Women Uplift Performance of Companies, Admits SECP

Not differently from other parts of the world, Pakistani women have shown prowess in almost all existing sectors and companies with women included in the board of directors gained higher profits as per a report by the Security and Exchange Commission of Pakistan (SECP).

Prepared by Sadia Khan, SECP Commissioner, the report maintained that companies with women board members showed growth in profits, and they had a beneficial impact on their respective firms in Pakistan.

“There seems to be a correlation increased female presence on boards and the company’s performance over time as exhibited by the Return on Assets (ROA) and Return on Equity (ROE) of companies with and without women”, Sadia Khan wrote.

SECP has asked listed companies to formulate and implement gender diversity policies to retain talented women in Pakistan.

According to the report, under Section 154 of the Companies Act 2017, all companies of public interest are required to have a representation of women on the boards.

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The commission had introduced the Listed Companies (Code of Corporate Governance) Regulations 2019, which requires to have at least one female board member.

As per report, in 2019, firms with women on board had a 2.8% return on assets, while companies without women on board had a 1.7% return on assets.

Similarly, such companies recorded a capital gain of 14.8% while those without women on the board had a profit margin of 9.4%.

The report further suggested the firms should encourage the meaningful presence of females in boardrooms, not tokenism.

“Boards should look beyond the obvious candidate pool present within their close networks”.

The report put forward to increase the weightage of diversity on boards while giving corporate awards.

It also recommended adequate networking opportunities to be given to senior women by nominating them on various industry forums.