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Frequently Asked Questions

What is Board Diversity?

Board diversity is where boards have a balance and mix of skills, knowledge, experience, age, gender and other aspects of diversity. Encouraging board diversity will foster constructive debate and avoid groupthink in the boardroom.

What is board gender diversity?

Board gender diversity is a subset of board diversity, where there is a representation of both genders at the board level. The Council for Board Diversity aims to increase the number of women on boards who are currently under-represented, across listed companies, statutory boards and non-profit organisations.

Why does CBD focus only on board gender diversity?

While gender is just one aspect of diversity, it is an important and visible one widely tracked by institutional investors, governments and interest groups. CBD believes that diverse boards are catalysts to robust governance and better stewardship of organisations. Women on boards is also a useful lead-in to the subject of diversity, because as decision-makers consider having more women on their boards, they would naturally consider other aspects of diversity that will further contribute to the success of the organisation.

FAQs for Organisations

Board diversity brings about fresh perspectives and diversity of thought to the boardroom, leading to better corporate governance and stewardship of organisations. Increasingly, investors and other stakeholders are utilising diversity of gender, skills and experience on a board as an indicator of the robustness of an organisation’s governance systems hence its future performance. As women on boards is the most visible form of board diversity, having increased gender diversity on boards enhances an organisation’s investment proposition in the eyes of investors.

Read more on the Case for Diverse Boards here.

Most companies tap on their personal networks to search for board candidates. But companies need not be confined to these existing networks. They can also consider:

  • Business networks – Tap on business networks including women’s business groups e.g. International Women’s Forum, Women Corporate Directors, and business associations e.g. Singapore Business Federation and Singapore Chinese Chamber of Commerce & Industry.
  • Executive Search Firms and Board Matching Services – Engage executive search firms and organisations offering board matching services to widen their search.
  • Council for Board DiversityContact us for help in finding suitable women board candidates.

Regardless of the avenue used in searching for board candidates, companies should specifically request for women in their search criteria. Visit Finding Women Board Candidates for more details.

CBD supports that the appointment of board directors should be merit-based. However, organisations should ask themselves whether the slate of candidates is wide enough to find the best talent for the board.

For organisations to be assured that the best candidates, regardless of gender, are included in the talent pool for subsequent appointment based on merit, we encourage organisations to:

  1. Look for candidates beyond personal networks and make use of other sources such as executive search firms and business network groups
  2. Engage in the search process at least a year ahead of board renewals to increase chances that the best candidates are not otherwise engaged in other commitments or have the time to de-conflict other priorities.
  3. Ensure that at least 20-25% of the candidates are women and aim to interview at least one woman candidate.

“I’m convinced that we can get diversity with meritocracy … Too often, we say yes to meritocracy, but when we look at the slate of candidates, it’s the same old, same old. And that’s why we have to open our eyes and our perspectives to see if we can bring on more diversity, broaden our pool of candidates and look at talent with different eyes.” Euleen Goh, Non-Executive and Non-Independent Director, DBS Bank

The preference for known candidates, men or women, is common and convenient, citing better board harmony. But in practice, new board members are particularly conscious of sensitivities and are often more ready to put their points across in a non-challenging but useful manner. Most women are also good at seeking and building friendships with others they do not know on a new board.

Even among the old establishment of various markets, many boards that have added women, spoke about their positive experience.

The key criteria for board member selection should be whether the candidates have the skills to contribute to your board and how they would complement the overall skills mix of the board and the organisation’s strategy.

Being open to considering board candidates without board experience would vastly increase the pool of candidates that the board has to choose from.

Boards should not have to worry about prior board experience, given that board candidates are typically people who are successful in their organisations.

“And we are open to talent who have no listed Board experience. Quite a number of the recent appointees by Singtel and the SingPost boards, who have all been very qualified, had never sat on the Boards of listed companies. And frankly I don’t see that as an issue. These are very smart people.” Simon Israel, Chairman, Singtel and SingPost

The most recent study (issued on 29 June 2018) by the National University of Singapore (NUS) Business School, using econometric techniques, established a relationship between board gender diversity and company’s financial performance, acting through corporate governance.

The establishment of a relationship is a necessary condition towards establishing a definitive causality between these two aspects. The study found that women independent directors, in particular, have a positive direct effect on financial performance (on average, adding one woman independent director is expected to improve financial performance by 11.8%).

Although causality has not been established, Board chairmen from leading companies in Singapore agreed that the benefits of gender diversity on boards are not measured in a quantitative manner but the qualitative benefits of having a diverse board are clear.

Read more about what corporate leaders say about the NUS Business School’s findings here.

Before the release of the most recent study (issued on 29 June 2018) by the National University of Singapore (NUS) Business School that established a relationship between board gender diversity and financial performance, acting through corporate governance, there were other studies that found that having women on boards does not impact financial performance.

One of the more recent contrarian studies was from Wharton University in May 2017, titled “Does Gender Diversity on Boards Really Boost Company Performance?” The report suggests that the lack of impact of women on boards to financial performance were likely to be because:

  • the women added to boards may not differ much in their values, experiences, and knowledge from the men who already serve on these boards; and
  • women, being the minority, lack the influence to change the board’s decisions.

