CASE FOR DIVERSE BOARDS
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Women on S’pore boards: Going beyond numbers or ‘tokenism’
With Singapore’s business-led, voluntary approach, the intent is to encourage organisations on their journey of board diversity without being too prescriptive. In embracing diversity organically, organisations naturally put more effort into ensuring a culture that values and maximises the contributions of all, as opposed to diversity being a result of unthinking compliance.
BY LOH BOON CHYE, CO-CHAIR OF THE COUNCIL FOR BOARD DIVERSITY AND CHIEF EXECUTIVE OF THE SINGAPORE EXCHANGE GROUP
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Men typically outnumber women in boardrooms, but it was women who collectively made their presence felt at the recent Council for Board Diversity forum attended by 160 directors of listed companies, statutory boards and institutions of a public character (IPCs).
Around 80 per cent of those who attended were women. Add an all-women line-up of speakers, including then President Halimah Yacob, and the forum was easily a showcase of Singapore’s female talent.
Indeed, latest figures from the council – which I co-chair with Mrs Mildred Tan, who also chairs the Tote Board Singapore – show that a record number of women are entering the boardroom.
The proportion of women who sit on the boards of the biggest 100 companies on the Singapore Exchange (SGX) has tripled in the last decade, from a mere 7.5 per cent in 2013 to today’s 22.7 per cent.
Demonstrating their unique position in exemplifying board diversity, statutory boards are at 32 per cent, having made swift progress from 23.3 per cent in 2018. And at the 100 largest IPCs, women hold 29.5 per cent of board positions.
With the longer-term ambition of achieving greater gender balance on boards, far more work must be done in advancing board diversity. The Council for Board Diversity, the Corporate Governance Council, SGX, as well as the Public Service Division and Charity Council, have all supported developments in this regard.
Recent amendments to SGX disclosure rules and the code of governance for charities and IPCs placing emphasis on succession planning and diversity in board composition both give diversity a strong boost.
Real diversity, not tokenism
I’ve been asked a number of times: Wouldn’t it be faster to set a quota? Yes, it would – but quotas can also be met with perfunctory appointments that fuel chatter on tokenism.
Certainly, no capable woman (or man) wants insinuations that their board seat is because of chromosomes rather than capabilities.
There is no one-size-fits-all solution to accelerating progress in women’s representation on boards. Norway was the first to introduce a 40 per cent gender quota on the boards of listed companies in 2005. In the European Union, every stock-listed company needs to have at least 40 per cent female non-executive directors by mid-2026.
Here in Asia, Malaysia and Hong Kong require publicly traded firms to have at least one woman director.
Rather than quotas, some jurisdictions set reporting obligations and aspirational targets. Britain, for instance, saw sustained progress in women’s participation on boards when it introduced targets as a business-led initiative, and has only now piled on pressure by requiring listed companies to meet a 40 per cent minimum, or, in accordance with listing rules, explain why they have fallen short.
In Singapore, the Council for Board Diversity has voluntary targets for the immediate term: top 100 listed companies – 25 per cent by 2025, 30 per cent by 2030; statutory boards – 30 per cent, a target achieved in 2022; 100 largest IPCs – 30 per cent as soon as possible.
In the case of listed companies, revised SGX listing rules requiring companies to disclose their board diversity policy, with targets, plans and timelines, as well as progress, are bolstering Singapore’s business-led, voluntary approach.
The intent is to encourage organisations on their journey of board diversity without being too prescriptive. By embracing diversity organically, they will naturally put more effort into ensuring a culture that values and maximises the contributions of all, as opposed to if diversity is simply a result of unthinking compliance.
Madam Halimah, our first female Speaker and president, articulated Singapore’s approach best during her fireside chat at the forum: “We are not asking for soft options such as, ‘you must have X number of women’.
“We want a situation where you look at the requirements – experience, skill sets and capabilities – of the board or company, and then you look for women in addition to men who can perform them.
“Diversity does not have to compromise meritocracy. Appointments are very much on one’s own merits. But reflect diversity in the selection process and give opportunities to those who are most able to do the job.”
Of course, supply (the quantity of diverse board-ready candidates) must be met by demand (the willingness and ability of boards to appoint these candidates). Focusing solely on developing the pipeline, or only on stimulating growth opportunities for diversity, is addressing only part of the board diversity equation.
To this end, the Council for Board Diversity has introduced the CBD Circle, a new outreach programme to advance board diversity.
Initial activities include thought leadership and networking opportunities for a sharing of boardroom perspectives, to enliven discourse and to bridge board-decision makers with board-ready candidates. Our recent forum is the circle’s most prominent event to date.
Harnessing the diversity advantage
Philosophical views and moral imperative aside, the spirit of increasing board diversity lies in its ability to improve objectivity, address complex issues and enhance innovation.
This was the message that came through during the forum’s all-women panel, put together precisely to highlight Singapore’s strong talent pool of women who have risen to the highest rungs of leadership in their fields.
Among them were Professor Cheong Koon Hean (chairman, Centre for Liveable Cities), Ms Chew Gek Khim (executive chairman, The Straits Trading Company), Ms Geraldine Chin (chairman and managing director, ExxonMobil Asia Pacific), Ms Euleen Goh (chairman, Sats) and Ms Diaan-Yi Lin (senior partner, McKinsey & Company).
Diversity, they all agreed, must be viewed in its broadest sense – beyond and in addition to inherent attributes such as gender and race. It is a combination of diverse perspectives, skills and experiences that enhance an organisation’s sense-making of opportunities and risks.
In Ms Goh’s words: “Boards need as big a radar screen as possible.”
As a chief executive and a board practitioner myself, I could not agree more. I’ve seen first-hand how cognitive diversity broadens market insight, open new doors to networks and opportunities and drives effective strategies.
But getting the “right” diversity into any room is only the beginning. Inclusion is what puts diverse perspectives to work.
This was a salient point raised by the panel. Boards, especially their chairs, must create an environment where ideas are respected, valued and debated, ensuring that decisions are informed by a range of viewpoints.
Singapore needs diversity to flourish. Both because it’s a social tenet that we hold dear, and for the competitive advantage it brings us on the world stage. Statistics on board composition are a valuable indicator of progress, but we cannot be all-consumed by the chase for numbers.
In tandem with efforts designed to meet targets or expectations, we need to build an environment that unlocks diversity’s potential.
Gender diversity is the first important step.
Let me borrow from Ms Goh again: “I’m all for all diversity. But there’s a reason for gender diversity – it’s the most visible reflection of a company’s culture and values. It’s the first step in demonstrating that diversity, equity and inclusion are upheld as values by an organisation.”
The writer is the co-chair of the Council for Board Diversity and chief executive of the Singapore Exchange Group.
This article was published in The Straits Times on 27 November 2023, “Women on S’pore boards: Going beyond numbers or ‘tokenism’‘”
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