Women have come a mighty long way since the first women’s rights convention held in 1848 (dubbed the Seneca Falls Convention). During the meeting, when one of the leading women asked the assembly to pass a resolution asking for women suffrage, many of those present opposed the idea.
Sensing defeat, the only black man present (Fredrick Douglas) spoke in favour; he said that he could not accept the right to vote as a black man if women could not also claim the same.
After these powerful words, attendees passed the resolution and thus begun the forward march towards equality. Fast forward 171 years later, it’s unfortunate that no country in the world has achieved gender parity.
For Africa, according to the 2018 Global Gender Gap report, the score stands at 66 percent (below the global average of 68 percent meaning a 34 percent average gender gap remains to be closed. If Douglas knew this, he would be turning in his grave.
Granted, meaningful progress has been made - two sub-Saharan countries feature in the global top 10 – Rwanda (sixth ) and Namibia (10th) having closed 80 percent and 70 percent of their gender gap—however, most African nations lag behind.
To paint the picture more clearly, lowest-ranked countries in the region, DR Congo and Chad, have yet to close more than 40 percent of their overall gender gaps and out of the 33 African nations covered by the study, only 12 have increased their scores year-on-year.
Furthermore, the report estimates that with the current rates of progress, the continent would take 135 years to close the gender gap.
At home, the same difference exists. A report by the Kenya Institute of Management on the Nairobi Securities Exchange (NSE)-listed firms shows that women account for just 26 percent of management positions and only 21 percent of board members are women. We also know that just a third of NSE investors are women.
But is there a case to agitate for more women economic participation? Most definitely. In fact, a recent report by IFC “Moving toward Gender Balance in Private Equity and Venture Capital,” shows that when companies have gender-balanced teams, their returns can be as much as 20 percent higher.
To add on this, research by Quantopian, between 2002 and 2014, which compared returns of Fortune 1000 companies led by Female executives to those of the S&P 500, showed that these firms returned 226 percent higher.
Almost at the same time, Nordea, a financial service firm, analysed nearly 11,000 publicly traded companies across the globe over the 2006-2016 period.
The results: those with a female CEO or a woman head at the board level, on average had a 25 percent annualised return since 2009, more than double the 11 percent delivered by the MSCI World Index.
While it’s not given that women-led businesses would always trump those led by men, nonetheless, the results are crystal clear: firms with a woman running the show perform far better than the market. This is not a tip.
But perhaps, investors should start paying attention to women-led businesses listed at the NSE. More importantly, the country (and the continent as a whole) better recognise the merit of women in leadership roles – and capitalising on this known, demonstrated advantage.
The writer is the Managing Director of Canaan Capital Limited Capital.
The views expressed in this article are of the author.