Women in Finance: The leaking pipeline · ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice

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Women in Finance:The leaking pipeline

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 200,000 members and 486,000 students in 180 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 101 offices and centres and more than 7,200 Approved Employers worldwide, who provide high standards of employee learning and development.

Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence. ACCA is currently introducing major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability.

More information is available at accaglobal.com/middle-east/en.html

© The Association of Chartered Certified Accountants 2018 - Middle East

About ACCA

We would like to thank Deloitte Middle East for running the research for the ACCA as shared in this report.

Alongside this, we thank all our contributors as quoted throughout the report for their invaluable insight and

perspective.

The data in this report has been drawn from both primary and secondary research which has involved discussions, research undertaken at our women in finance forum, desk based research and third party research as quoted throughout. All statistics quoted were correct at the time of publishing this report.

Gender diversity has long been on the agenda in the Middle East and across the globe, as companies aim to place emphasis on endorsing gender parity. However, despite this effort there has been little material action which still contin-ues to see issues such as the gender pay gap, inequality and lack of women in senior decision making roles hit global and regional headlines.

If the outrage surrounding the film industry globally and the political environment weren’t worrying enough, the Gender Gap report showed that we are actually going backwards in relation to parity1. Instead of taking a mere 170 years to close the gap at our current rate of ‘progress’, it is projected to take 217 years. Within the Middle East region, the UAE was the most advanced being positioned 120th this year (127th in 2016), followed by Bahrain (+5) and the Kingdom of Saudi Arabia (+3), whilst other countries remained relatively unchanged or weakened their position such as Qatar which ranked in at 119th in 2016, declining to 130th in 2017.

By now, it’s also well established that women are paid less than men, and receive fewer opportunities for advancement. This has been further reinforced in key markets such as the UK, which has recently made it mandatory in accordance to the reporting rules for all companies with over 250 employ-ees to now publish their salary scale, in order to further drive transparency and address the issue2. At ACCA, we will be publishing our gender pay scale rates in the near future too, in order to not only provide a qualification that is accessible to all, but a working environment that is transparent, fair and equal.

Equality for women in the labour force would add up to $28 trillion to the global economy by 2025, according to a report by the McKinsey Global Institute. In a global economy calculated to be some $100 trillion and currently forecast to grow only modestly, this is a significant opportunity and further highlights the untapped talent that continues to sit within organisations, both globally and in the Middle East.

ForewordLindsay Degouve de Nuncques

Head of ACCA Middle East

Whilst the public sector continues to promote gender parity from the UK, with Women and Equalities Minister, Justine Greening stating “helping women to reach their full potential isn’t only the right thing to do, it makes good economic sense”2, to the UAE which is keen to empower women by encouraging them to assume leadership positions – the notion continues to be front of mind for policymakers around the world. In the UAE, the Federal Cabinet consists of 30 percent females who assume leading positions in government, yet despite this positive public sector progress, we still continue to see a decline within private sector organisations.

In order to drive this change which not only impacts the bottom line significantly, but creates an inclusive workplace representative of societal demographics, the role of finance is imperative - as it shifts from a playing a financial role to a more strategic role in the Middle East. Whilst our 2017 report (Women in Finance: Beyond the numbers) found that only 2 percent of board positions in the Middle East were represented by females, we need to ensure that we continue to endorse, champion and promote female leaders to the board. Too often in the Middle East, the board has a majority representation of men, therefore they are critically as impor-tant to creating change for the future of the economy, their colleagues, their children who will become future leaders and the wider society in which they live and operate within.

With the CFO becoming known as the change agent across various industries and seen as the second CEO, finance pro-fessionals can take a clear stance on promoting, supporting and nurturing this change in the Middle East. Although, the gap might be larger than that we had hoped – as finance professionals if we don’t lead the change now, we will continue to be in the same position.

The world is changing at a rapid rate due to globalisation, technological movement and generational shift, therefore it is imperative that we look beyond the numbers, quotas and truly embrace a diverse workforce to safeguard the future of finance, women and society to close the ‘leaking pipeline’ and capitalise on the untapped talent pool in the Middle East.

