Women form 21% of all board appointments in the banking sector; directors with tech skillsets lacking – study finds


A banking sector review conducted by Metis Decisions has revived the perennial issue of women under-representation at the highest levels of decision-making. The purpose of the review was to assess the ‘battle-readiness’ of banks from a corporate governance standpoint as the financial sector recovers from a period of turbulence amidst an increasingly volatile business environment. The 2019 report show, among other things, that women constitute 21% of the total number of board members across the 20 universal banks that were reviewed. The data also point to a paucity of technology-related skillsets cum experience possessed by board members – which speaks to the board’s capacity in driving accountability within the risk management function, specifically cyber risk.

The Broader Context

Weak corporate governance was flagged as one of the chief culprits behind the rampant related party transactions and other agency problems which led to the resolution (and consolidation) of some banks in 2017/2018. Since then the Bank of Ghana introduced the corporate governance directives to help protect stakeholder interests and restore confidence in the financial sector. Two years on, what has been the impact and what performance gaps still exist, from a corporate governance standpoint? Metis Decisions Limited conducted a sector review to answer these specific questions.

What are the key questions?

The research began with data collection from three sources – company websites, 2019 annual reports, and other regulatory materials (including BOG’s Corporate Governance Directive 2018). Three (3) key questions formed the basis of investigation:

  1. Broad Compliance: What is the current state of institutional compliance with Corporate Governance Directive 2018? Three compliance metrics were used (a) board composition and structure, and (b) qualification and experience.
  2. Gender diversity: Two related questions were asked (a) are women adequately represented at the board level, and (b) is there gender parity in terms of sub-committee leadership positions? At least a 40-60 ratio is considered tremendous accomplishment considering the historical antecedent of gender disparity.
  3. Cyber security: What is the current state of institutional compliance with Section 4(3) of the Cyber and Information Security Directive 2018?

What are the key issues?

  • Board Composition and structure: With regards to board structure, the focus was on number of board members. This, we believe, directly impact the quality of engagement at the sub-committee level. In terms of experience, we looked for a reasonable balance between the humanities, science, technology and engineering related backgrounds at the board level. We especially scanned for persons with technology backgrounds (education and experience). This is very crucial given the increasing complexity within the business environment that banks operate.
  • Gender diversity: The focus was on both the overall number and percentage of women chairing boards or sub-committees.
  • Cyber security: The goal was to find out the state of implementation of Section 4(3) of the Cyber and Information Security Directive.

Why are these questions/issues important?

The link between board dynamics and firm performance is a matter that has long occupied the attention of scholars and organizational researchers. Various schools of thought are far from reaching a consensus, albeit the preponderance of evidence seem to suggest that board composition, size, diversity and dynamics all affect performance outcomes.

Two points of caution that is noteworthy at this point: first, we make no ‘sweeping’ claims about the corporate governance status of individual banks featured in this review, and further urge all readers to consult the source materials in order to form their own judgment. Secondly, the data for analysis was gathered from annual reports ending December 2019. Data from websites were accessed as at April 02, 2020. No interviews were conducted. There is some limitation in relying on secondary data sources only. That fact needs to be considered when drawing conclusions. This article present a summary of the findings (see infographics) and tease out key insights that we hope drives fresh conversations at board meetings. The article concludes with a call to action for the Governance and Nominating sub-committee, or any board committee (however name) responsible for board self-evaluation, recruitment and succession.

Call to Action

Cyber risk is increasingly becoming an important domain within the risk management framework. We foresee cyber risk dominating the regulatory agenda going forward. We consequently argue, that expanding the pool of expertise at the board level in order to add new perspectives, is a strategic necessity. Suffice to say that adding new perspectives is not mutually exclusive with ramping up women representation at the board level. We advise Governance and Nominating Committees to engage more women, particularly those with expertise in technology and sufficient leadership experience to chair the entire board or lead board sub-committees.

 About Metis Decisions Limited

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