Around the world – and especially in APAC – robust correlations have emerged between business performance and board gender diversity. A new initiative is taking steps to increase gender inclusivity in Sri Lanka, a country where board diversity has been slow to increase.
It is becoming widely recognized that board diversity positively correlates with company performance. With varied perspectives and experiences, a diverse board is better positioned to make well-rounded, educated decisions and effectively mitigate the increasingly complex and wide-ranging issues facing companies today. Many, furthermore, believe that women offer benefits to boards such as effective collaboration, listening and relationship-building, insightful acquisition and investment decision-making and measured risk-taking.
In a new effort to increase the number of women who serve on corporate boards in Sri Lanka and across the Asia-Pacific (APAC) region, Women Corporate Directors (WCD), KPMG and the International Finance Corporation (IFC) are joining forces with the Sri Lanka Institute of Directors (SLID) and the Australian government. The main initiative is launching a WCD chapter in Sri Lanka with 16 founding members, which will provide networking and educational opportunities to current and aspiring women directors in Sri Lanka.
There is a clear link between women in leadership and company performance, specifically in the Asia-Pacific (APAC) region which, per a recent study from the International Finance Corporation (IFC), recorded a higher return on assets and equity for companies whose board composition was at least 30% women, compared with companies that have a lower percentage or no women on their boards.
Across the globe, companies are shaking up their board structures and realizing the benefits of diversity, including gender diversity, at the highest level of corporate leadership. However, the transformation is occurring at varying paces country-to-country.
Board Diversity in Sri Lanka
Sri Lanka has been slow to make progress toward reaching gender parity in corporate leadership. Women currently fill less than 10% of board seats of publicly listed companies on the Colombo Stock Exchange. That is at least 4% lower than other regional contenders, according to BoardEx’s 2021 Global Gender Balance Report. For perspective, the country would need 500 more women on corporate boards to reach gender parity.
Because of its potential, this region has strong potential to make progress on the UN’s Sustainable Development Goals, and global organizations are pledging to help the most in-need countries reach these milestones. Most recently, the U.S. Government committed $150M in financial support for woman-led small- and medium-sized businesses in Sri Lanka.
Efforts to support representation of women in Sri Lanka’s business sector are of critical importance at this juncture of Sri Lanka’s economic growth and post-pandemic revival. As research suggests, gender parity could lead to greater financial success for Sri Lankan businesses, which would spur overall growth for Sri Lanka and global recognition for the region.
However, there needs to be some cultural shifting to truly enable women to take a greater role in the workplace in Sri Lanka. The country needs macro-level solutions to make the workplace more accessible, along with a micro-level approach amongst individual women.
At the macro-level, Sri Lanka needs:
Systemic Changes that Allow Women to Join the Workforce
Women’s overall participation in Sri Lanka’s labor force is only at 36%, according to the World Bank, which is considerably lower than other countries in the region and well below international standards. Though more women than men are currently acquiring degrees in Sri Lanka, significantly fewer women go on to become part of the workforce. Beyond that, even fewer are aspiring for high-level positions including board seats.
This trend is partly due to cultural factors that continue to limit women’s ability to join the workforce. For example, gender roles in Sri Lankan society include the expectation that women care for the family, and Sri Lanka lacks widespread, affordable childcare options such as day care centers. Many women are leaving the workforce as soon as they have children, unless they have other familial support or the means to pay for private support.
This is a systemic problem that is slowly being remedied by some government and private investment in early childhood care and education because they realize the potential for Sri Lanka’s growth with women in the workforce. We hope to see this shift in perspective continue.
Greater Awareness of and Support for Gender Parity – the Tone at the Top
It is of utmost importance to support gender parity at the board level and to harness the full potential of women in the workplace. Regardless of location, financials, governance, risk management and ethics, companies with gender-diverse boards demonstrate that they are ahead of competitors with less-inclusive boards. This realization is going to create more opportunities for women to serve on company boards in Sri Lanka in the future.
More needs to be done to raise awareness of these benefits and advocate for women on boards both through regulation and at the individual board level.
There is already some groundwork laid to promote women on corporate boards, such as the effort led by the Women Directors’ Forum (WDF) of the Sri Lanka Institute of Directors to put into place a voluntary progressive quota for Sri Lanka’s publicly listed companies. Introduced in the national budget proposals of 2019, it mandates having at least 30% of women on boards by 2024.
Other advocacy efforts include having one-on-one conversations with directors and C-level leadership to gain their support for further action at the individual corporate level around gender parity and diversity on corporate boards.
At the micro level, Sri Lanka needs:
Resources for Aspiring Women Leaders
Until recently, there was a lack of resources, focused training and mentorship for women entrepreneurs and aspiring leaders.
Formal initiatives in these areas – such as Women on Boards training and mentoring programs, educational and networking events, or entrepreneurship grants such as those from the U.S. program – will provide much needed support for women who have the desire for high achievement in the business sector.
The goal is to bridge the gaps – in education, experience or funds – that are preventing women from achieving their potential in Sri Lanka’s workforce.
Opportunities for Global Connection
Providing opportunities for Sri Lankan women board members to share their industry expertise – both locally and globally – will help to put Sri Lanka on the world map for women on boards.
Exposure to international forums and thought leadership through a network of powerful and experienced women around the world, enables members to learn from one another and discover new ways to innovate and add value to the organizations in which they serve.
Putting It All Into Action
To further these goals, WCD and its partners have launched a Sri Lankan chapter. The 16 founding members of the Sri Lanka chapter are some of the most dynamic, experienced, and powerful women in the country. They will work toward empowering women in Sri Lanka to strive for leadership roles through networking and educational opportunities. They will also work with regulators, public and private companies and other networks toward achieving gender parity.
A global organization based in the U.S., the WCD chapter in Sri Lanka will bring in an international perspective and provide the impetus, the awareness and tone at the top that will help drive female participation in Sri Lanka’s labor force, and in turn, help Sri Lanka achieve its growth aspirations and reach its potential.
WCD is working across the globe on furthering these objectives, and therefore the Sri Lankan chapter is well-placed in making a pivotal and lasting impact.