How good are Nigerian finance companies at gender diversity? Nordic Africa Institute guest researcher Anazuo Salihu is studying the performance of 41 major Nigerian deposit money banks, insurance companies and mortgage banks over the past ten years. While many companies at first glance appear to be gender balanced, a closer examination often shows a different picture, Salihu says.

Salihu, who has a master’s in forensic accounting and lectures at Prince Abubakar Audu University in Kogi state, Nigeria, recalls when she asked to see the salary slips of the board members of a Nigerian finance company. According to the company’s official information, all board members – men and women alike – were paid the same salary. However, the company would only make public the salary of its (male) CEO.

“How was I supposed to verify the information I was given without documentation? This is why proper disclosure is so important. It is the only way for stakeholders to distinguish real gender equality from false claims aimed at boosting the company’s reputation,” Salihu says.

The example illustrates a common problem, according to Salihu. While companies listed on Nigeria’s stock exchange are required to publicise information not only about financial records, but also about factors such as gender performance, existing legislation is too weak to lead to consistent, high-quality reporting, she argues.

“It is not enough to have the information that a company employs 2,000 women and 3,000 men. We also need to know how many women were on maternity leave, what was the employment age of those women, and many other things. Only then can we get a fair picture of the actual situation,” she continues.

In her research project, Salihu is looking at 41 different companies – including deposit money banks, insurance companies and mortgage banks – examining the companies’ gender diversity disclosures over the past ten years.

If you look broadly at Nigerian companies in the finance sector, they often appear to be fairly gender equal. For example, Nigerian finance companies employ on average around 45 percent females and 55 percent males, Salihu says. But as you look higher up the ladder in the organisations you find fewer and fewer women. The average share of women among board members in Nigerian finance companies is currently 23.89 percent, which is below the 30 percent quota required by Nigerian law.

Furthermore, even a company with a fairly equal share of men and women on the board is not necessarily equal in terms of how influence and power are distributed within the organisation, Salihu says.

Women’s groups have accused companies of “tokenism” External link, opens in new window. – putting women on the board simply to add a female face, while keeping the men in charge.

“It is an expression of the patriarchal structures that still dominate the Nigerian finance sector,” Salihu says.

As a young intern working in a microfinance bank in her father’s village in Ogaminana in Kogi, Salihu hoped to develop her accounting skills. Instead she was placed in a role dealing with customers.

“Women are often employed in marketing and sales based on the idea that they can attract male clients to invest in the bank. They are hired for their supposed ‘female qualities’ rather than for their technical skills.”

Research shows that companies with a high representation of women on the board are more successful on various levels. For example, they are less likely to receive malpractice fines from European banks External link, opens in new window.. Furthermore, during the 2007-2008 financial crisis, companies with a high percentage of women on the board suffered fewer credit losses and reported stronger financial performance External link, opens in new window..

Yet, these positive effects will only appear if the women are employed on their professional merits, not as “token” females , Salihu argues.

Salihu says there is a propensity for burnout among women aged under of 35 years External link, opens in new window. who are working in the finance sector.

“Young women are particularly sensitive to harassment in the workplace. Also, women at a childbearing age typically need to shoulder both their career and domestic work. Many women get up at 4am to make breakfast for the whole family before leaving for work. When they get home they perform domestic duties until late at night.”

When Salihu looks at the trend over the past ten years, not much has changed in actual gender equality in companies. However, the amount of information on gender diversity companies disclose has increased considerably.

“This is positive. Getting information and mapping the situation is the first step towards making changes for the better. However, the disclosed information needs to be of much higher quality and more consistent than it is today to be really useful for auditors, researchers and policymakers.”

Strengthening Nigeria’s legislation on gender equality disclosure, therefore, is one of Salihu’s main policy recommendations.

Another recommendation is connected to the role of non-executive directors. Among the 41 companies in Salihu’s study, those with a high number of female board members and an overall gender-equal type of management generally also had a large share of non-executive directors. Salihu’s theory is that non-executive directors, who tend to be more independent in relation to companies than executive directors, act less out of self-interest and use their objective judgement more often. This appears to make them more open to hiring women board members.

Salihu suggests that policymakers should implement legislation to strengthen the independence of non-executive directors even further.

“Securing the independence of non-executive directors is crucial,” she says. “Then, of course, the companies also need to do their part to increase the proportion of women who are non-executive directors. This would allow women on the board to have an independent voice during decision-making.”

Another recommendation is to strengthen women’s rights; for example, the right to maternity leave, and to criminalising outdated practices that discriminate against women.

“The ‘marriage bar’ is still a big thing in Nigerian banks, which means that a married couple cannot work in the same bank. Usually, it is the woman who has to leave her position after a couple has married.”

While legal reforms are necessary to improve gender equality, changing the attitudes and culture the management of the finance companies promotes is equally important.

“Accounting on gender diversity should be less about reputation and risk management – it must become more emancipatory. The companies should have trainings about gender equality. You have to tell the men that everybody’s equal here. We need to move forward from merely counting women to making women count.”

TEXT: Mattias Sköld