Women representation on boards has been improving since 2012 and reached 9.7% at the end of June 2016 from to 9.5% at end 2015 and 8.8% at end 2014. Despite these improvements the pace of change is too slow and Singapore is falling behind. More than half of SGX-listed companies are still all-male boards, including many in consumer-facing industries. It is time Singapore addresses this issue with fresh impetus.
Presenting its report, ‘Women on Boards: Tackling the Issue’ to Mr Tan Chuan-Jin, Minister for Social and Family Development, Diversity Action Committee (DAC) urged Singapore companies to increase women representation on boards. This change has to be at a quicker pace or the country might risk its reputation as a leading business hub with sound and exemplary governance.
DAC also made some recommendations to accelerate the pace of change. The Monetary Authority of Singapore (MAS) has to strengthen the code of corporate governance. This would require the listed companies to disclose their diversity policy (including gender), self-set measurable objectives and progress made towards achieving the objectives.
Companies should further implement their diversity policy straightaway and make it a point to disclose it in their annual reports, even before the code is strengthened. Shareholders and other market participants should monitor progress and MAS to consider the need for strong action in case companies do not respond.
Companies in Singapore should adopt best practices for board nomination and appointment, while focusing on developing their executive talent pipeline to increase the pool of women for board roles in the future. There is a gap between the proportion of women sitting on boards and the 21.7 per cent of senior management positions held by women. In addition, out of the 37 per cent of board appointments that were first-time board members, only 6 per cent were women.
Minister Tan Chuan-Jin said, “The Committee led by Mr Magnus Böcker has put in much effort in the past two years. While there has been some progress, more can be done. I urge stakeholders to consider DAC’s recommendations to raise women’s representation on Singapore Boards. Women bring with them different perspectives which can bring about more robust and dynamic governance in companies. These companies perform better, ultimately benefiting our economy as a whole.”
Some of the key obstacles to lack of women representation on boards are –
Minister Tan Chuan-Jin also announced Mr Loh Boon Chye, CEO of SGX as chair for the DAC’s next term. DAC firmly believes that increased requirements for transparency and accountability will spur companies to adopt a disciplined approach to diversifying their boards at faster pace. Board nomination and appointment processes and growing the executive pipeline will support the acceleration.
Magnus Böcker, Chairman of DAC, said, “Today’s boards are a lot more engaged, and the boardroom requires more varied skills and experience to bring any company forward. Bringing the best talents and diverse perspectives to the boardroom is no longer an option but a conscious effort made by a far-sighted company. I trust that all SGX-listed companies will take positive steps to rebalance their board capabilities and extend beyond their existing networks to where there are new skill sets, to recruit the most qualified men and women into the boardroom, especially women, who have been long under-represented. This will support a sustained growth for the company in the long run.”
Madam Halimah Yacob said, “The benefits of having more women directors on boards are well known and yet we have not fully harnessed this potential in Singapore companies. I am glad that DAC discussed the underlying reasons for low women’s representation on boards in a straightforward manner. I believe that all companies want to be as good as they can be, and board diversity with the best suited directors would add new perspectives and dynamics to the companies. I urge companies to embrace the recommendations from DAC. It’s time for our companies to think ahead and raise board diversity to where global companies want to be.”
The public sector has also been emphasising diversity and meritocracy in the selection of people to serve on the Boards of public sector statutory boards and advisory councils. Ms Yong Ying-I, Permanent Secretary of the Public Service Division, Prime Minister’s Office, said: “The Public Sector has been proactive in looking for people from diverse backgrounds to serve on the Statutory Boards.”
“To deliver effectively, our agencies must connect with the broad diversity of entities and people who make up our economy and society, so that they are aware of and understand their concerns and needs. A diverse Board of Directors is important to achieving this, whether it is regarding having a good balance of men and women, ethnicity or backgrounds.” Ms Yong added.