Increase in Board Gender Diversity in the Listed Companies in Pakistan: SECP

Gender diversity on boards of listed companies has increased, according to a recent report on 'Women on Boards' by the Securities and Exchange Commission of Pakistan (SECP).

SECP explains that the Listed Companies (Code of Corporate Governance) Regulations 2017 has had a positive impact on board diversity in the listed companies. The impact is visible across the number of women on board, the number of independent women directors and chairpersons.

The proportion of listed companies with women directors shows an increase from 31 percent in 2017 to 58 percent in 2019.

Regulation 7 of the 2017 Regulation requires all listed companies to have at least one female director on their boards and non-compliance would mean a penalty of up to Rs.5 million. Moreover, if the contravention is a continuing one, a further penalty of up to Rs.100,000 per day will be imposed.

It is evident that women directors have increased by 3 percent since the regulations were introduced: from 8.8 percent in 2017 to almost 12 percent in 2019. At the same time the number of Chairwomen increased from 24 to 33 (an increase of 37.5 percent).

In addition to this, similar trends have been observed by SECP across various sectors. The financial, textile, manufacturing, pharmaceutical and chemical, engineering and automobile, and energy show the greatest increase in number of women directors. Textile and manufacturing have the highest number of woman directors, 75 and 74 respectively.

Moreover, the textile sector also depicted the greatest increase with respect to the proportion of female chairpersons from 8 in 2017 to 13 in 2019, while the Energy Sector also doubled its number of women Chairs.

However, the SECP report also indicates a downward trend in the number of senior women occupying C-suite positions, which might have direct implications for the lack of a healthy corporate pipeline of future business leaders.

While many countries have initiated measures aimed at increasing gender diversity at the senior management levels, Pakistan also hopes to ensure greater female representation in decision making positions.