Diversity is increasingly recognised as a key driver of innovation in the workplace. A diverse board is made up of members from different backgrounds, including different genders, races, ethnicities and experiences, which can lead to better decision-making in the organisation. A diverse workforce brings a variety of perspectives and experiences, which can lead to more creative and innovative problem solving.
This is especially true for supervisory boards, where diversity can ensure that all stakeholders are represented and that decisions are made in the best interests of the company. Kashmir Singh, department head and lecturer at Advance Tertiary College (ATC) in Kuala Lumpur, recommends a combination of diversity and robustness in a boardroom.
A closer look at the internal structures of Apple and Microsoft reveals that they have one important thing in common: Both companies are led by stable, diverse boards. A stable board is made up of members who are committed to the success of the company, willing to work hard and make difficult decisions.
The COVID -19 pandemic demonstrated that companies can no longer focus solely on maximising short-term profits. In the recovery phase, it is more important than ever for companies to embrace social responsibility and sensitivity to succeed in the post-pandemic world.
Female leaders can help companies recover better by cultivating a valuable and inclusive corporate culture. Because women are naturally compassionate and empathetic leaders, they are also more likely to engage with key stakeholders beyond investors, including employees, suppliers and customers. The growing share of women in leadership positions in Southeast Asia The number of women on the boards of Singapore’s largest companies has reached a record high.
According to an annual study by the Council for Board Diversity, 36% of board positions at the 100 largest companies listed on the Singapore Exchange were held by women in 2022, up from 23% in 2021. However, there is still room for improvement. The Council for Board Diversity has set a target of 50% women on boards by 2025.
According to the Indonesian Department of Labour, the TPAK of female workers in Indonesia was 53.34% in August 2021, compared to 82.27% of male workers. The Philippine Statistics Authority also indicated that women accounted for 56% of the labour force in the Philippines as of December 2022, while 95.1% of women were employed. In Vietnam, more than half of the 98.5 million population was female in 2021. There are about 26 million female workers in Vietnam, accounting for 47.3% of the total labour force. The country is among the top 15 countries in the world with the highest percentage of women in the labour force. On average, eight out of ten women in the 15-64 age group work.
At 24.6% percent, Malaysia has the highest proportion of female board members in public-listed companies in Asia, above the global average of 19.7 percent. The country also has the highest proportion compared to similar economies such as Singapore (17.6 percent), Thailand (17.8 percent) and Hong Kong (13.9 percent). A recent study conducted by Deloitte in partnership with The 30% Club found that Malaysia has the highest proportion of female CFOs among the Asian countries surveyed (34.9 percent), more than double the global average of 15.7 percent.
However, the country is still shy from its target of 30 percent on boards by 2020. The Corporate Governance (CG) Blueprint 2011, established by the government in 2011, and the current Malaysian Code on Corporate Governance 2021 (MCCG 2021) stipulate that if the target is not met, the board must disclose an action plan and timeframe to reach that mark. Among the key changes under the 2021 revision of the MCCG is the extension of the 30 percent gender diversity requirement to all companies (companies in the FTSE Bursa Malaysia Top 100 Index or companies with a market capitalization of RM2 billion and above).
In 2022, the Malaysian government and Bursa Malaysia have established a mandate to have at least 1 woman on all public-listed company (PLC) boards across the main and secondary markets by 1 June 2023 (1 Sept 2022 for the Top 100 market-cap companies). As of 1 June 2023, women’s representation on boards is at 30.6% for the Top 100 PLCs.
This aligns well with the MCCG study that argues that the issue of greater gender diversity on boards and in the workforce remains at the center of discussions between regulators and companies.
Where we are now and the way forward
A diverse board is more likely to make better decisions because it can represent a broader range of views. Diverse perspectives can help identify potential risks and opportunities that a more homogeneous group may not be aware of.
Diversity not only promotes innovation, but can also help improve board decision-making processes, increase its effectiveness, and build stakeholder trust. It is clear, then, that diversity is a valuable asset for boards of directors.
Companies that do not have an immediate talent pool or suitable candidates for board positions should work to develop and implement inclusion and diversity policies and practises that can help build a pipeline of women leaders over the long term.
At LeadWomen, we offer a range of programmes and services that can help companies build female leadership, including mentoring, leadership development, and advocacy and policy to promote gender equality in the workplace. Companies committed to increasing women’s representation on their boards can work with us to get the support they need to help women make their way to the executive ranks.
Sources
- Malaysia has highest percentage of women board members in Asia. New Straits Times. (2022, April 28). https://www.nst.com.my/news/nation/2022/04/792542/malaysia-has-highest-percentage-women-board-members-asia
- Record number of Singapore’s new director roles filled by women. South China Morning Post. (2023, March 6). https://www.scmp.com/news/asia/southeast-asia/article/3212085/record-number-singapores-new-director-roles-filled-women-after-new-diversity-rules-applied?module=perpetual_scroll_0&pgtype=article&campaign=3212085
- Sharma, S. (2023, March 8). #embraceequity: State of Southeast Asian Women Workforce . ETHRWorld.com. https://hrsea.economictimes.indiatimes.com/news/industry/embraceequity-state-of-southeast-asian-women-workforce/98479891
- Singh, K. H. (2023, May 16). Her seat at the table. The Malaysian Reserve. https://themalaysianreserve.com/2023/05/16/her-seat-at-the-table/
