Inclusion of Diversity in Senior Management Critical for Business Sustainability

May 13, 20168:48 am2633 views

In a candid conversation with Frecy Bastian, Head of HR and Corporate Services, Cambridge Industrial Trust Management (CITM) Ltd., HR in ASIA derives insights on the challenges towards inclusion of diversity in senior management paving its way to encouraging women leadership in corporate boardrooms in Asia.

Also various touch points have been covered in this exclusive coverage to include – structured remuneration standards and policies, effective risk management system and creation of a talent succession pipeline etc. Read on…

  • What are the challenges towards inclusion of diversity in senior management?

Diversity in any organisation commences with the recruitment stage. The key challenge is to develop a supportive work environment that enables each member to perform at their best, while achieving personal satisfaction from their work.

The organisation and industry as a whole need to embody the value of ‘diversity’, which will in turn create a conducive environment for senior management to collaborate, discuss and review all opinions and views. Without this framework, implementation will not go beyond theory-based lip-service.

  • Why is diversity in senior management critical for effective corporate governance and business sustainability?

At CITM, we believe that a robust and capable management team will need both depth and breadth of expertise in order to remain nimble and relevant in a fast-paced, ever-changing market environment.

This ensures a healthy mix of views and opinions, which prevents “groupthink” – a phenomenon where like-minded individuals agree on and reach a consensus decision in the absence of critical evaluation. This can blind the organisation to potentially disastrous and dysfunctional consequences.

Discussions in diversified groups tend to address and cover the concerns of various groups, leading to a more holistic decision-making process. Especially in the current fast-paced business climate, business models need to be constantly reviewed for relevance and diversity among senior management will ensure the process is robust.

Frecy Bastian, Head of HR and Corporate Services, Cambridge Industrial Trust Management (CITM) Ltd.

Frecy Bastian, Head of HR and Corporate Services, Cambridge Industrial Trust Management (CITM) Ltd.

  • How can businesses work towards managing multi-generational workforce in senior levels of management?

In the first instance, buy-in from the key decision makers towards supporting a multi-generational workforce is imperative. They will need to demonstrate support, acceptance and impartiality.

However, in CITM, we do not advocate the categorisation of generations as a guide for how people should be managed. Rather, it is more important to understand the motivations of each member, and for the CEO and or the Board to review and align these motivations to the organisation’s current goals.

  • What could be the reasons for lack of female representation in corporate boardrooms in Singapore and other APAC regions?

For CIT, the board takes into account skill representation, tenure, experience, age spread and diversity when selecting candidates for the board. Suitable candidates with skills and capabilities that will complement the existing board will be selected. Both female and male candidates will be considered as long as they meet the above selection criteria.

From what we see in media and corporate disclosures, it is encouraging that some listed companies have acknowledged the importance of female representation in the boardroom.

However, this should not simply be about the numbers. A policy can ensure the organisation fulfils a certain requirement or quota but would be meaningless if it were to be done simply as a formality.

  • What are the efforts made by CITM to promote and encourage women to assume leadership roles?

At CITM, we pride ourselves on having a family-oriented culture where members feel that their interests are taken into consideration and their opinions are valued. Every employee is given equal opportunity to step into leadership roles and is supported through trainings and appropriate mentorship.

Given CITM’s small headcount, line managers do recognise, develop, and prepare “high-potentials” for bigger roles. We strongly believe that the right thing to do is to ‘hire/promote from within’, whenever possible. It is good for business as retaining high performers is less costly, boosts productivity, and allows retention of knowledge.

The management acknowledges the importance of understanding employees’ individual lifestyles and personal priorities. We have put in place flexible arrangements like “work-from-home” or “time-offs” to allow employees to manage personal matters where appropriate. Our IT infrastructure is geared towards supporting this arrangement. This arrangement has benefited both female and male.

We believe that people are what differentiate CITM. We take great pride in cultivating a culture that allows employees to grow both at home and at the workplace.

