BEIRUT: The chairman and CEO of Renault-Nissan, Carlos Ghosn, urged Arab businesses Friday to adopt internal policies that promote gender parity to boost low levels of female participation in the regional labor market.
In a keynote address delivered by satellite at the sixth annual New Arab Women Forum in Beirut, Ghosn pointed out that despite the impressive gains women have made in higher education in the Middle East and North Africa region – in Lebanon, 54 percent of college students are women, he said, and levels are similar in Kuwait, the UAE and Palestine – they still make up only about 20 percent of the region’s workforce compared to 50 percent in the U.S. and 60 percent in Europe.
To close the gap, Ghosn advised firms to adopt strict hiring quotas and integrate women into yearly succession planning for senior management level positions, two of the measures he has taken to increase the number of female executives at Renault-Nissan. “If I need 100 engineers in Japan or France, 40 percent of them have to be women and 60 percent have to be men,” Ghosn said. “If you don’t have 40 percent of women you cannot close hiring. So hiring quotas are a very essential element because you are filling the pipeline.”
Renault-Nissan has adopted a similarly strict policy to ensure women are represented in the annual succession plans it drafts for 50,000 top executive roles. “If you don’t have a woman in your succession planning you can’t close your succession planning,” he said. “It’s an open issue until you can identify a person who can be your executive vice president, your vice president, your product managers and so on.”
Providing promising female employees with mentorship to build their confidence and challenging opportunities to prove their abilities are also important ways to encourage more female participation in the labor market, he added.
“The first and most important thing is to give women who have talent and personality tough challenges so they can prove themselves and when they prove themselves they are obvious candidates for tough jobs,” he said. “But if women are limited to staff positions and warmed-up, sugar-coated jobs they will never be able to demonstrate that they are capable of leading the organization, particularly in situations of crisis.”
Other speakers at the conference focused on the cultural and financial obstacles in the “entrepreneurial ecosystem” that contribute to the relatively low level of female entrepreneurship in the MENA region.
Women make up 20 percent of the total labor force in the MENA region and own 15 percent of its businesses, according to the forum’s founder and executive chair, Nadine Abou Zaki, but contrary to the prevailing assumption, they own large-cap companies as well as small and medium enterprises.
Though female participation in the labor market in Lebanon is slightly higher than the regional average at 25 percent, women entrepreneurs still face many obstacles here, including a lack of access to financing to fund startups.
BLC Bank launched banking services catered to women entrepreneurs in 2011 to address some of the recurring concerns women voiced in focus groups the bank conducted. “Women feel like they are not eligible for loans because they don’t have tangible assets to provide the security to get lending,” said Karyl Akilian Momdjian. “We also found that often women university graduates aren’t business-market savvy.”
To address some of these problems, last year BLC began providing collateral-free loans of up $20,000 to female entrepreneurs with businesses that are at least 2 years old. It also launched a networking platform to provide technical aid, mentorship and advice to would-be entrepreneurs and is one of the two banks in Lebanon that allow women to establish bank accounts for their minor children through a fiduciary agreement.
When BLC started offering the collateral-free loans a year ago, 8 percent of the bank’s annual business loans were to women, said the head of its Small Business Credit Department, Benoit Eid, and the number has since risen to 20 percent. But Eid believes the Central Bank needs to do more to promote female entrepreneurship by launching a guarantee scheme and an interest rate subsidy for new businesses in sectors with high-levels of female participation like advertising and beauty.
Internally, BLC has adopted its own target quota. By 2020, the bank wants to have women occupying 50 percent of senior management positions at the bank. “There is definitely a business case for all of this,” said Momdjian. “You can’t expect the economy to evolve when you’re marginalizing 51 percent of the population.”