UBA, Lafarge, Guinness lead Nigeria top firms in board diversity best practice

Agusto report compares Nigeria, SA, US, UK

• 17 of 25 firms have male-dominated boards
• Only 32% of firms with 30% female boards
• BUA Foods 100% male-dominated board
• First Bank, BUA Cement, Geregu Power, Union Bank, Okumu Oil lowest gender diversity

In the global best practice seeking to have public companies enthrone diversity, equity and inclusion (DEI) in board composition, a new report by leading pan-African consultancy, Agusto Consulting, due for release this week but which Business A.M. obtained exclusive access over the weekend, has put United Bank for Africa (UBA) Plc, Lafarge Africa Plc, and Guinness Nigeria Plc, ahead of a pack of 25 most valuable companies in Nigeria as having the highest level of board gender diversity in the country.

The report, “Gender Diversity in Corporate Leadership (the Board of Directors) – Nigeria’s Top 25 Listings”, using market capitalisation at the end of 2022 to determine the 25 most valuable companies, set out to review the gender diversity levels in the leadership of business corporations in Nigeria and it established that UBA Plc, with a board composition of 50 percent female and 50 percent male, is the best gender diverse company in Nigeria.

The report specifically stated that “UBA has the highest female board composition level, with its value standing at 50%. Thus, UBA has an equal number of men and women on its board of directors,” adding that there is a balance of male and female gender on UBA’s board.

Apart from UBA Plc, the report found four other companies to have moved close to the 50 percent mark and they are Lafarge Africa, Guinness, Stanbic Bank and Nigerian Breweries, all of which have female board composition levels exceeding 40 percent but less than 50 percent.

Nigeria’s top three companies with the highest female board composition, namely, United Bank for Africa Plc, Lafarge Africa Plc and Guinness Nigeria Plc had the highest Female Board composition levels out of the 25 examined companies with female gender diversity levels of 50 percent, 45 percent and 45 percent, respectively

According to the report, upon reviewing the 25 most valuable companies, it found that 17 of the companies had a male dominated board composition greater than 70 percent. 

“This is roughly 68 percent of the companies under review, indicating that only 32 percent of the companies have a board composition of 30 percent or more females,” the report stated.

It also found that the highest recorded male dominated board composition level is at BUA Foods, which is currently 100 percent, noting that, “This implies that BUA Foods has no female directors at the moment.”

It noted that overall, the average female representation on the boards for the coverage companies was 25 percent

According to the data it gathered for the report, Agusto Consulting stated that only 10 out of the 25 companies (40%) have a female board composition above the average value of 25 percent, indicating that 60 percent of the companies examined have a female board composition that is less than 25 percent.

With BUA Foods established as the company with the lowest female board composition as it has no female on its board at the close of 2022, others in the group of companies with the lowest gender diversity levels in the country are First Bank of Nigeria, BUA Cement, Geregu Power Plc, Union Bank and Okomu Oil, all of which have low female board composition levels of 15 percent and below. “We note that all these companies fall below the 25% peer average,” the report stated.

The report further examined both positive and negative changes in gender diversity levels among the 25 most valuable Nigerian companies at the close of 2022 which showed that 10 companies added more women on their board between 2020 and 2022, thus signifying greater representation. 

According to the report, Okomu Oil made an impressive move on its board from having no female representation in 2020 to 15 percent representation by the end of 2022. Flour Mills and Zenith Bank also recorded significant improvement between 2020 and 2022, moving from seven percent (7%) and eight percent (8%), respectively, in 2020 to 20 percent apiece by the end of 2022.

On the other hand, companies that witnessed negative changes in their gender diversity levels include  Union Bank and BUA Foods, both of which experienced significant declines in their Female Board Composition Levels in the past year. 

“The Female Board Composition of BUA Foods declined by 100% to nil which implies the company has no female board member, while Union Bank’s composition declined by 44% to 14%. 

“However, between 2020 and 2021, these firms had minor declines in their female board composition levels, asides from First Bank, whose female board composition level declined by 60% to 9%,” the report stated.

Providing its findings with regards to companies whose female board composition exceeded 40 percent, the report noted that only five out of the 25 companies (20 percent) have a female board composition that exceeds 40 percent. “This implies that 80% of the examined companies have at least 60% of their board of directors’ positions occupied by men,” the report noted. 

Global benchmarking

The Agusto Consulting gender board diversity report also compared the Nigerian findings with three countries, South Africa, United States and United Kingdom, to establish Nigeria’s position globally.

“The United Kingdom tops the list with its average board female representation of 37% over the past five years. The United States of America, follows in second place with a five-year average of 31%. Nigeria’s average female board composition has remained the lowest across the countries being reviewed. Despite the growth in female representation on the board in Nigeria to an all-time high of 25% in 2022, it remains lower than its peers in reviewed countries. South Africa has recorded an average of 31% over this five-year timeline,” the report stated.

In a direct comparison of Nigeria and South Africa with regards to the female board composition level of their top 25 companies in 2022, it said that of the reviewed Nigerian companies, 17 had female board composition levels that were less than 30 percent. 

“The reverse is the case for the South African companies, as 17 of its top companies had a female board composition that was at least 30 percent. Bidvest Bank, which was ranked as the 22nd most capitalised company in South Africa, had the highest level recorded, with a value of 70 percent. This exceeds the Nigerian highest [score] of 50 percent from UBA, which is ranked as the 16th most capitalised company in Nigeria,” the report stated.

It also noted that the lowest level observed by the South African companies was 14 percent from Remgro Limited, which occupied the position of the 23rd most capitalised company in South Africa. “However, five Nigerian companies – BUA Foods, First Bank of Nigeria, BUA Cement, Geregu Power Plc and Union Bank of Nigeria still had female board composition levels that were less than or equal to 14 percent.

The Agusto Consulting report also compared Nigeria and the United States female board composition, with the data showing 72 percent of the reviewed American companies had a female board composition level of between 30% and 50%, with 50% being the highest recorded value. This value was observed by two companies; Procter & Gamble and Coca Cola which were ranked as the 13th and 22nd most capitalised companies in the United States. 

Nonetheless, only 32 percent of the Nigerian companies met up to this range. The lowest recorded value for the United States was 23 percent from the 9th most capitalised company – Nvidia Corporation, and this value is only two points lower than the average female board composition level of 25 percent that was observed by the reviewed Nigerian companies.

A similar comparison was done with the United Kingdom to establish the female board composition of the two countries’ top companies.

It found that of the reviewed British companies, 24 had female board composition levels between 30 percent and 65 percent. 

“The highest recorded level for the UK was 64% from Diageo Plc, which is the fifth most capitalised company in the UK. This is greater than the highest recorded value for Nigeria of 50% from UBA, which occupies the position of the 16th most capitalised company in Nigeria. 

“The lowest level observed by the British companies was 27% from GSK Plc, which is ranked as the 10th most capitalised company in the UK. The lowest female board composition level observed by the UK is greater than the Nigerian average of 25%, as only 10 Nigerian companies had female composition levels that were greater than the UK’s lowest of 27%,” the report stated.