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Lindsey Hall: I'm Lindsey Hall, Head of thought leadership at S&P Global Sustainable1.   

Esther Whieldon: And I'm Esther Whieldon, a senior writer on the Sustainable1 Thought Leadership Team   

Lindsey Hall: Welcome to ESG Insider, a podcast hosted by S&P Global, where we explore environmental, social and governance issues that are shaping investor activity and company strategy. 

Esther Whieldon: In the sustainability world, diversity in leadership has gotten increasing attention from many stakeholders in recent years. This topic sits squarely in the social or ‘S’ bucket of environmental, social and governance factors, or ESG. We’ve seen investors calling for diversity on company boards and management teams. And, in some parts of the world, that push for diversity has extended to laws and regulations. 

Lindsey Hall: And while there is increasing focus on diversity, the number of women in top roles remains really low. We know what the numbers tell us. But in this series, we’re digging beyond the data to understand how the few women who make it to the C-suite get there. We're doing that through interviews with women CEOs and executives from across industries and all around the globe. 

We’ve already heard from the CEO of European aluminum and energy producer Norsk Hydro. We talked to the CEO of consumer products company Seventh Generation. And we sat down with the CEO of US insurance company Horace Mann and the head of New York-based Amalgamated Bank. 

Esther Whieldon: We spoke to the CEO of a big South African real estate company in our previous episode. And today we’re returning to South Africa for an interview with the Chief Sustainability Officer at the Johannesburg Stock Exchange. Jennifer Laidlaw conducted this interview. She’s a senior writer on the thought leadership team at S&P Global Sustainable1 and a regulator contributor to this podcast

So Jennifer, what did you find out? 

Jennifer Laidlaw: So I spoke to Shameela Soobramoney. She told me about the steps the JSE is taking to ensure gender diversity across its own business, but also among the companies listed on the exchange. She also talks about her own career and the challenges she’s faced in being a woman of color starting her career just after the first democratic elections in South Africa, following years of apartheid in the country. I started by asking her what role diversity, equity and inclusion plays at the exchange.

Shameela Soobramoney: If we consider South Africa and the history of the country because businesses are rooted very much in the history of the context in which they operate. South Africa, of course, diversity, equity and inclusion has been part of the key elements of our agenda and our development over a number of years. 

Historically, we come from a country that had an apartheid regime that obviously did a lot of damage to the social fabric in the country, created a lot of inequality and has really made an indelible mark in a negative way, I guess, on the way in which inclusion and economic inclusion, in particular, has played out in the country. 

So as an entity operating in that context, it's absolutely critical that diversity, equity and inclusion are at the top of your agenda. And there's a saying that goes that a business can't survive in a society that is failing. And I guess the same can be said for environment. And in that context, it's really critical that business is clear. And the JSE is absolutely no exception and in many ways, has been leading on that agenda. 

If I just look at our gender diversity, for example, there's different ways in which we consider this. The first one is just in our role as an exchange, being uniquely positioned to be a catalyst of change, leading and influencing impactful measures to close an agenda quality gap in a way that few actors can. 

So it's owning and acknowledging what is within your control, either directly or within your scope of influence that you can help to make it a difference. It requires leadership. It's not something that just happens naturally in many instances, particularly where there was an unnatural system such as apartheid that they dominated for many years. 

And of course, even without that just gender equality is something that we struggle with the world over. So as the JSE there's a strong advocacy for women empowerment and female representation, and we do believe that it starts with leading by example.

We're the largest stock exchange in the continent, a key player in the South African economy. And it has an acute understanding of the role that exchanges must play in driving diversity in all its forms and inclusion beyond just our organization. 

On the gender norms, our organization, 60% of our Board of Directors and 80% of our executive members are women. And to drive economic inclusion as well as financial literacy, we host a big event where she invest on an annual basis that really tries to empower women to make some financial decisions and grow their own prosperity and thereby start diminishing the gender divide and also sponsoring sort of gender mainstreaming awards and the like to really try to bring that challenge to not just us but the corporate environment in its entirety, given the number of companies that are listed at JSE.

