Board Perspectives
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Tham Sai Choy: Organisations are set up to build succession in its own likeness
“That’s why board diversity is hard to achieve,” says the independent director and active participant in the development of corporate governance practice.
If you’re interested in the corporate governance space and have an opportunity to chat with board practitioner and former KPMG Asia Pacific Chair Tham Sai Choy, seize it. Also a former chair of the Singapore Institute of Directors and a serving board director at blue-chips DBS and Keppel, Tham is not only a proponent of good governance – including diversity as an enabler of better decision-making – his insight, and much-valued candour, add layers to any given topic.
With the proportion of women directors at Singapore’s largest 100 public listed companies reaching 25.1 per cent (up from 7.5 per cent in 2013), we reached out to the former member of the Council for Board Diversity for his reflections on Singapore’s merit-based, no-quota route to embedding diversity in boardrooms.
His responses were truths and wisdom, including this reminder: “When we get diversity on the board agenda, it doesn’t stop there. We have to push diversity back down the organisation. The end goal is that the business, as a whole, does a lot better.”
You’ve been a long-time advocate for diversity. Just a decade ago, the proportion of board seats held by women in Singapore was in the single digits. Now it’s about 25% for the Top 100 SGX-listed companies. While there’s more work to be done, what’s your take on Singapore’s journey towards healthier gender-balance on boards?
There’s nothing like the prospect of being bottom of the class to get us going!
Before Europe set gender quotas for corporate boards, we were all much the same. Singapore was like everyone else. It was when Europe started getting traction from quotas that I think Singapore, which prides itself on its very international outlook, started feeling pressure.
It was quite easy to think we needed a quota too. But some of us felt that it would not suit local needs.
Singapore was going through a transformation from a very rules-based society to one that valued more individual action. A lot of us were supportive of having less rules where possible, as reflected by the comply-or-explain corporate governance regime.
Europe-centred conversations were also very focused on fairness to women and fixing this issue of fairness to women. It shut out the rest of society. Singapore had to consider what would work best for us. We considered implications, the management layer, board layer, private sector, public sector, civic society.
And in my own experience, I was seeing far more women in senior management here in Singapore, than in Europe, the UK or Australia. So why not look at other ways to raise women’s board participation and address the underlying root causes?
We may not have been as quick to increase women directors, but when I look back at the whole of society changes and the discussions we needed to have, I think we have been more successful.
Having enough women board talent is just one aspect. On the demand side (ie., board decision makers), do you think mindsets have shifted to value diversity thanks to the efforts of champions like yourself?
I don’t think I can change the mind set of anyone. I can just ask the right questions every now and then and let everybody else do the work. I think mindsets can only be changed by peer pressure ultimately, particularly for people at that level of seniority. There’s no amount of logical discussion that can change mindset in the way you do it for an economic investment decision or hiring decision.
What would you say is the biggest barrier to board diversity, not only gender diversity, but in its broader definition?
Trust. It’s probably more important than a person’s qualifications and expertise because you’re bringing an individual into a very small group of about 10 people. Every person you bring in changes the group dynamics. Diversity, by definition, threatens trust. Its whole point is to bring in different views, not somebody with the same views who reinforces everything that is already there.
But there is greater acceptance and recognition for the value that diversity brings now that we’ve got more experience in this area and are sharing it with each other.
If I may digress to share a story from the days when I was running KPMG Asia: I was chatting with my UK counterpart about KPMG being a people business; the only thing we have is people, and our HR is top of class. He said to me, “You work so hard to make sure everyone you hire meets your criteria. Where is the diversity?” They are all top performers who went to the best universities. I thought about that and went to HR and said, “Can we set a target that 20% of the people we hire do not meet our criteria?” I tell you, that is one hard thing to do.
Organisations are set up at every level to build succession in its own image. From entry level, with every hire, every performance appraisal, promotion and directorship. I’m conscious that succeeding in your own image runs all the way up. That’s why board diversity is so hard to achieve. So going back to the first question, raising women on boards from single digit to 25% is pretty big. And it happened not because there’s a regulation to meet.
When we get diversity on the board agenda, it doesn’t stop there. We have to push diversity back down the organisation. The end goal is that the business, as a whole, does a lot better.
Do you have a personal “why” for championing board diversity and an environment that enables women leaders?
Because I think it’s good for Singapore. It has been good for Singapore. We have a very limited talent pool. Dividing it by two is not a recipe for success, given that we all accept that our resources are finite.
Also, it’s because I chose Singapore. Before I arrived in 1984, for close to a year I had a map of the world on the wall and would think about where I wanted to go. Because back then, as a newly qualified accountant in the UK, the world was your oyster. Having chosen to make Singapore my home, I do want to contribute to building the community and the environment.
Board diversity is more than a number