1. The Global Gender Gap Report 2017, World Economic Forum 2. Gender pay gaps must be declared by UK companies, BBC News3. How advancing women’s equality can add $12 trillion to global growth, McKinsey Global

Despite higher education rates, the region has one of the lowest rates of female labour force participation compared to the rest of the world. Women make up 49 per cent of the population and, in some countries, up to 63 per cent of university students. However, they only represent 28 per cent of the labour force compared to over 50 per cent in the US, according to the World Bank4.

Whilst the recent gender gap report from the World Economic Forum highlights that some countries in the region have remained stagnant, there are others such as the UAE, Saudi Arabia and Bahrain, who have made significant strides.

The Saudi Vision 2030 strategy set by Crown Prince Mohammed Bin Salman aims to increase female participation in the workforce from 22% to 30% in all sectors by 2030. We also recently saw the announcement of the landmark reform, which permitted women in Saudi Arabia to drive for the first time, followed by announcements of dual-gender cinemas and public sector roles for females at the international airport. Whilst for some countries this might seem like simple measures, the welcomed change is working towards addressing and removing the gender barriers and cultural stereotypes that once existed. By taking such action, the Kingdom of Saudi Arabia is implementing the right measures to ensure the public sector promotes gender parity, in a nation which was once male dominated.

Elsewhere in the UAE, female participation in the labour force continues to grow. Although the rates of increase to leadership positions is marginal to that reported in our 2017 report, the country still continues to make significant strides in comparison to neighbouring economies. The country’s Vision 2021 aims to make it one of the world’s top 25 countries for gender equality.

Policy intoPractice

4. World Government Summit: UN-backed hub in Dubai aims to connect Middle East women to international trade, The National5. Gender Balance Guide, Gender Balance Council, UAE

In an effort to encourage more women to look past cultural biases or restrictive regulations, the Gender Balance Council in the UAE have launched their first Gender Balance Guide (developed by OECD)5 for organisations in the UAE to map and measure their diversity policies, to further encourage not only public sector but private sector change too.

The guide identifies the key levers for change (figure1)5 as being commitment and oversight; policies and programmes; personnel engagement; leadership and communication. The guide sets out some key levels of progress and the essential steps required to promote gender balance within organisations (figure 2)5.

Such guidance from policymakers and the public sector provides further encouragement to private sector organisa-tions on how to redefine and align their processes to promote an inclusive culture. Whilst policy alone cannot drive change, it certainly sets the right tone from the top to drive the vital change required within the private sector to address the current position.

© OECD 2017 | Gender Balance Guide | Actions for UAE Organisations | Page 19

BACKGRO

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gender balance. It also identifies possible resources that can be exploited in support of the UAE’s own work and

recommended approaches to attain gender balance in the UAE context.

There are five key levers for achieving gender balance:

1. Commitment and oversight

2. Integrating gender into policies and programmes (e.g. Human Resources Management policies, Gender

Responsive Budgeting etc.)

3. Promoting gender sensitive engagement of personnel

4. Improving gender balance in leadership

5. Gender sensitive communication (see Figure 1).

The pre-requisite for addressing each of these areas is the elaboration of a strategy for gender parity in the workplace

that can either be linked to or incorporated within an organisation’s overall strategy. It should align with the national

vision and strategy of the UAE and elaborate how it does so.

Figure 1. Key levers for achieving gender balance

An important note on using this guide

Achieving gender balance results seeks to bring about meaningful organisational change which requires action in

many areas. However, it is important to highlight that not all the recommended actions need to be undertaken by

all organisations, nor do all actions have to be implemented simultaneously. What matters is a planned approach,

tailored to the needs of each organisation, that delineates which actions should be taken and in what order.

Commitment and Oversight

Policies & Programmes: HRM & GRB

1.

2.

Leadership4.

Communication5.

Personnel Engagement3. GENDER

BALANCESUCCESS

Figure 1. Key levers for achieving gender balance5


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Figure 4. Steps to implement gender balance in an organisation

EQUITY AND INCLUSION LENS HANDBOOK CANADA

Leaders can benefit from reflecting on the kinds of questions posed by other countries striving towards gender balance in their organisations. In 2015, the Canada’s City of Ottawa developed an “Equity and Inclusion Lens Handbook” that lists straightforward questions about inclusion, such as: Who is not included in the work you do?

are used to promote reflection on all forms of diversity, they can also be applied to gender and used to promote reflective thinking on gender balance.

