The United Arab Emirates, home to Dubai and Abu Dhabi stock markets, will require at least one female director on the boards of all listed companies, as firms around the world face pressure to boost gender diversity.
The requirement came into force after the Securities and Commodities Authority’s meeting on Sunday, according to the National newspaper, which cited the market regulator.
The five biggest companies listed on Dubai Financial Market PJSC and the Abu Dhabi Securites Exchange have 84 board members, but only three women, according to data on the exchange websites.
“We previously used to accept explanations if there wasn’t compliance, but now we are moving to make female representation compulsory,” the regulator’s Chief Executive Officer Obaid Saif Al Zaabi was quoted as saying by the National. “So now there must be at least one female member on the board of any listed company.”
The UAE’s central bank has already signed a memorandum of understanding with Aurora50, a firm focused on gender-balanced boardrooms, to work toward raising the number of women on the boards of both public and private companies in the country.
The region has “come a long way in the past decade,” said Racha Alkhawaja, Dubai-based group chief distribution and development officer at Equitativa Group and the decision to bring at least one woman on boards of listed companies “comes under the whole topic of quotas.”
While women are present on the boards of 28 out of 110 listed companies in the UAE, they make up only 3.5% of all board positions, according to data compiled by Aurora50.
“Quotas at this early stage might be necessary to ensure that companies do the extra effort in finding those women,” Alkhawaja said. “There are still a lot of women that are invisible. They are there, they do really well, they’re very senior, they’re very prominent, but are still invisible.”
In India, where a law passed in 2013 makes it mandatory for companies to have at least one female board member, women held 17% of the positions, Aurora50 said. France had the highest percentage of women on boards in 2020, with 43.6%, according to data gathered by BoardEx.
In the UAE, the regulator has not yet made it mandatory for listed firms to disclose equality and social governance metrics, but has recently encouraged companies to start reporting.
(Updates throughout with details)