Lindsey Hall: It was interesting to hear her mention that women play a huge part in leadership at the exchange. We've been speaking to a lot of women's CEOs recently, and the Johannesburg Stock Exchange has a woman's CEO. So Jennifer, how much of an influence has that had on gender diversity at the exchange?

Jennifer Laidlaw: Yes, I asked Shameela about that. She told me that GSE now has its second women's CEO and how the exchange aspires to lead by example. 

Shameela Soobramoney: Leading from the top, certainly has a massive road play. And actually, our current CEO is our second consecutive female CEO of the JSE. So our first one took the helm in 2012. So we've now had 11 years of a female CEO at the helm of JSE, which is, as you know, quite unusual for financial services, in particular. And so something that we're quite proud of. 

So it does have a role to play, and it has a strong signaling effect as well for the market because I think it's human nature to want to see good examples and then try to emulate that. And if you see that working in one place, there's clearly a chance that another company will say, okay, they could do it, then we could do. And either that influences other companies listed on our own market or even other exchanges globally who say, "Well, this could work."

And the other just big influencing effect that it has is that when our CEO speaks to other companies, it inspires other women to say it can be done, and I can do this. And it inspires other leaders to say, well, if I empower women, we can see these kinds of outcomes. So there's certainly a strong element of example that, that leads. 

In terms of how that filters into the organization itself. Of course, again, it's hugely inspiration to work from an organization where you have a female CEO and you look at somebody and you say, well, this a little bit like me. It's not that far fetched and can actually understand some of the challenges for women. And I think a woman leader usually will specifically understand what it takes to get there and hopefully and ideally support the further growth and development of other women in the organization.

 Jennifer Laidlaw: We also discussed how the exchange incorporates diversity, equity and inclusion across its business.

Shameela Soobramoney: If I think about, in particular, how we look at these issues at the Johannesburg Stock Exchange, it's really integrated into our operations, our processes and our practices. 

And I'll give an example. It's our equipment process. There are specific policies and guidelines that we have put in place that will make an explicit effort to ensure diversity, equity and inclusion out there. 

There would be practices that will look at things like pay parity that would -- and there have been ongoing exercise, internally to keep looking at pay parity to make sure that where we have any gaps exist in that we're plugging those where they do. 

When we're hiring new people into our organization, are we making a specific effort in our case, diversity means different things at different contexts sometimes. And South Africa, particularly, racial diversity is a key criteria, right, especially for inclusion.  So how we set that into hiring processes, for example, our training and development processes in terms of which people might be targeted to get the opportunity to grow and develop or whom we might favor in the hiring process to be able to say, we need to up inclusion at a certain level, therefore, we will give certain preference to certain candidates.

Jennifer Laidlaw: And there are other ways the exchange can influence diversity, equity and inclusion, Shameela explained to me. She told me the JSE regulates the stocks and bonds and other instruments listed on the exchange. Its listing requirements ask companies to disclose gender diversity. Here she is again to explain. 

Shameela Soobramoney: So in our listings requirements, there are maybe 2 specific rules that I wanted to speak about.

Within the governance disclosure section of the listings requirements, the one requires companies to make disclosures on diversity in all its forms. And it's actually the listing requirement that followed on its predecessor, which asked for companies to report on gender diversity and racial diversity at a board level. And that's progressed to be report on diversity in all its forms at a broad level.

And you can see that what it's done is progressively effectively recognized that diversity has many facets, and that company would need to consider and apply it to mind explicitly to the different facets of diversity and report accordingly, and it's a mandatory requirement for JSE-listed companies. So it's gone from generic quality ratio -- well, gender diversity ratio diversity, diversity in all its forms, and that will be the first one that we talk about. 

The second one is about the requirement for boards to put to vote annually their remuneration plus. And it's a nonbinding advisory vote at this stage. But in a country with massive inequality, one of the largest ...coefficients in the world, remuneration policy of company has a critical role to play in either perpetuating in quality or trying to reverse some of those things. 

