The Government’s seriousness for 30% women in boardrooms has stakeholders optimistic that the numbers will move upwards.
KUALA LUMPUR: It remains a worldwide trend – boardroom diversity is increasing at a slow rate and women remain under-represented.
Deloitte’s 2017 edition of “Women in the Boardroom: A Global Perspective” underlines that women’s placement at all board seats globally is only at 15%, up by a mere 3% from 2015.
Which explains why Malaysia is stepping forward with bold initiatives to push this agenda forward because a 30% representation of women directors is “the right and bright thing” to do.
Founder and managing director of Corston-Smith Asset Management Datuk Shireen Ann Zaharah Muhiudeen said there has been so many times where she has been the only woman in a boardroom full of men.
Former Minority Shareholder Watchdog Group (MSWG) chief executive officer Rita Benoy Bushon shared a similar sentiment.
“Over the eight years with MSWG, and having attended over 300 annual general meetings, I must say that women board members make up only a small number,” said Bushon.
According to Pemandu’s analysis, about 19.1% in the Top 100 Public Listed Companies in Malaysia are made up of women.
On top of that, 372 public-listed companies do not have a single woman on their boards.
Prime Minister Datuk Seri Najib Tun Razak wants these numbers to improve. For a stronger corporate Malaysia, there can be no compro-mise on gender diversity.
As underlined in the recent Budget 2018, there must be at least 30% participation of women as directors in government-linked companies (GLCs), government-linked investment companies (GLICs) and statutory bodies by the end of 2018.
Bushon lauded the Budget’s inclusion of the 30% women on boards agenda for GLCs and GLICs.
This is in line with the Prime Minister’s announcement in July that sets 2020 as the deadline by which all PLCs must have at least 30% women at the board level.
Najib has pledged to up the number of women by having at least 30% representation in boardrooms.
To push this 30% agenda, Najib launched the Malaysian chapter of the global campaign 30% Club in May 2015.
“Our immediate focus is to facilitate 30% women repre-sentation on the boards of public-listed companies and achieve this target by 2020,” said 30% Club Malaysia founding chair Tan Sri Zarinah Anwar.
“The movement seeks to gain greater active support from chairmen, CEOs and directors to be ambassadors of this agenda so that there is focus from the top – which is where it needs to start,” she said.
Many studies have shown that gender diversity on boards brings value in terms of improved performance, better compliance, governance and risk management.
“Advancing women to positions of leadership is good business,” she said.
Other than having diversity of thought and perspective in the boardroom, Zarinah said that it is also important to have stakeholder representation.
“The makeup of corporate boards of directors should be repre-sentative of the company in which it governs: shareholders, employees and customers,” she said.
This diversity in views, she said, will give companies a competitive advantage.
“Diversity helps to bring broader perspectives when debating and deliberating issues,” said Shireen.
At present, there are no laws to compel a listed company to appoint women directors.
However, in July this year, Najib said that the Government would name companies without women on their boards in 2018.
However, the 30% Club doesn’t believe that a mandatory quota is necessary to reach the 30% target.
“We subscribe to the principle that women should be engaged on merit and not there to make up the numbers,” said Zarinah.
“The challenge is to get women on the shortlist. Once there, we expect the candidates to be assessed on their merit and suitability.”
30% Club co-founding chair Datuk Abdul Aziz Abu Bakar said there’s still scepticism on the value-add of women directors.
“To quote one director: ‘What can’t I get from a male director that I can get from a woman director?’
“Actually, there may be some issues about women on boards because women are more detailed, they read all board papers, they’re not afraid to ask questions, they’re also more risk averse... .”
For board members who say they don’t know where to find women candidates, Aziz, who is also the executive director of Malaysian Directors Academy (Minda), said the 30% Club was well-placed to arrange the matchmaking.
“Male-dominated boards need to change their mindset. I invite them to meet potential women candidates and assess them with open minds,” he added.
Shireen, on the other hand, said she believes in having more incentives for PLCs to drive the 30% agenda.
“The needle is not moving and something has to happen to get it moving, whether it be granting government contracts and including tax incentives,” she said.
Malaysia has since made strides in the right direction.
“The culture is definitely changing and I am definitely seeing progress,” Shireen said, adding that more women are being reviewed and considered as board members.
Bushon has seen PLCs becoming much more open to having more gender-diverse boards.
“Those that were sceptical earlier have either voluntarily embraced it knowing the value women bring to an all-male board or they know that if they do not change, they would be questioned at the AGM by informed shareholders or stakeholders,” said Bushon.
“Our nation indeed has made some healthy progress, especially when compared to other Asian regions.”
Malaysia’s Q3 2017 figures for women on boards of Top 100 PLCs now stand at 19.1%.
According to the September 2016 data from Credit Suisse, The CS Gender 3000: The Reward for Change, Malaysia stood at 13.9% women on boards of PLCs, compared with the Philippines (10.9%), China (9.2%), Hong Kong (11.4%), India (11.2%), Indonesia (6.2%), Japan (3.5%), South Korea (4.1%), Singapore (9.9%) and Thailand (12.7%).
In the same report, Norway charted 46.7%, France (34%), Italy (30.8%), Finland (29.2%), Belgium (27.9%), The Netherlands (26%), Denmark (28.5%), the United Kingdom (22.8%), Canada (20.5%), Australia (20.1%), the United States (16.6%) and Russia (6.5%).