IFC Championing Women on Corporate Boards in Indonesia

Having more women as members of a company’s board of directors is not only an issue of gender fairness. According to Moez Miaoui, IFC’s Corporate Governance Program Manager in Indonesia, “Recent research in business and economics showed strong correlation between firms’ performance with the increase of women sitting the boards.”

A study by the Credit Suisse Research Institute compared the share performance of companies with market capitalization of more than $10 billion over the past six years, and found that those with female board members outperformed their counterparts with all-male boards by 26 percent.

The Women on Boards Initiative in Indonesia

In Indonesia, women make up more than half of the country’s workforce, yet, according to a report by McKinsey, only 6 percent have made it to the boards of listed companies. In Asia, this statistic is not unique but it is well below averages in Europe (17 percent) and the US (15 percent). 

To raise public awareness on the issue, IFC, a member of the World Bank Group focused on private sector development, hosted the first roundtable discussion last March 6 on the role of women on corporate boards in Indonesia.

Jointly organized with the Center for the Study of Governance of the University of Indonesia, the Women Corporate Directors association and Institut Pengembangan Manajemen Indonesia, the event was attended by more than 60 business leaders. The panelists, all female board members and prominent business owners, shared their experiences of breaking the corporate ceiling and discussed what they perceived as obstacles to greater access for women at the top of the business ladder.

In the future, this initiative will focus on training to empower and build the capacity of women aspiring to reach top positions as well as promoting specific activities with companies intending to seize the benefits of gender diversity.

Changing the mindset of companies and general public on women’s role

“Women still struggle when trying to balance their professional and personal lives. We need to work more on educating the public and communicating to society,” said Natalia Soebagio, a businesswoman and lecturer at the University of Indonesia. “Some men are still intimidated by successful women.”

IFC believes women are a critical force toward achieving equitable economic growth and that gender diversity is a vital factor in successful boards. IFC has been actively pushing for increasing women participation in boardrooms and plans to double the percentage of female directors on its own 98-member board to 30 percent by 2015. 

“In East Asia and the Pacific, we have to work on education and shifting mindsets, improving public support services and encouraging businesses to identify and retain female talents in order to increase the number of women on company boards,” said Moez Miaoui.

Interestingly, the debate around women as board members has shifted from an issue of fairness and equality to a question of superior performance. If gender diversity on the board implies a greater probability of corporate success, then it is in the own companies’ interest to pursue such an objective regardless of any government directive.

Natalia Soebagio believes that as more women become business owners, the role of women in the corporate world will improve. “If you look at small and medium companies, there are a lot of women running them. Supportive groups, supportive friends, supportive family, all are very important. Now, the sky is the limit, we can be whatever we want to be,” she said.