And so the requirement to put to vote annually our remuneration policy is a way of elevating that in terms of its visibility and getting shareholders to actually apply their minds to it and vote on it. And the requirement is that if 25% or more of the votes at the AG have voted against the policy then the company would like to engage with the dissenting voters and the following year in its annual report to actually report back on what the outcome of that engagement was. So those are very specific ways in which we try to -- and those are mandatory requirements, right? 

Then in the voluntary space, we have sustainability disclosure guidance that we put out to the market with very specific indicators on a number of elements of diversity, equity and inclusion that bring both a global lens to what are the kind of standardized indicators around is that we see a number of sustainability disclosure frameworks, for example, as well as a local context layer, which says, in a country like South Africa, one of the very specific things in relation to diversity, equity and inclusion that impact that country. And therefore, what you should you be considering as a company for your disclosures in that regard, and that would be best practices in sustainability disclosure. 

So we encourage that through the disclosure guidance, which looks at a number of elements within a business of inclusion, diversity, equity and inclusion, be it at a racial. be it at the gender level, be it at an age level, be it at a managerial level, there are a number of different disclosure indicators that are contained in that guidance that are effectively trying to encourage companies to look at those things with that lens and start disclosing on them. 

And even if they don't disclose, to make sure that they're starting to have those conversations in the boardroom that ultimately should hopefully influence better practices. Because you don't want disclosure for disclosures sake. What you really want is to influence the practices that result in the outcome of better diversity, equity and inclusion and what that looks like in practice. 

Jennifer Laidlaw: Shameela told me the exchange can also drive capital to sustainable projects as companies can list instruments such as green bonds. Those are a type of debt used to finance environmentally friendly projects or gender bonds that promote gender diversity. I'll let her explain how that works. 

Shameela Soobramoney: From an exchange products and services perspective, it would be how do we give companies the tools to help the reallocation of capital towards more sustainable outcomes. And for example, there's green bonds, social and sustainability bonds where we have a regulated framework that companies could used to list instruments that directly actually raise capital where that money is directly expected to push outcomes and sustainability. 

And for example, last year, we had the first company issue a gender bond under the social bond framework where the proceeds from that listing were going to be targeted directly at improving gender representation within that company and improving gender inclusivity. So those are ways in which you can actually then directly influence the allocation of capital to support better diversity outcomes. And it's a very exciting area where you're starting to link targets, for example, in achieving these things to the cost of capital. So some very innovative and useful instruments that we are trying to create the platforms through that the market could use to advance these agendas.

Esther Whieldon: Now Jennifer, in the beginning of this episode, we heard Shameela talk about how apartheid had cost a lot of damage to South Africa's social fabric and how crucial it was for a company like the JSE to have diversity, equity and inclusion at the top of its agenda. And you recently spoke to the CEO of a South African real estate investment trust to explain what changes their company had made to ensure that the company was not only gender diverse but also racially diverse. Did Shameela have any thoughts on that area?

Jennifer Laidlaw: So I asked Shameela about the specific challenges in terms of gender balance facing the country. 

Shameela Soobramoney: Economic inclusion, I think, is one that's even bigger than gender equality because on one hand, just economic inclusion for the majority of the population has been a challenge over a number of years. We have a huge amount of unemployment, a huge amount of inequality of the country and just bridging that to economic growth, for example, which I think we accept going to grow the economy and therefore, have more economic inclusion would be that step. So those are the things we would need to look at. 

The first one is to just improve inclusivity from an economic perspective. So once you get more people in, and then once you help them there to try and make sure that women participate and in some ways, they could be done together because when you're really making the drive for greater economic inclusion, you could within that make a specific effort to include women. So, for example, entrepreneurship programs that have elements that directly focus on women within that. So we don't perpetuate further the gender divide by saying, okay, we've got kind of better economic inclusion, but we're still perpetuating the gender divide within that. 

The second one, I think, is dealing with cultural norms, practices. And while we still have, in many instances, quite largely patriarchal societies, those norms get perpetuated in the workplace. And again, it's going to be a deliberate effort with the leadership within programs of inclusion, within targets for gender equality that are going to start to shift those dials. And we certainly have seen a line that happened in South Africa. I think in many instances, we've been quite proggressive on that, but of course, nowhere near enough. So once you take those 2 elements in. 

