The Bank of Tanzania (BoT) has urged banks and financial institutions, amend and adopt governance policies and best practices for Board Composition and Directors Competence Matrix to ensure that at least one-third of board members are women.

The central Bank Governor Emmanuel Tutuba said in a recent circular to all banks and financial institutions that Directors Competence Matrix should be updated to ensure that board appointments are made with consideration of the diverse skills and experiences women bring to leadership. 

In addition, he 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 governor directed that 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 prioritize the inclusion of women in leadership roles.

Recent study by the Bank of Tanzania (BoT) indicates that gender disparities persist within the leadership of banks and financial institutions in Tanzania. 

Currently, men overwhelmingly occupy senior roles, with women significantly underrepresented in both board and executive positions. 

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. 

“Addressing these imbalances is not only an ethical imperative but also a strategic business decision that can lead to more robust governance and improved financial performance,” he said. 

“Gender diversity enables institutions to better understand and respond to the needs of a diverse customer base, thereby enhancing customer satisfaction and loyalty.”

He said 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.”

Tutuba explained that BoT is committed to fostering a financial sector that embodies principles of equity, diversity and inclusivity, with a specific focus on gender representation at every level of governance for all banks and financial institutions in Tanzania. 

“In this regard, we encourage institutions to adopt measures that will ensure at least one-third of board membership comprises women and that qualified women are more actively considered for senior management roles,” he said.

Extensive research, including reports from the World Economic Forum and the International Monetary Fund, has consistently demonstrated that gender-diverse teams contribute to better decision-making, enhanced innovation and greater organizational resilience. 

These benefits are particularly crucial in the dynamic and competitive environment of the financial sector.

On enhancing the representation of women in senior management roles, BoT had directed banks and financial institutions to set targets for female participation in executive positions and implement career development programs that support the advancement of women within the organization. 

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, and within the next six months from the date of the Circular, they are required to submit their plans of action for review by the BoT. 

Full compliance, including achieving the one-third female representation on 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 recognized for their proactive approach to fostering inclusivity, the governor said adding that the BoT is committed to supporting institutions throughout this transition. 

“We will provide guidance and share best practices to assist banks in implementing these measures effectively. Regular assessments will be conducted to monitor progress, and further recommendations will be provided as needed to ensure that the financial sector remains on track to meet these important inclusivity objectives,” he added.

The study by the Tanzania Bankers Association (TBA) conducted in 2022 revealed that despite constituting 47 percent of the banking workforce, women hold only ten percent of decision-making positions, with less than 20 percent representation on boards of directors.

Female employees (managers and above) to total number of employees and only 10 percent, the study shows.

The average number of women in Boards is 2 which is equivalent to 18 percent of board members of banks operating in Tanzania.

This demonstrates that women are still lagging behind in terms of holding senior positions particularly in the Management Boards among banks and financial institutions in Tanzania.

Tanzania ranks 82nd out of 156 countries in terms of gender gap index according the Global Gender Gap Index 2021 rankings.