BoT aims more women in financial entities’ senior posts

THE Bank of Tanzania (BoT) has issued a Circular requiring banks and financial institutions to review, amend and adopt governance policies and board composition to ensure that at least one-third of board members are women.

DAR ES SALAAM: THE Bank of Tanzania (BoT) has issued a Circular requiring banks and financial institutions to review, amend and adopt governance policies and board composition to ensure that at least one-third of board members are women.

This follows the Bank’s study that unveiled gender disparities within the leadership of banks and financial institutions in the country.

“Currently, men overwhelmingly occupy senior roles, with women significantly underrepresented in both board and executive positions,” BoT Circular stated.

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The study revealed that the ratio of males to females in the board of directors and senior management of banking institutions were 75:25 and 70:30, respectively, with some institutions having no single female representation at board level.

According to the BoT findings, addressing the imbalances is not only an ethical imperative but also a strategic business decision that can lead to more robust governance and improved financial performance.

“Within the next six months from the date of this Circular, banks and financial institutions are required to submit their plans of action for review by the BoT,” the Bank Circular stated.

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The Bank said gender diversity enables institutions to better understand and respond to the needs of a diverse customer base, thereby enhancing customer satisfaction and loyalty.

Moreover, a more inclusive leadership team fosters a work environment where diverse perspectives are valued, leading to increased creativity and problem-solving capabilities.

“By embracing gender diversity, banks can position themselves to meet the challenges of the future while driving sustainable growth,” BoT Circular said.

The Bank said in the Circular that the Directors Competence Matrix should be updated to reflect this goal, ensuring that board appointments are made with consideration of the diverse skills and experiences that women bring to leadership. In addition, the Bank’s Circular said gender diversity should be integrated into board succession planning processes.

This involves identifying and developing a pipeline of qualified female candidates who are prepared to take on board roles as they become available. Succession plans should be aligned with the institution’s long-term strategic goals and commitment to diversity.

Furthermore, the BoT said the board charters must be amended to explicitly include guidelines for achieving and maintaining gender diversity.

This includes setting clear expectations for the recruitment, selection and evaluation processes that prioritise the inclusion of women in leadership roles.

“On enhancing the representation of women in senior management roles, banks and financial institutions should set targets for female participation in executive positions and implement career development programmes that support the advancement of women within the organisation,” stated BoT.

The BoT said institutions should also ensure that their leadership development initiatives are inclusive and provide equal opportunities for women to progress. Banks and financial institutions are encouraged to begin adopting these measures immediately.

The Bank said full compliance, including achieving the one-third female representation in boards and improved gender balance in senior management, is expected within the next 36 months.

“Institutions that demonstrate leadership and commitment to these goals will be recognised for their proactive approach to fostering inclusivity,” stated BoT’s Circular