The Global Gender Gap Report 2023 again highlights the need for renewed and concerted action due to the persistence of large gender gaps worldwide. In terms of closing the gender gap, South Africa ranked 20th overall with 78% gap closure. This is well above the average score of Sub-Saharan Africa, with the region scoring only sixth out of eight at 68,2% gap closure.
The gender gap is an index measuring the gap to gender equality in terms of economic participation and opportunity, educational attainment, health and survival and political empowerment.
Of interest to note is that the The Global Gender Gap Report 2023 reports a 25% decline in senior executive leadership positions. This represents a reversal of what the trend has been over the last decade. For the past eight years female appointments into senior leadership positions have been gaining traction at about 1% per year globally. However, since 2022 there has been a decline, leading to current rates at 2021 levels.
This reversal in trend is of concern in light of mounting evidence that more diverse boards, especially female executives, lead to better firm performance. For instance, a study by the Peterson Institute found that a 30% increase in female executives resulted in increased company profits in excess of 15%. Similarly, Quantopian hedge fund reported that over a 12 year span, companies with female CEOs produced 226% higher equity returns than S&P 500 firms in total.
In line with international trends, the increased presence of women on the board of directors has been associated with improved company performance in South Africa. Yet, women continue to be underrepresented in higher-paying management positions.
When considering the main board of the JSE, the largest securities exchange in Africa with a market capitalisation of US$1.36 trillion, our investigation of the companies’ executive composition for a recent five year period revealed that the female executive representation was at 10% and the female CEO representation only at 5%. During this period, we also observed a persisting gender pay gap where the average female executive remuneration was 60% of their male counterparts.
The Global Gender Gap Report 2023 also noted that different industries reveal different patterns of female representation in leadership positions, especially on the so-called “drop to the top” trajectory. For main board JSE listed companies, we found that more than 25% percent of sectors had no female executive representation for the 5 year period under review. This is in line with global studies pointing to industry-specific characteristics such as the composition of the industry’s workforce explaining the existence and size of the gender leadership gap.
Granted, our investigation was limited to main board companies on the JSE and therefore excluded a wide range of companies making up the South African landscape. Future research could be aimed to gathering insight from female leaders who managed to succeed in traditionally male dominated industries. One such leader is CEO Nonhlanla Taylor at private company Oil Tanking & Mogs. When asked about her keys to success, Taylor pointed to proper mentoring as being “the single most important aspect of my career, I cannot emphasise it enough”. Many of her mentors were colleagues who were willing to not just trust her with responsibility, but also employ a nurturing mindset. When asked what advice she has for aspiring female leaders, she simply stated: “forge ahead, speak your truth and never quit your journey”.
Our research at the Business School is ongoing. We are expanding the study to investigate a longer period to gain insight into how sectors are progressing in closing the gender pay gap over time.