In the previous article, we discussed the Research findings as well as how the data was gathered to conduct this study on Board Gender Diversity. This article shall bring forward the Conclusions reached, as well as what are the Recommendations that should be taken into consideration by local public authorities to mitigate the effects of patriarchal structures.
Patriarchal structures and strong family traditions remain major obstacles in the Maltese region. Such barriers are likely to arise when the majority of the company's shares are family-owned, as such shareholders are likely to maintain family traditions. Another obstacle is created by the fact that directorships are mostly associated with men. As a result, women can easily become discouraged in their efforts to compete for directorship roles, as such barriers force them to prove themselves more in such circumstances in order to succeed. Another problem is the treatment of young girls and boys. Such approaches tend to eventually lead to the association of certain subjects with men, and fields related to such subjects tend to be more male-oriented so that the know-how necessary to manage the entity becomes the prerogative of males over time. Board Gender Diversity ('BGD') is also hampered by the fact that Malta is a small island state, making it more of a "network-based society". It can be difficult for women to enter such networks. Therefore, this may explain why the number of qualified potential female board candidates is perceived to be much lower than that of men. Since the male group is more visible than the female group, the "old boys club" (Adams and Ferreira, 2009, p.292) are still appointed as board directors.
Potential female directors who are mothers may no longer have childcare responsibilities at the time of election to the board. However, such childcare issues can negatively affect women's career progression from lower levels for them to eventually become considered as board material. More often than not, women are expected to give up or put their careers on hold when they become mothers. This may even be due to the design of family-friendly measures as they seem to be directed exclusively at mothers, reinforcing the mindset that it is women who must take care of their children. Innovative ways of working, such as teleworking, may have put more pressure on women to juggle multiple responsibilities, especially after the outbreak of the Covid-19 pandemic which is thought to have caused much more caring responsibilities upon females. This makes it difficult for them to take their career to a new level and take on additional responsibilities such as a board position. Overall, the impact of such barriers is that it renders BGD as yet rather low in both Maltese equity-listed entities ('MLEs') and large public sector entities ('LPSEs').
The perceived implications on the effectiveness of boards are clear: the more the female board ratio increases towards a reasonable female/male balance, the more boards are rendered effective by such BGD. This is mainly due to the increase in skills, personalities, and perspectives. Using this combination on a board is useful because the viewpoints on the board will vary. BGD is likely to nullify any behavioural extremes that might arise if the board were all male or all female. Thus, a combination of different personality traits can help the board to have a balanced approach to decision-making. Depending on what the situation requires, one must be risk-taking, detail-oriented, sees the big picture, be practical, and so on. The board would no longer be driven by one way of thinking but instead is likely to become more open to creative and innovative thinking. Nevertheless, more female participation allows boards to benefit from female director insights especially on female-targeted products and on issues relating to Human Resources.
While such variation can make it difficult to reach consensus among the board, BGD can, among other things, promote a faster solution or at least reduce the harmful effects of groupthink. A change of perspective easily leads to more informed decision-making, which leads to improvements in the setting and implementation of strategies and policies. Such a process is likely to become more informed as long as female directors are allowed to fully and freely participate in board meetings. Indeed, the extent to which groupthink is reduced may depend on the extent to which female directors are allowed to express their opinions and their views are valued without being ignored. In addition, the participation of women tends to become more effective upon the achievement of a female critical mass, which is best determined by each entity. However, even with this achievement, the extent of BGD's effectiveness may vary depending on how much gender stereotyping may exist among male board members.
The current BGD level of MLE and LPSE boards can be improved in various ways. The main objective must be to take immediate action to increase the proportion of female boards, ensuring that the current inadequate level of BGD in such entities is raised as soon as possible.
In the near future, the Maltese public authorities may launch educational campaigns to mitigate the effects of patriarchal structures and strong family traditions. This is likely to help begin the process of eliminating gender stereotypes that can affect male and female roles. Educational campaigns can convey the value of women's participation at the board level, thereby dispelling misconceptions about women's capabilities. Throughout such campaigns, one can become aware of how both parents can effectively handle family responsibilities so that the domestic burden does not fall excessively on the mother. Young women should be actively encouraged to study more subjects that are currently mostly studied by men. This is likely to be later reflected in more senior positions and directorships being taken up by females.
For the female pool to become more visible in board elections and nominations, it is recommended that female candidates participate more in professional organisations and associations, conferences and seminars. It is also recommended that female mentorship programmes are implemented either by the MLEs and LPSEs themselves or by the Maltese public authorities on a regular basis. Such mentoring would help mentees better understand what is expected of them in their future leadership role and motivate them with the mentors' own experiences. This can be beneficial in terms of increasing the mentee's confidence and likelihood of being considered for such high-ranking positions.
National conferences organised by the Maltese public authorities can be launched to emphasise the importance of more family-friendly policies in the workplace. Such measures could include increasing the flexibility of working hours for parent employees so that the desired work-life balance can be achieved with less difficulty. There should be an increased awareness of how qualities often associated with women can add value to the firm and to the board, and how entities can make the most of those qualities. In this way, firms would be more motivated to appoint and promote women for directorships.
Statutory quotas can be a mechanism to really accelerate a successful solution to the current under-representation of women on MLE and LPSE boards. The implementation of quotas seems to be an important shortcut, but a viable measure to combat deep-rooted perceptions on women’s role in society as a home giver. Gender quotas introduced in the near future may be useful in making BGD the new norm, although such a measure may not be considered a complete solution on its own. In order for quota-related appointments to remain merit-based as much as possible, quotas would require that appointments continue to be based primarily on qualifications. Female candidates selected on the basis of quotas should, if possible, be selected taking into account their own skills and qualifications.
The concept of reasonable gender representation could be legislated. Considering that entities are different in their characteristics, each entity would have the responsibility to appoint an appropriate number of female directors which corresponds to a reasonable representation in the given situation. This would require the implementation of a legal provision linked to the concept of reasonable gender representation and the appointment of a minimum number of directors for each gender, e.g. two or three. This should apply to all MLEs and LPSEs for at least five years. Henceforth, if circumstances permit, such obligation can be relaxed by making it a similar provision on a comply-or-explain basis in the Code of Principles of Good Corporate Governance for all MLEs and in the Corporate Governance Guidelines for Public Interest Companies for all LPSEs.
The mandate of the Nomination Committee ('NC') could include an additional obligation to ensure that its recommendations also consider whether and to what extent the nomination or election of each candidate contributes to BGD. NCs could consider the gender-specific goals of the entity. This may mean that in recommending one of two otherwise similar board candidates with similar skills and experience, preference will be given to the one whose appointment increases BGD. During this process, care must also be taken to ensure that no biases or conflicts of interest arise among NC members. Last but not least, MLEs and LPSEs could invest more in creating opportunities for women at lower corporate levels so that women gain enough experience to eventually present themselves for the candidatures of board directorships.
At Grant Thornton, we believe that promoting and supporting women in business is crucial for fostering diversity, equality, and inclusion in the corporate world. Encouraging women to pursue their entrepreneurial aspirations and providing them with the necessary resources and opportunities can lead to a more balanced and innovative business environment. By embracing gender diversity, entities can tap into a wider range of perspectives, experiences, and talents, leading to greater innovation and success.