In an effort to empower Emirati women and to encourage them to play a greater role as board members of listed companies, the United Arab Emirates’ Securities and Commodities Authority (“SCA”) has required all UAE listed companies to have at least one female board director.
Although it is reported that women sit on the boards of 28 of the 110 (26%) listed companies in the UAE, women only hold 3.5% of all board positions. As such, this new SCA requirement seeks to increase female representation at the highest levels of listed companies. Previously, the SCA set a target for companies to achieve 20% female representation on their boards and required those companies that fail to attain this level to explain the reasons for any shortfall.
While female board representation in the UAE may be low, the World Bank has reported that the UAE has the highest level of women participating in the workforce, 57.5% in 2020, of any country in the Middle East and North Africa region.
Legally mandated gender quotas on corporate boards are not new developments, as Norway was the first nation to enact a legally mandated gender quota in 2003. In the years since, Norway enacted its pioneering gender quota, and many other countries have followed suit. Across Continental Europe, Belgium, France, Germany, Iceland, Italy, the Netherlands and Spain have all passed laws establishing quotas for women on corporate boards. The United Kingdom has passed similar legislation as well. Outside of Europe, Australia, Brazil, India, Israel and Malaysia also have established legally mandated gender quotas or gender targets. It is likely that the global trend to increase gender equity and women board membership will continue.
Before the first gender quota came into effect in 2003, the problem of female under-representation was strikingly apparent. While the proportion of women in the workforce was continually increasing in most jurisdictions, this growth did not translate into increased representation on corporate boards. We continue to follow developments related to all aspects of the employment relationship in both US and non-US jurisdictions and will provide timely analysis accordingly.