VII. Montaje Final: Causalidades
VII.1 Descripción general de la obra
A review of the gender mix on boards is a necessary part of any thorough analysis of corporate board systems. In numerous countries, the small amount of women
95 See Fahad M. Al-Majed, A Conceptual Framework for Reforming the Corporate
Governance of Saudi Publicly Held Companies: a Comparative and Analytical Study from a
Legal Perspective, Hard copy, Unpublished PhD thesis in Manchester University, 2008,
47 who act as directors on boards of directors has been the cause of much consternation. Some nations, such as France, Sweden and Norway and soon Italy, have utilised legally binding quotas to ensure that the gender balance in boardrooms is more equitable. In the recent past, boardrooms in the UK have shown a trend towards there being higher numbers of NEDs than executive directors and thus concern about gender inequality focuses on women securing NED positions96. A recent FTSE report reveals that in FTSE 100 firms, there were over 800 women acting as NEDs while less than 300 held executive director roles97. The Davies Review Annual Report 2014 reveals that the number of women on the board of directors of FTSE 100 companies has risen from 12.5% in 2011 to 20.7% in 2014 with two FTSE 100 firms still to welcome a woman onto their boards98. It was Lord Davies’ recommendation in 2011 that by 2015 at least one quarter of the board members of FTSE 100 companies should be women99. The government endorsed the recommendations and the target has been achieved. In 2015 a report was published in which Lord Davies states that over a quarter of positions on FTSE100 boards are filled by women. The
96 See Mark McCann and Sally Wheeler, "Gender diversity in the FTSE 100: The business
case claim explored", Journal of Law and Society 38.4, 2011, 542.
97 According to FTSE, the FTSE 100 companies are those who have a bard with an average
size of 11 member, see Susan Vinnicombe, Elena Doldor and Caroline Turner,"The Female FTSE Board Report 2014” Cranfield University, 2014.
98 See Lord Davies, “Women on boards” in Davies Review Annual Report 2014, available at:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/297519/bis- women-on-boards-2014.pdf.
99 See Lord Davies, “Women on boards” in Davies Review Annual Report 2011, available at:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31710/11-745- women-on-boards.pdf.
48 recommendation made in the report is for a new voluntary target: women should hold a third of positions on the boards of FTSE350 companies within five years100.
Former UK Business Secretary Vince Cable praised the EC’s decision to abandon compulsory quotas. He argued that the United Kingdom is dedicated to including more women on boards of directors in UK companies but states that any legislative measures are always best dealt with on a national rather than European level. Cable affirmed that the approach outlined in the Davies Review, that is, an approach led by businesses and subject to self-regulation, is the optimal method for the UK to adopt but reassures the EC that the UK will work alongside other Member States to review the EC’s proposal and establish a Directive that enhances national initiatives to create more gender equality on boards101.
The reviewed UK CGC was published in mid-2010. This amended CGC introduced Supporting Principle B.2 which acknowledges the benefits of boardroom diversity. This principle specifies that, when seeking candidates for a board, all interviews and appointments should be based on merit and guided by
100 See Lord Davies, “Women on boards: 5 year summary” Davies Review, 2015, available
at:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/482059/BIS- 15-585-women-on-boards-davies-review-5-year-summary-october-2015.pdf.
101 Legislative Comment, “Commission sets "objectives" for female non-executive directors
49 objective requirements taking into account the value of having a board that is diverse, including gender diversity.
An alternative account of how gender categories inflect upon governing boards, relating to the enlightened shareholder value (ESV) principle102, was offered by Valsan. He suggested that leading or authoritative traits are linked to more male characteristics, while conciliatory or collective ones are considered more female. Additionally, he states that ESV principles have affected attitudes towards the prevalence of interpersonal board relationships. Valsan notes that studies of the correlation between authority and gender has revealed women are better at interpersonal relationships than men. Consequently, when a board incorporates both authoritative and collective aspects, Valsan believes the board will be more successful in achieving overall managerial objectives103.
Although at first women may be appointed to boards as a token gesture, they will nonetheless have the opportunity to participate in all of the activities of a board of directors. Industry type has a significant impact on whether women are appointed to boards. Physical and technical businesses have significantly less women on their boards than do firms from the consumer and economic industries104. The appointment of women to boards should not be done because it
102See Ch 3, para 3.3.3.2.
