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Grace Fu urges 'responsive, responsible' capitalism for businesses

With social awareness and advocacy increasingly shaping the economic landscape, businesses that embrace sustainability and diversity will be able to stay competitive, says Minister in the Prime Minister's Office Grace Fu.

SINGAPORE: Corporate leaders and directors should adapt existing business models to embrace diversity and a multi-stakeholder approach. This was the call made by Ms Grace Fu, Minister in the Prime Minister's Office and Second Minister for the Environment and Water Resources on Wednesday (Sep 3).

Speaking at the Singapore Institute of Directors (SID) Directors' Conference 2014, Ms Fu highlighted key global trends such as globalisation, technology and rising social awareness and advocacy - all of which play a role in shaping the economic landscape and how firms conduct their business.

This new model emerging for businesses today is sometimes termed New Capitalism, and involves a multi-stakeholder approach, with goals that reach beyond making profits. Said SID chairman Willie Cheng: "It's multiple stakeholders, it's not just shareholders. It's employees, it's customers, it's suppliers, down to the community and the environment - meeting their needs and the interests of all these stakeholders. I think the second aspect is its not just about economic value, it's about community values and making sure that we reconcile the various interests of the stakeholders."

To remain competitive, Ms Fu urged business leaders to practise responsive and responsible capitalism, by being adaptable, sustainable and embracing diversity. This includes a push for gender diversity on company boards, which can help businesses navigate a complex global environment, she said.

"It's about bringing in people with different expertise, different experiences, different perspectives. Functional areas such as legal, technology, human resources - these are all good to have on board. But one obvious element is, of course, to do with gender," said Ms Fu. "Women increasingly represent a very important consumer group and also it's half of the population workforce. So in order to tap this workforce, this talent pool, to tap this consumer that has bargaining and purchasing power, I think it's important for boards to show they have the counsel of women on board."

The minister says more can be done in Singapore in terms of board composition. A survey last year found that only 8 per cent of directorships in Singapore Exchange-listed companies are held by women, That is lower than the global average of 11 per cent.

Other issues raised during the event - attended by some 650 corporate leaders and directors - included how businesses can creatively tap human capital, and set a new standard for transparency and sustainability reporting.

Ms Fu also said that the Government remains committed to helping businesses grow and succeed in Singapore, and creating good jobs for Singaporeans amid the country's economic restructuring.