U.A.E. Promotes Women in the Boardroom

http://www.nytimes.com/2012/12/20/world/middleeast/uae-requires-women-board-members.html

Version 0 of 1.

DUBAI — Make some room in the boys’ club: It is now mandatory to have female board members in every company and government agency in the United Arab Emirates, according to a new instruction from the U.A.E. government.

The requirement, the first of its kind in the Arab world, was announced via Twitter by Sheik Mohammed Bin Rashid Al Maktoum, vice president of the U.A.E. and ruler of Dubai, on Dec. 9.

“Historically, our Arab economies have been planned and run exclusively by men, so introducing a critical mass of capable women into strategic roles will help evolve our economies,” said Najla Al Awadhi, one of the first female members of the U.A.E. Parliament and the first Arab woman to become chief executive of a state-run media organization, Dubai Media.

“It will help with innovation, entrepreneurship, and the development of new markets where new employment opportunities will become a reality,” she said.

A handful of other countries, including Norway and France, have recently passed legislation requiring that corporate boards include a minimum percentage of women.

The thinking among business experts is that having women and other groups often absent from decision-making roles should make companies more competitive.

In the U.A.E., female university graduates far outnumber their male counterparts; yet the participation of women in the private sector work force remains startlingly low.

Some 25 percent of Emirati boys are high school dropouts and only 30 percent of university graduates are men, according to 2012 statistics from the Knowledge and Human Development Authority in Dubai.

So even though 70 percent of university graduates in the U.A.E. are women, men still completely dominate boardrooms in the workplace.

“Women taking leadership roles will come with initial challenges socially and culturally due to the male dominated work forces, and for the U.A.E. these challenges might be magnified, but with women outnumbering men in all elements of education — especially at the university level — it is only natural that the country takes an approach of ‘best person for the job,”’ said Khalid Al Ameri, an Emirati who formerly worked at Mubadala Development Company and is currently an M.B.A. candidate at Stanford University.

Only 4 percent of Emirati women work in the private sector, with a striking 60 percent opting for government work, according to the Oxford Strategic Consulting Group.

“While the U.A.E. has achieved a lot since its foundation, we must also remember that it is a young nation that is still developing,” said Tala Al Ramahi, a senior analyst in socioeconomic public policy with an Abu Dhabi government agency.

“Having female representation in board rooms makes sure that women are an integral part of this development and nation-building process — not just passive participants.”

Change is already taking place. Last week, Dubai Quality Group, a nonprofit organization that deals with corporate governance, elected three women to its board.

A study by Credit Suisse published this year found that large companies with female board members outperformed companies with all-male boards. Companies with at least one female director on the board had an average growth in net income of 14 percent in the past six years, compared with 10 percent for boards with just male members, according to the research.

But it is not just a matter of breaking glass ceilings; as companies struggle to remain innovative and competitive, diversity of every kind is being embraced.

Leila Hoteit, a U.A.E.-based consultant at Booz & Co., says that the role of the corporate board is evolving. Companies are looking for diversity and “unconventional profiles” to bring together more points of view and wider perspectives for the purposes of planning and decision making.

According to Booz estimates, raising female employment to male levels could add 12 percent to the G.D.P. of the U.A.E.

“Having Arab women in senior management shows the younger generation that this is no longer a mere aspiration or exception, but has become a standard in the work force,” said Ms. Hoteit.

“This creates a virtuous cycle whereby recruitment of women in top positions will progressively be seen as natural and won’t need to be supported by positive discrimination measures like quotas.”

Role models are crucial in changing social attitudes. Sheika Lubna bint Khalid Al Qasimi, who is the U.A.E.’s foreign trade minister, served as a role model for Najla Al Midfa, who today is the first ever female on the board of United Arab Bank, a 37-year-old bank headquartered in Sharjah.

“It is about diversity in terms of gender, age, nationality, and our different professional experiences,” said Ms. Al Midfa, whose day job is at the Khalifa Fund, which supports Emirati entrepreneurs.

Ms. Al Midfa is an Emirati national with a Stanford M.B.A. She has worked as a consultant at McKinsey.

“It’s about the power of three: 1 is a token, 2 is a presence, 3 is a voice,” she said. “Having one person like me on the board of a bank is a step, but it’s when we get critical mass that systemic improvement takes place and we won’t even need quotas.”