Based on this experience, the UAE Gender Balance Council could: • Study and cascade questions relevant to the national gender balance indicators (GBIs) to the federal and

balance goals.• Define mechanisms and techniques that can support organisations in the implementation process of initia -

tives that promote the gender balance agenda.

Organisations can support the above by: • Adhering to the mechanisms and techniques defined by the UAE Gender Balance Council •

progress

Source: City of Ottawa (2015), “Equity and Inclusion Lens Handbook,” City of Ottawa and City for All Women Initiative (CAWI) 2nd ed., http://docu -ments.ottawa.ca/sites/documents.ottawa.ca/files/documents/EI_Lens_Handbook_2015_FINAL_EN_WEB_2.pdf.

STEP 1

STEP 2

STEP 3

STEP 4

STEP 5

Build personal awareness

Create the conditions for success

Instill gender balance across the organisation

Define what needs to be done

Encourage reflective leadership

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Figure 2. Steps to implement gender balance in an organisation5

Equality for women in the labour force would add up to

$28 trillion to the global economy by 2025

Instead of taking a mere 170 years to close the gap,it is projected to take

217 years at the current rate of progress

UAE Vision 2021 aims to make it one of the world’s

top 25 countries for gender equality

Country 2016 ranking 2017 ranking Variance

QatarUnited Arab EmiratesKuwaitBahrainEgyptOmanJordanLebanonIranSaudi ArabiaSyriaYemen

119127128131132133134135139141142144

130120129126134

Not included135137140138142144

-11+7+1+5-2-

-1-2-1+3--

Regional ranking: World Economic Forum: Gender Gap Index1

The next generation of women will not only be competing with their male counterparts, but with dynamic technologies such as Artificial Intelligence and a relatively new generation of robots too.

A recent study by Stratgy&6 found that women who are breaking boundaries in the GCC all share three things in common which are:

Constant improvement“A refusal to accept the status quo, in themselves, their organisation, or their region. This manifests itself in unending evaluation and improvement.”

Studied discomfort“A willingness to go outside their comfort zone, professionally and personally, particularly when taking on new challenges that would benefit their organisation.”

Quiet confidence “A certainty in their own abilities and recognition that when they are inevitably called upon to substantiate the value of their work, they will be prepared.”

The study found that by cultivating these qualities in younger women, and creating an environment in which they can display them, today’s leaders can encourage a new generation to be ready to take their place.

6. The Future of Women Leaders in the Middle East, Strategy&7. Generation Next, ACCA Global

This generation is also creating the requirement to have fluidity in the movement of talent as noted in our Generation Next report7. Employers need to develop effective strategies to attract, develop and retain talent in view of the skills they have internally and with an assessment of the current and future needs of the organisation, which includes addressing the leaking pipeline and implementing policies to mitigate this ongoing risk.

Many research studies have shown that the future female finance leader do not possess as many self-imposed stereotypes, which alludes to a more encouraging position. Vasantha Valiveti, ACCA student states “I believe the number of women who enter senior management positions in the future will increase significantly. The young women of today who are still studying are very ambitious and are not going to sit still or remain as homemakers. They are ready to conquer the finance world.”

This sentiment is also favored by their male counterparts, with views stated that with “legislations favoring women in boards being passed globally, and more awareness in the public being created, the number of women entering senior leader-ship positions in the coming future definitely will be increasing significantly. This in turn will also set a tone for generation Z and bring about further improvements in the dynamics of women in boards in the Middle East” states Rahul Chokshi, ACCA member.

The female millennial has a higher level of workplace partici-pation, education, career ambition and career confidence. In order to ensure they are equally as supported to leadership positions, organisations should drive mentorship schemes, flexible working for all, talent development programmes and more active awareness campaigns across the Middle East region.

As outlined in the figure 3 and as discussed in our working group series hosted in the UAE, there are a number of actions that are advised for both individual finance leaders and businesses to encourage both the current and future leaders to the top.

Encouraging the Next Genof Finance Leaders

Regional ranking: World Economic Forum: Gender Gap Index1

“Companies with diverse workforces outperform their homogeneous peers. More importantly, such companies are better positioned to adapt to a constantly changing business environment. Who better to lead them, than women, who are known to have the highest levels of emotional intelligence.”

