Women and the mosaic of Mid-east management

Citation

Shubber, K. (2008), "Women and the mosaic of Mid-east management", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 1 No. 4. https://doi.org/10.1108/imefm.2008.35201daa.001

Women and the mosaic of Mid-east management

Article Type: Editorial From: International Journal of Islamic and Middle Eastern Finance and Management, Volume 1, Issue 4

Recent research findings on aspects of management within the Arab World make some interesting reading. In addition to the issue of women’s role in business management, the region faces some acute challenges, at a time of rapid change and multi-faceted risks confronting firms of all sizes – and in every corner of the globe.

While the spectacular advance in oil revenues is having a positive impact on the expansion of existing firms and the burgeoning of new ones, business culture and managerial attitudes are changing more slowly. Burning questions such as modern guidelines on corporate governance, utilisation of quantitative techniques in managerial decision-making, objective selection of personnel for key executive positions, and ensuring orderly succession on the basis of merit, still have some way to be fully recognised and taken on board.

The research referred to above was undertaken jointly by TNI and Hawkamah. The first is an Abu-Dhabi investment bank, while the second is a Dubai-based institute focusing on corporate governance. The results of this study were published earlier this year, and reported widely in the business media.

Family ownership

It is estimated that over 90 per cent of private-sector businesses in the Gulf region remain family-owned. And, it is possible to hypothesise that other countries in the Middle East and North Africa (MENA) region exhibit a similar pattern. This is despite the fact that the region as a whole remains receptive to the activities of foreign corporations, which tend to function in accordance with styles, strategies and manners set by their head offices, with regard to critical aspects like selection of executives, remuneration, succession, and other key issues.

The TNI-Hawkamah study indicates quite plainly that boards of Middle-Eastern public companies are strongly dominated by family ties. Some three quarters of listed companies in the region have at least two board members from the same family, while not infrequently a single family “owns” anything between 50 and 75 per cent of a company’s board.

On this basis, it is probably fair to argue that tradition can assist small and medium-sized businesses in the transition process. Yet, difficulties may arise when older members of the family remain in charge at a time when new attitudes and skills are required for running a modern enterprise.

It is not uncommon for friction to arise when younger members of the family wish to move forward, while older ones exhibit hesitation to accept change. The average size of the family in the Arab World adds an extra problem, in that those belonging to second and third generations frequently include a large number of cousins and brothers/sisters, thereby increasing the chances of major frictions, which in turn impact on performance.

Clearly, therefore, the sound way forward is to espouse merit as the fundamental criterion in selection and senior appointments. The adoption by firms of internal guidelines or constitutions on various aspects will also help to resolve many tricky issues, including smooth transition of key personnel.

Role of women

The other main issue is the role of women in business and the general economy. Estimates put the participation of women in the economies of the Arab World at 30 per cent, compared with a world average of 55 per cent. Yet, it is quite clear that the profile of Arab business-women has been increasing, and their influence on the private sector is becoming more pronounced.

According to the TNI-Hawkamah research, women fill only 1.5 per cent of the seats on the boards of public companies in the six nations making up the Gulf Co-operation Council. However, this general picture masks an eye-catching diversity across the region, with a glaring contrast between the more conservative nations and the relatively outwardly ones.

In Kuwait, women make up 2.7 per cent of boards of public companies, while claiming 2.3 per cent in Oman. This compares very well with some Western countries, such as Italy and Japan, as the comparable figure in the former is 2 per cent; in the latter a mere 0.4 per cent. Nonetheless, the parallel figure in the US is 13.6 per cent, and in Norway 22 per cent.

While Kuwait and Oman can be viewed as two shining examples of progress on this front, other Gulf States do not fare so well. In Saudi Arabia, the TNI-Hawkamah study shows that women comprise only 0.1 percent of board seats of public companies, compared to 0.3 percent in Qatar and 0.6 percent in Abu Dhabi.

Kadom Shubber