In a progressive move towards gender equality in the corporate sector, the UAE has announced that from January 2025, private joint-stock companies must allocate at least one seat on their boards of directors to women. This mandate, issued by the Ministry of Economy, aims to bolster the presence and representation of women in key leadership roles within the private sector.
This decision builds on previous initiatives aimed at enhancing gender diversity in corporate governance. In 2021, the UAE Securities and Commodities Authority (SCA) required public joint-stock companies listed on the Abu Dhabi and Dubai stock markets to appoint at least one woman to their boards. The new regulation now extends this requirement to private joint-stock companies, signaling the UAE’s commitment to gender inclusivity across both public and private sectors.
Expanding women’s role in UAE corporate leadership
The inclusion of women on boards is expected to bring fresh perspectives and diverse insights, ultimately enhancing the decision-making process and institutional performance of these companies. Abdullah bin Touq Al Marri, Minister of Economy, highlighted that this decision would draw on the expertise of accomplished businesswomen in the country, contributing to the overall growth and competitiveness of the private sector.
“This decision will bring added value to private joint-stock companies, enhancing their institutional performance by drawing on the insights and experiences of successful businesswomen in the country,” Al Marri stated. He also acknowledged the vital role of Sheikha Manal bint Mohammed bin Rashid Al Maktoum, President of the UAE Gender Balance Council, in championing women’s participation in the economy and leadership positions.
UAE’s ongoing commitment to gender balance
The mandate aligns with the UAE’s broader strategy to promote gender balance and increase women’s representation in leadership roles. Since 2018, the UAE has made significant strides in this direction. A directive by the then-President Sheikh Khalifa bin Zayed Al Nahyan allocated 50 percent of seats to women in the Federal National Council, and a 2020 decree ensured equal pay for women and men performing the same job.
Mona Ghanem Al Marri, Vice President of the UAE Gender Balance Council, noted the significant impact of the new regulation on advancing gender balance in the corporate sector. She emphasized that women are “essential partners in the nation’s development across sectors” and that the initiative is a critical part of the UAE’s strategy to enhance diversity and increase women’s representation in leadership roles.
Strategic implications for companies
The inclusion of women in corporate boards is not just a social or moral imperative but also a strategic one. Research indicates that diverse boards are linked to better financial performance, improved governance, and greater innovation. For private joint-stock companies, this new regulation offers an opportunity to leverage the unique strengths and perspectives of women leaders, fostering a more inclusive and dynamic corporate culture.
The Ministry of Economy’s decision also supports the UAE’s efforts to boost its global competitiveness rankings. By promoting gender diversity, the UAE is not only adhering to international standards but also positioning itself as a forward-thinking nation that values the contributions of all its citizens in building a sustainable and inclusive economy.
Looking ahead: A more inclusive future
As the implementation date of January 2025 approaches, private joint-stock companies will need to reassess their board compositions and prepare for this transition. This proactive step will likely set a precedent for other sectors and countries in the region, showcasing the UAE as a leader in corporate governance reform and gender equality.
The UAE’s journey towards gender parity in leadership roles is far from over, but each step, including this latest mandate, marks significant progress towards a more inclusive and equitable business environment. With strong governmental support and a clear vision for the future, the UAE is paving the way for a new era of corporate leadership that truly reflects the diverse talent and potential of its society.
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