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Sun Nov 23 15:23:21 CAT 2014

THE BIG READ: Still outside looking in

Lucy P Marcus | 26 February, 2013 00:35
Outgoing Anglo American CEO Cynthia Carroll speaking at the mining indaba earlier this month in Cape Town. Gold Fields announced this month that Cheryl Carolus had replaced Mamphela Ramphele as chairman of its board. Mining, however, continues to lag other sectors in terms of the number of women executives

On the 50th anniversary of the publication of Betty Friedan's The Feminine Mystique I've started to wonder how far we've come in the boardroom.

As I finished a conversation with a recruitment company that specialises in oil, gas and mining this week, I questioned the level of progress.

The company noted that, for the most part, the employers it speaks to are simply not interested in having women on their boards. They don't see the point of diversity.

They say there aren't enough women with direct experience in oil, gas and mining, and they don't have an interest in looking outside the industry.

Some companies in these sectors are bowing to international pressure to add women and several, such as energy industry giants Exxon Mobil, BP and Shell, have two women non-executives on boards with 12 to 15 people.

Mining is the worst sector for gender diversity, with just 5% of board seats in the top 500 mining companies held by women, according to a recent report published by Women in Mining and PricewaterhouseCoopers.

Diversity of thought, experience, knowledge, understanding, perspective and age means that a board is more capable of seeing and understanding risks and coming up with robust solutions to address them. It's not about sticking a bunch of women on the board for the sake of optics. It is about extending the fundamental principles of good governance to the oil, gas and mining sectors. Healthy businesses need comprehensive diversity.

The industry is rife with governance issues and putting the same people on the board over and over again is not going to fix that. According to the report by Women in Mining and PwC , profit margins are higher for mining companies with women on the board.

Of the top 500 mining companies surveyed, the 18 with 25% or more of their board consisting of women had an average net profit margin for the 2011 financial year that was 49% higher than the average net profit margin for all top 500 mining companies. Their research also showed that companies with female board members have a higher average profit margin overall (23%) than the average net profit margin for the top 100 mining companies (20%).

Mining giant Glencore's board is made up of men alone. Glencore is soon to become even bigger after its merger with Xstrata, another company with no women on the board. (Of the Glencore board members, CEO Ivan Glasenberg is South African born. Mick Davis is Xstrata's CEO and he was also born in South Africa.)

Glencore let it be known that it would (cue the trumpets) add a woman after it had completed its merger with Xstrata. It seems that even contemplating a woman board member is momentous for Glencore. A spokesman is reported to have said: "The appointment of a female board director is a significant consideration."

Outgoing Anglo American CEO Cynthia Carroll is probably the best example of a high-powered female executive in the mining sector after being at the helm for nearly six years. She is stepping down next month. Might she be the "woman" Glencore/Xstrata is talking about appointing to the board?

Glencore is the same outfit whose chairman, Simon Murray, in April 2011 told the UK's Daily Telegraph: "Women in the boardroom? Terrific. Why not? Always welcome. But why make a special case out of it? Why tell everybody you've got to have x number of women in the boardroom? Women are quite as intelligent as men. They have a tendency not to be so involved quite often, and they're not as ambitious in business as men because they've got better things to do. Quite often they like bringing up their children and all sorts of other things.

"All these things have unintended consequences. Pregnant ladies have nine months off. Do you think that means that when I rush out, what I'm absolutely desperate to have is young women who are about to get married in my company, and that I really need them on board because I know they're going to get pregnant and they're going to go off for nine months?"

When I talked to Trevor Philips, former chairman of the UK's Equality and Human Rights Commission, we looked at things that can be done to bring diversity of all kinds to boards.

Philips advocates greater transparency and reporting but we know the numbers, and we've known them for a long time. He also suggests instituting a version of the NFL's Rooney rule, created to address the extreme imbalance of minority candidates for head coaching and senior football operation jobs in the US.

Having women on short lists is fine unless the women are consistently not chosen, and then become tainted by the perception that they are "ever the bridesmaid, never the bride."

I recently cleaned out an old filing cabinet, and in a file labelled "Boards/Women" I found 10- and 15-year-old reports focused on the benefits of adding women to boards.

What would Friedan think of us? After all, that is a lot of years of talk in those files and not a lot of movement. - Reuters and TJ Strydom

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