Motivated by improving its ranking in the World Bank’s annual “Doing Business” report along with international attention currently drawn towards gender diversity and equality, and as part of its strategic sustainable development plan 2030, Egypt is continuously raising awareness on the importance of female contribution on both societal and professional levels. According to Egypt’s 2030 plan, Egyptian women are expected to take up around 30% of key management positions by 2030.
On 29 September 2019, the official gazette issued the Financial Regulatory Authority (the “FRA”) Decrees numbers 123 (the “1st Decree”) and 124 for 2019 (the “2nd Decree”) amending the EGX listing rules and the licensing requirements for non-banking financial services, respectively, to impose female representation on board of directors.
What’s new?
By virtue of the 1st Decree, the FRA amended the Rules for the Listing and Delisting of Securities on the Egyptian Stock Exchange (the “Listing Rules”). The amendment adds a new requirement to the Listing Rules regulating the general conditions of securities’ listing on EGX. The added requirement is to the effect that “the company’s board of directors must include at least a female member.”
Similarly, by virtue of the 2nd Decree, the Non-Banking Financial Service’s Regulations (issued by FRA Decree no. 53 of 2018) currently include the same requirement outlined above as a pre-requisite to obtaining the FRA’s operation license. That said, the FRA is entitled under the new amendment to except certain ‘professional companies’, to be decreed by the FRA, from the requirement of including a female member on their boards of directors.
Under the Decrees, companies subject to the new requirements must implement said requirements by appointing at least one female member on their boards of directors as soon as possible and by no later than 31 December 2020 or in the first board elections to be held after the issuance of the Decrees.
Market Reaction
Dr. Maya Morsy – the Head of the National Council for Women praised the amendments and said that they show that: “Dr. Mohamed Omran believes in the Egyptian woman’s abilities in the various tasks assigned to her and his keenness on the women’s representations on the board of directors of the listed companies and the companies working in the non-banking financial activities”.
Dr. Mohamed Omran – the Chairman of the FRA – confirmed “the importance of the women’s representation on corporate Boards, which achieves many national and international goals, including the implementation of the National Strategy for the Empowerment of Egyptian Women 2030, setting the target for women in senior management posts by 2030 at 30% and achieving Sustainable Development Goals”.