See: Women in Senior Management in Singapore increase by mere 3% between 2015 and 2016

  • How can organisations in Singapore maintain high standards of corporate governance in line with the Singapore Code of Corporate Governance?

Business leaders need to “walk the talk” and be role models for their own staff. The core values of each organisation speak for what it believes in, and should guide everyone’s daily tasks. Transgressions must have equivalent consequences to avoid recurrence. This promotes mutual respect between staff and management and serves to uphold the value of integrity.

  • How can HR managers ensure that the level and structure of remuneration is aligned with the long-term interest and risk policies of the company?

HR managers need to be aware of the current business climate and be involved in discussions around business risks. This will enable a holistic understanding of the business and the conditions it operates in, to facilitate a more comprehensive assessment of whether current remuneration levels are competitive and relevant.

  • Tell us some of the key considerations to bear in mind when formulating remuneration policies such as to enable investors to better understand the link between remuneration paid to directors and key management personnel?

As a public-listed company, we have a detailed section on corporate governance that addresses this topic. More specifically, below are the relevant 2 principles:

Procedures for Developing Remuneration Policies

Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. No Director should be involved in deciding his own remuneration.

Level and Mix of Remuneration

Principle 8: The level and structure of remuneration should be aligned with the long-term interest and risk policies of the company, and should be appropriate to attract, retain and motivate (a) the Directors to provide good stewardship of the company, and (b) key management personnel to successfully manage the company. However, companies should avoid paying more than is necessary for this purpose.

  • How can organisations establish an effective risk management system in place, to help navigate risks and exercise appropriate internal controls?

The key to having an effective risk management system is its continuous review and maintenance, reasonably modifying processes as variables change. The thought processes and opinions of various contributors should be taken into consideration; this is where diversity in views can come into play.

Suggested controls should be practical and easy to implement, and most importantly, easily understood by employees at all levels.

  • How do organisations ensure and enhance the transparency process in the appointment and re-appointment of directors to the Board?

Organisations must ensure that the process of appointment and re-appointment of directors are reflected in their Code of Corporate Governance, and that the process is reviewed periodically.

  • How can HR professionals in the APAC region step up efforts to retain key talent and create talent pipeline for effective succession planning?

Although we are a relatively small team, CITM aims to lead by example by being a preferred employer through progressive HR strategy. We are committed to investing in the development of our talent, and to work towards nurturing, staff-oriented corporate culture to retain them.

Key pointers for HR professionals to create an effective succession planning strategy, irrespective of the company size are:

  • Focus on career development of employees and provide them the right tools necessary for success
  • Look at leveraging their strengths and how they can meaningfully contribute towards progress, rather than focusing on their weaknesses
  • It is a constant challenge to identify “diamonds in the rough”, so staff should be given the opportunity to prove their performance under pressure, and be rewarded accordingly
  • Cultivate the culture of mentoring and coaching
  • Be decisive when letting go of “toxic” employees. Attention, recognition and rewards should be better channeled to the more deserving employees.
  • What are the future trends in HR in Singapore you foresee for the next two years?

The current technology trend facilitates flexible working arrangements and this is expected to continue. The traditional 8-hr office-bound jobs will no longer be as attractive as employees seek better work-life balance.

Business leaders will need to implement some form of flexibility to balance business requirements with their employees’ demands, as a “competitive edge” in workplace benefits. This is crucial for organisations to both attract and retain high-performing talent.

Due to the economic uncertainty where bigger companies have to ‘right-size’, I personally foresee more entrepreneur-based businesses flourishing. They will be expected to manage the performance of the business and the motivation of their lean team. They may even outsource the functional side of HR to focus on their core business.

Similarly, bigger companies will also see a shift of the HR function to the business side through the use of analytics and projections, while the line managers will be more involved in mentoring team members. There is a strong need for organisations to adequately plan and prepare for departures by tightening up the knowledge database through placing greater emphasis on succession planning and mentorship.

Also read: Yahoo’s Vice-President Human Resources, APAC Shares Secrets to Success: “Diversity + Imagination = Innovation” at Work

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