Singapore prides itself on being one of the leading business centres in East Asia, but on the issue of female representation in corporate boardrooms, a report co-authored by NUS has found that it lags well behind the curve.
The first of a planned annual gender diversity report on the boards of Singapore-listed companies found that women hold just 6.9 per cent of directorships. Moreover, the joint study with advocacy group BoardAgender, found 61.3 per cent of the more than 730 companies listed on the Singapore exchange do not have a single female member on their boards.
The numbers are, in the blunt words of one government minister, “dismal”.
Speaking at an event at the Singapore office of Swiss bank UBS marking the launch of the report, Halimah Yacob, Singapore’s Minister of State for Community Development, Youth and Sports, said that while the country’s women had achieved much in the fields of education and at work, they continue to face artificial barriers in rising to the top posts in the corporate world.
“If there are really good reasons, such as a scarcity of qualified, capable women, I would not be too worried about the absence of women on company boards. But we know that this is not the case,” she said.
It is about ensuring that
our leadership in all
sectors reflects the
diversity of our society
The issue was not merely “a numbers game,” Halimah said. With women making up half the labour force and accounting for the majority of household purchase decisions “it is about ensuring that our leadership in all sectors reflects the diversity of our society.”
Euleen Goh, one of Singapore’s most experienced female business leaders with positions on the boards of DBS Bank, Singapore Airlines and CapitaLand among others, said one of the main issues was a tendency for boards to stick with a “boy’s club” culture, appointing only those they know who “already have stature in the market place.”
“That immediately then precludes having new names, new faces and new diversity that can be brought into the market place,” Goh said.
“If we are appointing our friends, the people who move in the same circles, who read the same books, who have the same views then there’s a blind gap somewhere, and it helps from a corporate governance point of view to make sure that there is that spectrum of views, and constructive debate and challenges at every boardroom.”
The report’s findings rank Singapore well behind not only many Western economies, but also several Asian economies. China and Hong Kong, for example, rank at 8.1 and 8.6 per cent respectively, while in neighbouring Malaysia women hold 7.8 per cent of board positions.
On a global scale, the Nordic countries currently lead the way on board diversity, with Norway having 39.5 per cent of listed company directorships held by women, Sweden with 27.3 per cent and Finland at 24.5 per cent. In the US meanwhile the latest annual survey by Fortune magazine found that 16 per cent of the board seats of Fortune 500 companies were held by women, while 10 per cent of Fortune 500 companies did not have a single female board member.
Singapore, by contrast barely managed to rank ahead of India, with 4.7 per cent female representation, but still some way ahead of Japan, the worst-rated of the world’s major economies, with just 0.9 per cent of board positions held by women.
Marleen Dieleman, Associate Director of the NUS Business School’s Centre for Governance, Institutions and Organisations which carried out the study, said that irrespective of nationality there is a well-established business case globally for improving board diversity.
“Most studies have shown that firms with more gender-balanced boards also tend to perform better,” she said. As such there has been growing support for the idea that diverse boards are more effective in business and responsive to their customers, in turn raising the profile of gender diversity as “one of the standard corporate governance indicators used to benchmark countries and companies”.
In general, Dieleman noted, developed economies average around 10 per cent female representation on corporate boards. “I think Singapore aspires to be on par with the first world on corporate governance metrics, and this is increasingly becoming an important metric, so I think that 10 per cent should be at the minimum our aspiration level,” she said.
“I would like to endorse the message of hope, but our trend analysis doesn’t really give us arguments to assume that the figure will, by itself, without any external influence rise very fast.” However, Dieleman said the report was an important first step in bringing the issue to attention, collating data, and to create a discussion on the changes needed and how to implement them.
From current levels it would take 158 more board seats held by women to reach 10 per cent female representation on the boards of Singapore-listed companies. But the report found that there had been relatively little change over in recent years, with only a small rise from 5.8 per cent of board positions held by women in 2008, to the latest figure of 6.9 per cent.
That raised questions from some attending the report’s launch as to whether quotas adopted by some European countries or other government legislative action would be appropriate. But government minister Halimah Yacob said she felt many women were not keen on the idea of quotas, which might seem them appointed not because they are qualified or have any merit for the post, but rather to “fill up the numbers”.
It’s a wake up for us to
say ‘why are we wasting
the talent we have in
the market place?’
Instead, she said, it was the government’s role to “consciously and continuously develop the pool of women who are competent and capable for these roles.”
Marleen Dieleman of NUS said cases outside of Singapore had shown there are clear advantages and disadvantages to quotas.
“One of the clear advantages to quotas that proponents will mention is that without them we will never progress. And it creates an impetus to create diversity. The other group will say that quotas are not desirable because women will be promoted but not on merit. So that discussion is for government to decide on. As a university it’s important for us to put the figures on the table and get the discussion started.”
Euleen Goh told NUS her experience had shown that another issue was a need for female professionals themselves to be less self-effacing, to think more about the contributions they can make and what they can bring to the board.
“I think one way to get around that would be to promote a scheme of mentoring and champions who would take one or two women executives under their wing, groom them and add to this gene pool of great women talent that we have.”
Collating and reporting on the status of board diversity was important, Goh said, because presenting a clear picture of the current situation should stimulate a debate on what can be done to promote diversity and debate about why Singapore is missing out on half its talent.
“It’s a wake up for us to say ‘why are we wasting the talent we have in the market place?’. It’s a wake-up call for us to reassess how we can better nominate women from our society who would add perspective and diversity to our boardrooms.”