Corporate rules still blocking women out

Rs50m turnover requirement for chambers blocks women's representation

KARACHI:

Pakistan has one of the lowest rates of female entrepreneurship in the world. According to the World Bank and the Women Entrepreneurs Finance Initiative (We-Fi), only around 1% of entrepreneurs in Pakistan are women. The Asian Development Bank further reports that women own less than 8% of the country's small and medium-sized enterprises, with the overwhelming majority operating as micro or small businesses rather than large corporate enterprises.

These statistics should concern every policymaker committed to women's economic empowerment. They also raise a fundamental question: if so few women own businesses, why do Pakistan's Women Chambers of Commerce and Industry operate under governance rules that exclude so many of them?

The answer is both simple and compelling. Women's chambers were created because women entrepreneurs have historically faced structural barriers that limited their participation in the economy. They were intended to provide women with a collective voice, promote entrepreneurship, facilitate access to markets and finance, encourage business formalisation, build leadership, and advocate for policies that would enable more women to establish and grow successful enterprises. Above all, they were envisioned as institutions that would represent women entrepreneurs who had long remained underrepresented within Pakistan's business community.

Thirteen years after the introduction of the Trade Organisations Act, 2013 and the accompanying rules, it is timely to examine whether every aspect of the current regulatory framework continues to serve its original purpose, particularly the requirement that 50% of the Executive Committee of a chamber comprise Corporate Class members with an annual business turnover of at least Rs50 million. According to women's chambers seeking renewal of their licences, this requirement is routinely cited as a ground of non-compliance during the renewal process. There is no publicly available explanation as to why this threshold was adopted or what evidence justified it. The rule epitomises a recurring flaw in public policymaking where regulations are too often drafted in isolation from the realities they are intended to govern.

Another troubling aspect of this policy is its practical impact on the sustainability of women's chambers themselves. Over the years, a number of women's chambers have reportedly faced regulatory difficulties, including the loss or non-renewal of their licences. If, as has been widely suggested, the inability to satisfy the Corporate Class requirement has contributed to these outcomes, then the policy warrants urgent review.

An institutional framework created to promote women's entrepreneurship should not become the very reason that women's chambers struggle to survive. This is precisely why greater transparency is needed. The DGTO should publicly disclose how many women's chambers have lost or failed to have their licences renewed over the past decade and whether non-compliance with the Corporate Class requirements formed a major reason for these outcomes. Evidence, not assumption, should guide the reform of policies that directly affect the representation of women entrepreneurs.

Creating a Women's Chamber of Commerce and Industry in Pakistan is a lengthy and compliance-intensive process. From an administrative perspective, establishing and maintaining a women's chamber involves a substantial amount of regulatory compliance and documentation. Whether that amounts to "red tape" is a matter of opinion, but it is accurate to say that the process is significantly more regulated than the registration of many other types of organisations because a licensed chamber performs the statutory representative functions under the Trade Organisations Act. A policy that may appear appropriate in principle can sometimes produce unintended consequences in practice. As Pakistan continues to strive for greater women's economic participation, it is necessary to examine whether the governance requirements imposed on women's chambers strengthen these institutions or inadvertently limit the diversity of voices they were created to represent.

In Pakistan, most women-owned businesses are micro, small or home-based enterprises. It is therefore difficult to reconcile a statutory requirement reserving half of the leadership of women's chambers for a category that is exceptionally small among independently owned women-led businesses. In practice, many women who technically satisfy the Corporate Class criteria do so because their names appear in businesses built and controlled by their husbands, brothers or other male relatives. While there is nothing improper about such businesses, they cannot be equated with the thousands of women struggling to build independent enterprises from the ground up. If the objective of creating women's chambers was to amplify the voices of women entrepreneurs, then a governance framework that substantially limits who can lead those institutions appears fundamentally at odds with that objective.

Good public policy should remove barriers, not create new ones. A chamber established to give a voice to women should not be compelled to search for a handful of qualifying Corporate Class members while thousands of capable women entrepreneurs remain ineligible to occupy seats reserved by law. This is not merely a question of legal compliance; it is a question of whether policy is being shaped by evidence or by assumption. Regulations governing women's chambers should be based on reliable data and an informed understanding of Pakistan's business ecosystem.

THE WRITER IS THE FOUNDING EXECUTIVE MEMBER AND FORMER PRESIDENT OF WOMEN CHAMBER OF COMMERCE AND INDUSTRY KARACHI SOUTH