Rahul Chokshi, ACCA Member


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Recommendations for

IndividualsRecommendations for

Businesses

We need to start setting our own boundaries and aid in changing perception

Women are not as ‘politically astute’ in the workplace as men – this was deemed critical

We need to ask is the board shying away from recruiting women, or are women shying away from the board?

Women need to ‘telegraph’ what they are doing more

The need to increase confidence in both current and future finance leaders is key

As individuals, we need to identify how we can make an impact to enhance profitability and add additional value (other than the financials alone) by truly understanding the business (including the operating model)

Managers require more training to ensure they support and endorse diversity

Mandatory requirement should be in place to encourage a diverse attendance for all training programmes, which is proportionate to the organisation

Clearer and more structured succession planning is required (with continuous review needed)

HR departments should ensure that all policies such as flexi-time are living policies and not just ‘written’ policies for all

There is a need for more mentoring programmes and role models

There is a lack of understanding on the skills & competencies required to get to board level roles, further clarity should be provided by the current board

Figure 3. Recommendations for business and individuals

The finance function and industry is key across the region, as it moves from playing a once transactional role to a more strategic imperative. The finance function and leader of the future will be fundamental in respect of voicing and endorsing diversity, as they become much more centrally aligned to the business and the CEO.

We researched finance professionals to gain their perspective on Women in Finance and how we can ensure a more inclusive finance function in the future.

There are still not enough women on boards across the Middle East regionOur research unsurprisingly found that 76 percent of finance professionals believe that there are still not enough women on boards in the Middle East, with only 8 percent agreeing that there is adequate representation (figure 4). 71 percent of our respondents believe that businesses across the region are not doing enough to support women into board positions (figure 5). This presents a significant opportunity for finance professionals to drive and carve change within their organisations, given numerous research studies have illustrat-ed the direct impact a diverse workplace and leadership has to the bottom line and overall financial performance.

How are we currentlypositioned for the future?

71% believe that businesses are not doing enough in the Middle East to support

women into board positions

1. There are enough women on boards across the Middle East region

0%

8%

4%

12%

76%

0 10 20 30 40 50 60 70 80

Strongly disagree

Partly disagree

Neutral

Partly agree

Strongly agree

Strongly agree Partly agree Neutral Partly disagree Strongly disagree

Figure 4. There are enough women on boards across the Middle East region

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10

20

30

40

50

60

70

80

Strongly disagree

Partly disagree

NeutralPartly agree

Strongly agree

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71%

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Figure 5. Businesses are supporting women to take on leading roles on the board

Organisations need to enhance the learning and development provided to aid women in achieving board level roles61 percent of our respondents stated that women are not receiving the relevant learning and development within their organisations to take on leading roles on the board, with only 11 percent agreeing (figure 6). This clearly highlights that organisations in the Middle East need to do more when it comes to providing high potential employees with the adequate leadership training. It is essential for the relevant development programmes to be endorsed and provided by organisations to ensure the leaking pipeline can be effective-ly addressed and the future of the board fortified to encourage the next generation of leadership.

This is further illustrated in our research which found that overall the region was beginning to embrace women into leadership positions with 67 percent partly agreeing and 8 percent agreeing (figure 7). Therefore, organisations need to play their part in attracting, developing and training this vital talent pool now by providing the relevant learning and development, if we are to strengthen our future position.

3. Women are receiving the relevant learning and development within their organisations to take on leading roles on the board

Strongly agree

Partly agree

Neutral

Partly disagree

Strongly disagree

28%

61%

11%

Figure 6. Women are receiving the relevant learning and development within their organisations to take on leading roles on the board

0 10 20 30 40 50 60 70 80

Strongly disagree

Partly disagree

Neutral

Partly agree

Strongly agree 8%

67%

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17%

8%

4. The region is becoming more embracive of women representing at board level


Figure 7. The region is becoming more embracive of women representing at board level61% stated that women are not receiving

the relevant learning and development in their organisations to

take a leading role on the board

There is a mixed viewpoint on the introduction of target quotasWithin the GCC, the UAE Cabinet issued a ruling in 2012 that obliged all state owned corporations to include at least one female board member with 78 per cent of our respondents agreeing last year that target quotas are necessary. However, this year our research found that there was a mixed view on the introduction of target quotas with 32 percent agreeing, 14 percent partly agreeing and 36 percent disagreeing that they should be in place (fi gure 8). This provides an interesting and diverse viewpoint and leads us to believe that whilst this introduction ensures women are represented on the board of listed companies, the belief that they should be represented due to merit alone still remains strong. This is further veri-fi ed by our research fi ndings with almost 75 percent of our respondents stating that they do not think quotas should be introduced into the private sector.

