should be leaning in,” says Sheryl Sandberg, the chief operating officer of Facebook, in her bestselling book Lean In.

In a 2017 study by the Harvard Business Review, two thirds of the 57 female CEOs interviewed said they did not realise they could be CEO until someone else told them, explaining that their focus was on producing results rather than their own advancement and success.

The study, in which 41 of the participants were from Fortune 1000 companies and 16 from large privately held companies in the US, also found that only five of the women leaders had always wanted to be CEO and three never wanted to be but took up the job out of a sense of responsibility.

By sector

Apart from the real estate investment trust sector, which has only one listed company (Stanlib Fahari), the sector with the largest share of senior women executives is investment, with 37 percent, followed by insurance (34 percent).

The agricultural sector had six percent of its senior managers who are women, the least. Second from the rear were automobiles and accessories (13 percent) and construction and allied sectors (14 percent).

In terms of absolute numbers, the banking sector had the largest number of senior female executives at 39, followed by insurance (29), and commercial and services (25).

The automobiles and accessories sector, with only two companies listed, has the highest proportion of women on its board at 40 percent, followed by manufacturing and allied and telecommunication, each with a third. On the stock exchange, the manufacturing sector comprises nine companies, while telecommunication has only one – Safaricom.

When individual companies are considered, Eveready has the highest representation of women on its board, with 60 percent or three out of five board members. It is followed by Deacons, with half of the six board members being women. The company has invoked the Insolvency Act No.8 that gives companies going through financial distress to appoint administrators in order to explore other possibilities of rescuing them. Bamburi Cement is placed third, with 45 percent, or five of its 11 board members, being women.

In seven of the companies surveyed, including four in the agricultural sector, there was no woman on the board.

The overall Newsplex findings on board compositions are similar to a Board Inclusion and Diversity Survey that was conducted by the Kenya Institute of Management in 2017.

Boards play a critical role in business oversight and guiding strategy.
In Lean In, Sandberg cites research which suggests that companies with women in leadership roles have better work-life policies, smaller gender gaps in executive compensation and more women in mid-level management.

The sectors that had a high representation of women in senior executive posts also tended to have the highest proportion of female employees. Among 10 companies whose total employee numbers were disaggregated by gender, the insurance sector employs the largest share of women, with nearly half (49 percent) of the overall staff being female. It is followed by investment services, with (48 percent), banking (45 percent) and investment (40 percent).

The Harvard Business Review study suggested several steps companies can take to build and sustain a pipeline of female CEOs. They include developing promising future talent early, providing sponsors and mentors to women and setting job descriptions in a way that motivates women through communicating about the impact and meaningful contributions a role brings.

This is because female CEOs tended to pursue roles (or even invented roles) that not only leveraged their skills in a way that made a difference by adding value to the business but also advancing something that the world, customers, or employees benefited from.