103 Remus Valsan, “Board gender diversity and the enlightened shareholder value principle”
Comp. Law. 2016, 37(6), 171.
104 Mark McCann and Sally Wheeler, "Gender diversity in the FTSE 100: The business case
50 could be ‘good for business’. Women deserve a place on boards due to their economic participation and their justified calls for equality105. However, European nations such as Spain face a serious challenge in encouraging the appointment of women onto boards as their history and culture is steeped in the concept of male dominance, a concept that is so ingrained that it manages to continue without attracting any real censure in the country. Removing this entrenched cultural attitude will be hugely challenging106.
According to statistics concerning the number of women on boards in the GCC, including Saudi Arabia, only 5% percent of directors on the boards of family companies are women107. The rights of women in Saudi Arabia have long been a highly contentious issue. However, substantial attitudinal shifts concerning women’s rights have occurred recently. For example, women can now be appointed to the Majlis al-Shura, or consultative council, and have been allowed to vote since 2015 municipal council elections108. These developments indicate that Saudi Arabian law-makers have become more mindful of women’s social, political and economic rights. As a natural progression of the rights of women in
105Ibid.
106 See Isabel Huerta Viesca “Women on the boards of major Spanish corporations after the
entry into force of the Organic Equality Law 3/2007” Comp. Law. 2010, 31(7), 219.
107Alhayah newspaper, “5% is the percentage of women in GCC family companies’ boards”,
2014, available at: http://goo.gl/FyA7IZ.
108 See Roel Meijer and Paul Aarts, Saudi Arabia between Conservatism, Accommodation
51 the country, new legal provisions should be introduced compelling firms to appoint female board members.
Given its status as a Gulf country, it is interesting to note that the United Arab Emirates has recently implemented quotas associated with gender. As one of the initiatives of this scheme, legislation has been brought forward to motivate organisations to approach gender parity regarding directorial company boards, and, as stipulated by the Ministerial Resolution 225 of 2012, it is necessary for the board of directors in joint stock companies to have a minimum of one female member109. The underlying rationale for such a ruling is that having at least one female member on boards of this kind will serve to represent women equitably at the leadership level, thereby meaning that female interests will have some level of representation in the decision-making sphere110.
As previously noted, female representation on directorial company boards in the United Kingdom rose above one quarter of all the positions held in FTSE 100 boards, and this took place even in the absence of pertinent legislation. In this way, in contrast to the United Arab Emirates, the method adopted in the UK is characteristic of the free market ethos of allowing companies themselves to
109 Amending some provisions of the Ministerial Resolution 518 of 2009 concerning
Governance Rules and Corporate Discipline Standards
110 Sandeep Gopalan and Katherine Watson, “An Agency Theoretical Approach to Corporate
Board Diversity” San Diego Law Review, 52(1), 2015, 1. Also, see PM HH Sheikh Mohammed, Twitter (Dec. 9, 2012, 3:36 AM), accessible at
52 determine the most viable course of action111. Many commentators suggest that this is a favourable avenue to take, primarily because legislating for the representation of women on directorial company boards could have the impact of leading to positive discrimination112. Furthermore, given that the degree to which boards are diverse in terms of gender constitutes a socially-informed responsibility, as determined by responsive theory113, businesspeople who are motivated by social responsible conduct are likely to have their actions informed and directed by a self-regulatory framework114.
Recently, the Growth and Emerging Markets Committee of the International Organization of Securities Commissions (IOSC)115 indicated that board diversity, including gender, ethnic, age and level of expertise, should be encouraged through recommendations and guidelines. To incorporate these diverse elements into a homogenous whole, the IOSC proposes that a balance of appropriate skill- sets, experience and capability should be achieved116.
111Ibid.
112 Aaron Dhir, Challenging boardroom homogeneity: Corporate law, governance, and
diversity, Cambridge University Press, 2015, p.21.
113 For in depth see Ch 5, paras 5.3.2.
114 See Ian Ayres and John Braithwaite, Responsive regulation: Transcending the
deregulation debate. Oxford University Press, 1992, p.24,25.
115Saudi Arabia is a member of IOSCO Board.
116 The Growth and Emerging Markets Committee of the International Organization of
Securities Commissions (IOSC), Report on Corporate Governance, October 2016, available at: https://www.iosco.org/library/pubdocs/pdf/IOSCOPD544.pdf [Accessed October 30, 2016].
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