Board diversity disclosure
Compulsory disclosure on board diversity presents opportunity for champions to shine
Board diversity disclosure requirements for listed companies
For annual reports for financial years commencing 2022, listed companies are required under the Singapore Exchange Listing Rules 710A to:
- Maintain a board diversity policy that addresses gender, skills and experience, and any other relevant aspects of diversity.
- Describe in its annual report its board diversity policy, including:
- its targets to achieve diversity on its board;
- its accompanying plans and timelines for achieving the targets;
- its progress towards achieving the targets within the timelines; and
- a description of how the combination of skills, talents, experience and diversity of its directors serves the needs and plans of the company.
One Step Ahead
The requirements present an opportunity for champions to shine
Read Mildred Tan’s article, “Compulsory disclosure on board diversity presents opportunity for champions to shine”.
The SGX’s decision to mandate the disclosure of board diversity policies gives corporate governance champions in the market an important opportunity to stand out above the crowd.
A new and welcome challenge now presents itself before stakeholders of the Singapore market: Can we make the best of this opportunity to improve board diversity and raise the quality of corporate governance to achieve better outcomes for companies?
One Step Ahead
SGX RegCo CEO shares his views on board diversity disclosure
“Many stakeholders, including investors, are increasingly viewing board diversity as a business imperative in today’s competitive landscape,” says Tan Boon Gin. Addressing boards’ questions relating to SGX rules on board diversity, he shared ideas on
- What diversity targets should look like
- How to find candidates with attributes relevant to the board’s diversity targets
- How a diverse board can get along and function effectively
Read practical ideas organisations can adopt to improve board diversity.
Good practice guides for making board diversity disclosures
The PwC Guide “Board diversity disclosures in Singapore: From intent to outcomes” explores how Singapore companies fare in their board diversity disclosures and recommends ways that they can improve:
- Set measurable diversity goals and targets to reinforce trust and accountability in companies’ promise to enhance board diversity and spur further actions to meet the targets set.
- Include definitive action plans towards meeting diversity goals and targets.
- Review system for monitoring progress and development of diversity within the company.
- Review and enhance company’s board diversity policy on an annual basis to ensure it remains relevant with the companies’ overall Inclusion & Diversity strategies.
- Expand the disclosure of company’s diversity beyond the board.
- Explain in a clear and transparent manner why a company does not have a board diversity policy.
PwC released two earlier reports on how companies can enhance their board diversity disclosures:
The 2022 SGX Corporate Governance Code Disclosure Survey Report* also includes samples of leading disclosures on Board Renewal and tenure policy, Board Skills Matrix and Board Diversity policy (on pages 70 – 73).
*This study was done prior to the effective date of the board diversity disclosure requirement added into the SGX Listing Rules.