The current regional landscape in relation to female leaders within the public sector is improving, however as illustrated and found in our research, businesses and leaders within the private sector are still lagging behind with signifi cant improvement needed (both globally and locally). As millennials enter the workplace and shape the workplace of the future, the time to change has never been more pertinent than now.

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Strongly disagreePartly disagreeNeutralPartly agreeStrongly agree

32%

14% 14%

36%

5%

5. Target quotas are good to having women presented on the board for listed companies.


Figure 8. Target quotas are good to having women presented on the board for listed companies

6. Target quotas should be introduced for private companies too (and not only for the public sector and listed companies )

Strongly disagree

Partly disagree

Neutral

Partly agree

Strongly agree

8%

13%

4%

50%

25%

Figure 9. Target quotas should be introduced for private companies too (and not only for the public sector and listed companies)

With the CFO becoming known as the change agent across various industries and seen as the second CEO, fi nance professionals can take a clear stance on promoting, supporting and nurturing this change in the Middle East. Although, the gap might be larger than that we had hoped – as fi nance professionals if we don’t lead the change now, we will continue to be in the same position.

75% believe that target quotas should NOT be introduced into the private sector, despite them being in place for the

public sector in the UAE

For the youngest in the profession, starting their career in the profession remains a smart and relevant choice. They take a mature view of the opportunities that a finance career presents. They are attracted to the profession not only for its long-term career prospects but also for the opportunity to develop and use a broad range of skills, both within and out-side of finance. Generation Next want to attain a wide-rang-ing set of capabilities and they see these as valuable building blocks for organisation leaders in the future.

With this regional sentiment and the rise of the millennia generation entering and creating the workplace of the future, we do envisage seeing positive regional change. This was further supported by our research with 100% of our respond-ents stating that the region would see significant improve-ment in relation to the current gender gap in the Middle East region (figure 10).

Females and males are generally in agreement when it comes to the attractiveness of the profession, the roles they hold, job satisfaction, and career aspirations. Both are attracted to the finance profession for the same reasons, with long-term career prospects being most important as found by our Gen-eration Next research. Their career progression to date is the same, with both genders proportionately in the same roles in a similar number of organisations and with a similar degree of job satisfaction.

board level (within the private sector)

0 20 40 60 80 100

Strongly disagree

Partly disagree

Neutral

Partly agree

Strongly agree 0%

100%

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Figure 10. Within the next ¬five years, we believe that there will be a signifi¬cant increase of females representing at board level (within the private sector)

Leading from the front for the future

This provides a positive future reflection for the region, however to ensure this sentiment continues current finance leaders – both male and female need to ensure they continue to play an equal part. Whilst current female finance leaders work towards achieving board positions, it is also imperative to drive change through the entire chain.

By tapping into Generation Next’s ambition for growth and international work experience, employers can acquire more geographically diversified talent, and at the same time provide much needed development opportunities for their younger employees who aspire to leadership roles in larger organisations ensuring the leaking pipeline is diminished for generations to come.

“Creating the leaders of tomorrow is an on-going critical strategy for firms in the Middle East. The strategy has to be set from the top, with a culture that embraces the commercial and social benefits of diversity. We have to measure this progress too – after all, what’s not measured can’t be managed”

Cynthia CorbyChair of the Women in Finance Forum Partner at Deloitte Middle EastACCA Member

The information contained in this publication is provided for general purposes only. While every e�ort has been made to ensure that the information is accurate and up to date at the time of going to press, ACCA accepts no responsibility for any loss which may arise from informa tion contained in this

publication. No part of this publication may be reproduced, in any format, without prior written permission of ACCA © April 201 7

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Women in Finance: The leaking pipeline · ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice