Malaysia is a diverse country, with people from different ethnic groups, religions, and cultures. However, this diversity is not reflected in the composition of corporate boards. This lack of diversity is a problem, because it means that corporate boards are not representative of the population they serve. A more diverse board would bring a wider range of perspectives to the table, which would lead to better decision-making.
A study by RHL Ventures found that only 27% of directors on the boards of Malaysia’s top 100 companies are women, and only 5% are under the age of 40. The study assessed 873 directorships of Malaysia’s largest companies based on market capitalization on Bursa Malaysia. The study found that the board members are predominantly male, at 73%, while females only comprised 27%.
The study also found that only five per cent of directors are aged below 40, a significant 95% aged over 40, and most are in their 50s and 60s. Why the lack of diversity? Malaysia’s corporate governance framework does not explicitly require companies to have diverse boards.
The unconscious bias in the selection process can also lead to an overrepresentation of certain groups, such as men and members of certain ethnic groups. There is also a lack of awareness on diversity as a valuable asset for businesses striving for greater corporate success. Boardrooms that lack diversity do not have the full range of perspectives, experiences and innovation needed to make informed and transformative decisions. This can culminate in decisions that are not in the best interests of the company or its stakeholders, and makes it difficult for companies to stay ahead of the competition. A lack of representation can lead to a lack of trust on the part of stakeholders. People may feel that these companies are not representative of the communities in which they operate. This can lead to a loss of trust, which can damage the company’s reputation and make it more difficult to attract customers, investors, and employees.
Global Women on Boards (GWOB) programme Since 2011, LeadWomen has been actively working to increase the number of women on corporate boards in Malaysia. We do this by providing training and development programmes, mentoring, and advocacy. Our Global Women on Boards (GWOB) programme has been shown to be effective in helping women prepare for board roles.
A study by the Harvard Business School published in the Journal of Business Ethics in 2021, found that our GWOB programme delegates are more likely to be appointed to boards. The study also found that our GWOB programme positively impacts women’s paths to corporate governance in a number of ways: Help women develop the skills and experience they need to be successful in corporate governance. Connected women with, and learned from, experienced corporate governance professionals. Educated delegates about the importance of diversity on boards and create a more supportive environment.
If you are a woman who is interested in serving on a corporate board, we encourage you to learn more about Global Women on Boards (GWOB). You may also contact Liza Liew at liza@lead-women.com for your inquiries on the programme.
Citations
- Hiller, A., King, K., &; Robinson, S. (2021). The Impact of LeadWomen’s Global Women on Boards (GWOB) Program on Women’s Paths to Board Appointments and Board Satisfaction. Journal of Business Ethics, 168(2), 339–353.
- Malaysian corporate boards lack diversity, overseas experience. www.thesundaily.my. (2020, October 1). https://www.thesundaily.my/business/malaysian-corporate-boards-lack-diversity-overseas-experience-YY1881177
- RHL Ventures. (2020, February 18). RHL’s analysis of the board composition of Malaysia’s top 100 companies. RHL Ventures. https://rhl.ventures/rhls-analysis-of-the-board-composition-of-malaysias-top-100-companies/
