Singapore’s boardrooms remain a male dominated environment, with only a minor improvement in the number of board seats occupied by women, according to data compiled by NUS Business School.
The second annual Singapore Board Diversity Report, a study jointly conducted by the School’s Centre for Governance, Institutions & Organisations (CGIO), found women held just 7.3 per cent of board seats in Singapore Exchange (SGX) listed companies in 2011.
The figure was an improvement from the previous year, when women held 6.9 per cent of directorships, but countries like Australia, France and the United Kingdom are improving at a faster rate, with Singapore also falling well behind Asian peers such as China and Hong Kong.
Marleen Dieleman, Associate Director of CGIO and lead researcher for the report, said that with board diversity increasingly recognised as a key benchmark measure for standards of corporate governance, the figures are disappointing for an economy which prides itself as a leader in the field.
“If we were to score Singapore on par with other countries, even peer countries like Hong Kong, there is indeed some action required,” Dieleman said in an interview at an event launching the report. Hong Kong has 10.3 per cent female representation on boards.
She said that at current rates it would take until 2021 for Singapore to reach even the relatively low current global average for industrialised countries of 11.1 per cent.
For companies slow to add women to their boards, Dieleman pointed to a growing business case for increased gender diversity.
“More reports and also academic studies are coming out which demonstrate that boards with more women perform better,” she said, adding that the data on its own doesn’t clarify whether it’s women driving better performance or better companies seeking out more women.
Her comments were echoed by Edmund Koh, Country Head of UBS Singapore, one of the supporters of the report.
“Firms which actively foster an inclusive and diverse corporate culture are better placed to attract the best and compete effectively in an ever-changing world,” he said.
Koh added that he hoped the report’s findings would heighten awareness of the issue and spark “meaningful conversations” that he said need to take place in Singapore boardrooms.”
The NUS study jointly researched with the group BoardAgender, counted 4,799 director positions at SGX-listed companies and found that 350 were held by 324 women.
That means that 94.1 per cent of the female directors in Singapore hold only one directorship. Among male directors 82.6 per cent hold only one position. The report said this implies that female board positions are held by a proportionally larger group of professionals – rather than a small clique.
Keeping it in the family
Family firms did better than non-family firms at gender diversity, with women in 8.2 per cent of their board positions versus 6.3 per cent for non-family firms. However, in this case many of the female board members were relatives of the firm’s founders.
Somewhat surprisingly, the construction industry had the highest percentage of female board representation at 10 per cent. Among REITs and trusts, women held 9.7 per cent of directorships.
Researchers also added a new section to the report, looking at the make-up of boards of government-linked companies, or what Dieleman called “the G-factor.”
Female representation in companies held by the government-controlled Temasek Holdings was 10.3 per cent. That’s better than the overall average for SGX-listed companies, although the report found that three of the 11 companies studied had no female board members.
But among statutory boards – non-listed entities controlled by the government – women held a far larger 19.8 per cent of board positions.
Halimah Yacob, the Minister for State for Community Development Youth & Sports (MCYS), told a gathering for the launch of the report that that was likely due to the philosophy and thinking of the statutory boards that their boards should reflect the diversity of the population.
“Fifty per cent of the population are women so the board should reflect that,” she said.
Yacob said she did not believe the government should set quotas for diversity, because women want to know they are appointed on merit rather than simply to fill up a legal obligation.
Instead she advocated a target of 15 per cent for women directors on boards for publicly listed companies within five years, and a target of 25 per cent for statutory boards.
Yacob noted that Singapore’s Code of Corporate Governance, revised in May 2012, had for the first time included that gender diversity should be a consideration in the composition of a company board.
But the government and advocates for improved gender diversity have an uphill battle in changing the mindset of some companies. In Singapore 60 per cent of SGX-listed companies have all-male boards, and a McKinsey study found that 63 per cent of executives in Singapore do not consider gender diversity a strategic priority.
John Lim, chairman of the Singapore Institute of Directors, said the subject of women on boards never even comes up for discussion among some companies.
“I think this is a situation that we have to change,” he told the audience at the report launch event. “‘How’ is the big challenge.”
But he added that gender diversity should be considered as a subset of overall board diversity, including diversity of skills, competencies and experience.