Historically, corporate boards in many countries have been comprised mainly of men. A number of European market regulators are considering imposing quotas of women on the boards of publicly traded companies as a requirement in the new Code of Corporate Governance, and this is likely to compel business to consider gender diversity of corporate boards.
A report published by the Institute for Employment Studies notes that, “Despite long-standing anti-discrimination legislation in the US, UK and across Europe, women still remain under-represented in many occupations, most noticeably in high-level posts. This phenomenon is seen at its most extreme when the composition of company boards is considered. In the USA, women constitute on average 14.7 per cent of board members on Fortune 500 companies; in the UK, women hold 11 per cent of FTSE 100 directorships, according to the 2008 Sex and Power report published by the UK Equality and Human Rights Commission.”
In Pakistan majority of listed companies are managed by controlling shareholders who are close family members. Other investors in these companies are in minority. According to section 196(2) of Companies Ordinance 1984, directors can exercise borrowing powers of the company by means of a resolution at a board of directors meeting. Code of Corporate Governance also allows directors to exercise all powers on behalf of the company and only binds them morally to do this “with a sense of objective judgment and independence in the best interests of the listed company.”
Further, it asks to maintain “a complete record of particulars of the significant policies, as may be determined, along with the dates on which they were approved or amended by the Board of Directors.” Practically, there is no check on the directors regarding imprudent decisions.
The instability in Pakistan’s Swat Valley, leading to the influx of internally displaced persons into the surrounding areas, has been dominating the news from that region. Yet even in the midst of difficulties, there are some positive developments worth highlighting. CIPE’s work with women in the Mardan district is one such example.
District Mardan of Pakistan’s North-West Frontier Province (NWFP) has a significant position in the region in terms of trade and business. There exists an untapped potential for the promotion and development of trade and industry. However, due to lack of entrepreneurial skill and professional training, the ability of local businesses to flourish and contribute to the economic development is hindered.
The business environment for women in Mardan reflects the complex interplay of many factors, which fall into two basic categories. The first category is made up of social, cultural, traditional and religious elements. The second category is induced by the factors of the first component, taking the form of constitutional structures, policy documents, regulatory arrangements and institutional mechanisms. However, women in Mardan do not have access to basic technical training to optimize their potential and generate sources of income.
Under the Business Support Organization (BSO) grant program, CIPE in partnership with the Mardan Chamber of Commerce & Industry (MCCI) last year established a training and resource center with the capacity to develop entrepreneurial, business and computer skills for its women members.