To avoid the situation where adding women makes no difference to a company’s performance, CBD encourages companies to:

  1. Look beyond the pool of same-old same-old candidates (even if they are females) with a view that the true benefits of diversity can be better harnessed from people who are outside their usual circle. Women, many of whom are not on the boards now, can bring the much-needed fresh perspectives.
  2. Have at least 2-3 women directors so that they will not be seen as a minority by the rest of the board members, and be able to contribute more effectively to the board.
When things are new, more encouragement is required to convince people to change their existing way of doing things. DAC found in 2016 that the key reasons for low representation of women on boards was due to the following reasons.

  1. Boards have no impetus to change because governance is generally good and companies are not required to disclose board processes or diversity practices.
  2. Boards seem to have a preference for men, whether experienced or otherwise.
  3. Boards claim to perceive a shortage of qualified women, possibly caused by their preference to fill board seats through recommendation from their personal networks (of men). Qualified women in Singapore are comparable to Australia, US and UK but their representation on Singapore boards are half of these countries’.
  4. Few vacancies for new director appointments, including women. 14% of independent directors on Top 100 companies have stayed longer than 9 years. Having one long-serving independent director for a while can contribute continuity. More than that raises questions whether there are sufficient fresh perspectives and succession planning to take the company forward.
  5. Companies may also be limited by their definition of a suitable board candidate (e.g. only those with CEO experience or those with board experience).

If female participation remains at current levels, companies risk their leadership being viewed as less competitive on the global market, especially with investors who measure a company’s future performance by the perceived quality of its board and management.

Case for Setting Targets for Women on Boards

Large companies typically have more resources to be mobilized immediately to look into policy needs, processes and implementation. Hence board assessment, search and renewal is something larger companies would tend to be able to effect whenever they decide to.

The need to face the diversity issue is also more immediate for large companies. Large companies are more exposed to international investor scrutiny and board diversity is increasingly being viewed by global investors as an indicator of stewardship and governance. Gender equality is one of the Sustainable Development Goals set by the United Nations and observed by asset owners who sign up to the Principles of Responsible Investment which accounts for USD60 trillion.

The experience of large companies in searching for and appointing women directors will bring more public attention to the matter and contribute momentum for other companies to follow.

CBD had done a feasibility study before setting this target. It is achievable if every participant actually participates.

CBD’s target is ambitious but attainable. 20% by 2020, and if more build-up of momentum is needed, then we can do more over a longer haul to achieve 25% by 2025. We have also allowed for a less steep trajectory of 30% by 2030, but we expect that by 2030 the rest of the world will have raised the bar further, probably to 35 or 40%.

As at June 2021, women held 18.0% of board seats on Top 100 primary-listed companies on the SGX. If all Top 100 companies move to have at least 2 women on board (each all-male board replaces 2 men and those with 1 woman director adds another), the Top 100 primary-listed companies would achieve 25% women on boards.

It would. But we are interested in women on boards for the benefits that it brings. Meeting the numbers does not guarantee that benefits follow. We are investing the effort to convince company owners, Chairmen, CEOs and other market participants that their companies do better when they have diverse boards. In harnessing opportunities and managing risk, it is incontrovertible that diversity beats tunnel vision hands down.

If companies continue ignoring the voice of reason, who knows that the forces of international opinion deprecating the standard of Singapore’s governance or the increasing appointment of Singapore women to international boards overseas may cause more forceful measures to be taken by regulators.

While both targets and quotas are specific measurable objectives with discrete timeframes in which they are to be achieved, there are key differences between the two:

  • Targets are voluntary and set by an organisation at their own discretion, with discrete timeframes in which they are to be achieved. Consequences for not meeting a target may be set and enforced as the organisation sees fit.
  • Quotas are mandatory and usually set externally by a body with authority to impose them on organisations (for example, the Parliament). Establishing quotas usually includes setting penalties for failing to meet them. These are enforced by a body external to an individual company and are non-negotiable by individual organisations.
Adapted from: Australia’s Workplace Gender Equality Agency

FAQs for Women

Women make up half the population, the workforce and customer base of many companies. It is important that boards are gender balanced to ensure that organisations are relevant to their stakeholders. Enriched by your lived experience, your fresh perspective on issues within the boardroom will be the catalyst for organisations to become stronger, more relevant and sustainable in the long-term.

Step 1: Understand what it takes to be a board director by learning from experienced directors and first-time women directors. Read more on Preparing for a Board Role here.
Step 2: Get trained on how to be an effective board director. Visit our Education and Training page for a list of organisations providing board training services.
Step 3: Get tips on how to get on a board. Read more on Preparing for a Board Role here.

There are also various executive search firms or board matching services that you may wish to reach out to:

  • Executive search firms – for board roles in statutory boards and listed companies
  • Board matching services – for board roles in listed companies and charities

Visit this page for a list of Executive Search Firms and board matching organisations.

CBD has various channels to support aspiring women board directors. Please get in touch with us to share your experience as a female board director.

FAQs for Potential Partners and Media

CBD approaches women on boards as a business imperative and a matter of good governance in order for organisations to meet their objectives amidst uncertainty and change. CBD works with like-minded organisations interested in improving governance through increasing board diversity, including gender.

CBD is the official source for statistics on women’s representation on boards. We publish statistics half-yearly and share the progress of women’s participation on boards for each of the largest 100 organisations.

Visit this page to access these statistics.

For news articles on board diversity, please visit our News page.

For thought leadership pieces, articles, speeches, events and links to other websites on board diversity, please visit our Resources page.

Useful Links

Finding Women Board Candidates
Learn more about the avenues available

Register Your Interest
If you are interested in board directorships

Readings on Board Diversity
Visit our Resources section for related readings