I think the third one is just the deliberate leadership. You need to have that. And they have to be men in the gender equality conversation as well in order to say how are we going to help make sure that we specifically work with improving the inclusion for women? How do we pay attention to any of the prevailing behaviors and norms within workplace that inadvertently actually discriminate against women? 

And I'll talk about examples I guess, a little bit she but things like the old boys club. How do you actually firstly acknowledge that it exists, and secondly, say, well, it's a practice that does discriminate and can we try to dismantle some of that? And how do we create the opposite. 

And I think the last point for me, just very briefly from my perspective also, Jennifer, is that women need to be each other supporters. It's kind of like you should never look down on somebody else until you're kind of lending your hand to pull them up is kind of what I often live by. And so there is no that is what we should be doing and opening the door for others and helping younger women alone who are facing similar challenges that you might have had earlier in your career and letting -- just saying that where you can say, well, I'm going to step in so that you don't have to take 20 years to achieve what it took me to do. And I know where I can see those blockages and I'm willing to help you undo that.

Jennifer Laidlaw: She also explained to me how race and gender had played a big part when she was starting out in her career.

Shameela Soobramoney: So as a person of color in a country with an apartheid history and starting my work career literally just after the first democratic election in the country, my challenges, in many ways, mirror that of many people of color in this country. And it will be cultural norms, basic access to certain things that you might not have had before and understanding that it started -- my career started in a country just getting out of apartheid history, right? And that was not easy. So in some ways, the challenges that women anywhere of face, it feels like we're exacerbated for someone like in a country like South Africa with its past. 

So women anywhere are going to face gender biases, cultural norms and things like that, patriarchal societies. Those are not uncommon regardless of where you come from. But add that layer of ratio profiling and those kinds of stereotyping and things like that, those challenges are significant. 

And they're difficult to deal with because they're not as obvious. And so dealing with those subtle biases and prejudices and things like that is really a difficult, difficult thing to deal with. So I find those to be challenges. 

Understanding how to navigate where you come from a completely different cultural norm to what is the prevalent one in corporate at the time I entered, for example, is really difficult. I come from a background where it is very patriarchal where women are not very outspoken. And then you step into this corporate world where it's expected for you to step up speak out and be heard, and it's not your norm. So you're fighting your norm to fit in and progress in a culture that's not natural for you. 

So I found those to be some of the challenges that I personally faced and had to learn how to navigate. And added to that, I mean, in apartheid South Africa just stepping into a workforce that was increasingly diverse when you kind of come from an apartheid background where there was group areas, for example, and people lived in areas according to their racial groups. And suddenly you step into a place where you need people that you might never have really encountered in your daily life before just in terms of their race group for example. Those are big things to deal with if you've never dealt with them. And I think there's a generation coming in now in Democratic South Africa that faces those to a far lesser extent that might have gone to schools, for example, that are a lot more integrated and had experiences with other people and diversity from an age than I would have had coming into the workforce. And so this really great hope. 

I look at my kids and I look at the diversity in their schools, and I think there's really hope, and I look at the way they engage, and I really wish I had that and I was young and you just want to continue to support that and perpetuate it. And then there's hope that these things are going to change as they get infused into the fabric of corporate ... as well.

Lindsey Hall: So it sounds like Shameela navigates some serious personal and professional challenges early in her career.

Jennifer Laidlaw: Absolutely. And what's great is how hopeful she is for the future as a barrier she faced over recent gender breakdown for younger generations.

Esther Whieldon: Well, thank you, Jennifer. And to our listeners, please stay tuned as we continue to bring you interviews with women's CEOs and executives for a special women and leadership series.

Lindsey Hall: Thanks so much for listening to this episode of ESG Insider and a special thanks to our producer, Kyle Cangialosi. Please be sure to subscribe to our podcast and sign up for our weekly newsletter, ESG Insider. See you next time.   

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