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FRA requires women’s representation on Boards of listed companies and companies operating in non-banking financial activities – Tuesday 17/9/2019

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• Dr. Omran:  FRA issues an amendment to listing rules to ensure women’s representation on corporate board
• Dr. Omran: FRA requires women’s representation on Boards of listed companies and companies operating in non-banking financial activities

Dr. Mohammed Omran – FRA’s Chairman issued two decisions no. (123 and 124) of 2019, including an amendment to listing and delisting rules to ensure women’s representation on Boards of listed companies and companies operating in non-banking financial activities. This comes within the framework of improving Egypt’s ranking in the Doing Business report. The issuance of this decision is also in line with FRA’s approach to achieve sustainable development and empowering women to be represented on the boards of directors of companies under its supervision.

FRA’s Chairman says that FRA’s Board had approved at its meeting yesterday an amendment to listing and delisting rules by introducing a clause in Article 6 of FRA’s Board’s decision no. 11 of 2014 on listing and delisting rules, namely the necessity of women’s representation on corporate Boards. Besides, amending decision no. 53 of 2018 on licensing requirements and rules of ownership of shares of companies operating in non-banking financial activities.

Dr. Omran stresses that women’s representation on corporate Boards achieves many national and international goals, including the implementation of the National Strategy for the Empowerment of Egyptian Women 2030, setting the target for women in senior management posts by 2030 at 30% and achieving Sustainable Development Goals.

FRA’s Chairman explains that international experiences related to gender diversity on corporate boards have shown better corporate performance. He adds that this is consistent with the positive indicators of a study conducted in Egypt by an international body to monitor the impact of women’s representation on corporate Boards in nearly 2139 Egyptian companies representing two groups of private and public companies listed on the Egyptian Stock Exchange.

Indicators showed that companies with women’s representation achieve higher profitability rates and better financial strength. Also, the study which was conducted during 2014- 2016 showed that companies with women on their boards achieved higher ROE’s of 2% , 4% in return on assets and 5% in return on sales. In addition, companies that take into account gender diversity on corporate boards prefer equity financing and are less reliance on debt.

Moreover, Private companies with female representation on boards and a workforce of both sexes (a mix of at least 25% females) have made remarkable progress in profitability measures; more than double the rate of profit growth and greater financial capacity. Also, Private companies showed 8% growth in return on equity and return on assets and 7% in return on sales.

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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