Egypt is the most populous country in the Middle East-North Africa region, with a population of approximately 95.6 million1 (of which approximately 47.3 million2 are women). Egypt has historically played an important political role within the Arab world, and Cairo, its capital, has been the home of the headquarters of the League of Arab States since its creation in 1945. Furthermore, the post of the Secretary-General of the Arab League has traditionally been held by an Egyptian national. Unlike many oil-rich Arab countries, however, Egypt is considered a lower-middle income country.
The Egyptian corporate legal framework has its origins in French civil law. The Capital Market Law 95 of 1992 regulates the capital market and provides the legal framework and supervision of the Egyptian Stock Exchange (EGX) and financial institutions, including brokerage firms. In 2005, the Egyptian Institute of Directors of the Ministry of Investment adopted a Code of Corporate Governance (“the Code”), which was most recently modified in 2011.3 The Code applies to all EGX-listed companies and all non-listed financial institutions. The Code sets forth governing principles to create more transparent and disclosure-oriented corporate boards, emphasizing the importance of establishing risk management committees and adopting rules on avoiding conflicts of interest.
The 2011 revolution in Egypt eventually led to notable cultural changes, especially as they affect Egyptian women. Although women participated in the protests in 2011, the years immediately following the revolution saw a decrease in gender parity in the country. The Constitutional provision setting a quota for women in parliament was revoked and replaced with a requirement that each party nominate at least one woman. However, female candidates were not given top priority in the 2011 Parliamentarian elections and, as a consequence, women lost representation in government.4 In the workforce, women continued to face discrimination as they attempted to apply for jobs.5
In recent years, conditions have slowly improved for women. The passage in 2015 of a new quota for women in government led to a big uptick in the number of women serving on local councils and in Parliament. The quota requires 25% female representation in local councils and 10% female representation in Parliament.6 In 2016, female representation in Parliament spiked to 14.9%.7 Attitudes are also shifting in the government and business worlds. For example, President Abdel Fattah El-Sisi has taken steps toward female empowerment in recent years, including publically condemning the increase in acts of sexual violence against women, renewing the National Council for women, and appointing an equal number of men and women to Parliamentarian seats as part of his presidential prerogative.8
On the business side, the EGX is looking to address gender diversity as part of its larger sustainability strategy.9 The EGX recently announced a collaboration with the American University in Cairo to improve gender representation on corporate boards.10 There is also growing recognition of the business case for including women on corporate boards. A 2017 study of the performance of companies following the revolution found that those with a woman on the board fared better than companies with all-male boards.11
In 2016, the Code of Corporate Governance was updated to include provisions covering diversity on corporate boards. Notably, Section 2.2.1 stated, “[g]uided by international best practices, the Board composition should ideally be made up of a diverse mix, unbiased to gender or faith.” The Code also included a provision regarding inclusion of an independent member with “technical and analytical skills for the benefit of the Board and the company.”12 This second provision falls in line with much of the Middle East, where corporate diversity is focused more on the inclusion of independent executives and less on gender.13 Despite recent changes, in practice the Code is toothless. There are no meaningful consequences for non-compliance other than requiring companies that fail to adhere to these principles to disclose the reasons for such failure in their annual reports.
Although the Code recommends both gender and religious diversity on boards, little work has been done to encourage greater religious diversity in the workplace. As for gender diversity, women still account for only 8% of board seats and 23% of the total workforce, down from 26% in 2016. Female participation in the economy is still limited by a number of barriers to entering and staying in the workforce. Laws still limit the ability of women to apply for a passport or national identity card, and to travel outside the home if they are married.14 Further, changes in policy and laws will do little in Egypt without a broader shift in the cultural mindset.15
There are several prominent non-governmental organizations (NGOs) in Egypt focusing on advancing women’s rights, such as the Center for Egyptian Women’s Legal Assistance, Nazra, the Egyptian Center for Women’s Rights, the Arab Alliance for Women’s Rights, and the Association for Development and Enhancement of Women. By and large, these NGOs are united by common objectives: to seek legislative reforms in the area of family law, to advocate for broader female representation in government and judiciary systems, and to promote economic empowerment of women. Additionally, the American University in Cairo is home to the Women on Boards Observatory, which seeks to improve the gender balance of women on corporate boards in Egypt and the Middle East
Egypt has seen increasing female participation in the workforce and in politics in recent years as the country has begun to appreciate the business case for including women on corporate boards. Changes in the law that require female participation on corporate boards and in politics likely have helped this increase. However, the number of women on corporate boards remains low. A larger cultural shift is needed in order to see a greater increase in the number of women in the workforce and on corporate boards.
1 Women, Business and the Law 2018, World Bank (2018), https://wbl.worldbank.org/en/reports.
3 Egypt Code of Corporate Governance, Ministry of Investment (Mar. 2011), http://www.ecgi.org/codes/documents/code_egypt_2011_englishtranslation2016.pdf.
4 Mustansir Barma, Half the Country, but Still Unequal, Carnegie Endowment for Int’l Peace (Mar. 14, 2013), http://carnegieendowment.org/sada/51211.
6 World Bank, supra note 1.
7 Melsa Ararat et al., Board’s Gender Diversity and Firm Performance Before and After the Egyptian Revolution (July 1, 2017), https://ssrn.com/abstract=3063867.
8 Miwa Kato, Women of Egypt, The Cairo Review of Global Affairs (2017), https://www.thecairoreview.com/essays/women-of-egypt/.
9 Gian Piero Cigna, Pavle Djuric, & Alina Sigheartau, Corporate Governance in Transiting Economies: Egypt Country Report, European Bank for Reconstruction and Development (2017), https://www.ebrd.com/documents/ogc/eygpt.pdf.
10 EGX and AUC’s School of Business Collaborate to Improve the Representation of Women on Corporate Boards, American Chamber of Commerce in Egypt (July 19, 2017), https://www.amcham.org.eg/membership/members-news/1480/the-american-university-in-cairo.
11 Ararat et al., supra note 7.
12 Ministry of Investment, supra note 3.
13 Board effectiveness review: A decade of change in GCC boardrooms, GCC Board Directors Institute 28 (2017), http://gccbdi.org/Media/Survey%20Publications/GCC%2028077%20Survey%20Summary%202017%20English%20AW3.pdf.
14 World Bank, supra note 1.
15 Kato, supra note 8.