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More women on boards of SGX-listed companies: Diversity Action Committee

The 30 largest companies in Singapore led the way in increasing women's representation among directors, the committee found. 

SINGAPORE: The number of women directors on Singapore Exchange (SGX)-listed companies’ boards has increased to 479, up from 448 in 2014, according to the Republic’s Diversity Action Committee (DAC).

The net increase of 31 women directorships meant that the percentage of women directors rose from 8.8 per cent in 2014 to 9.5 per cent in 2015, the committee said in a news release on Monday (Feb 29). 

BIGGEST IMPROVEMENT IN LARGE COMPANIES

The growth was led by Singapore's largest companies, listed in the Straits Times Index (STI), the committee found.

The 30 companies achieved 34 per cent growth in women’s representation, with women in these companies occupying 10.2 per cent of board seats at the end of 2015, up from 7.6 per cent in the previous year. Furthermore, 27 per cent of new appointments to boards in STI companies were women, significantly above the overall market rate of 14 per cent.

Women’s representation on boards increased across companies of different sizes, the committee found. Among large companies with a market capitalisation of more than S$1 billion, however, not only did the number of women directors increase, the number of all-male boards also fell.

There are 108 of such companies including those in the STI that make up 90 per cent of the total market value of listed companies in Singapore, according to DAC.

The committee said that women's representation on the boards of these large companies rose to 9.6 per cent, up from 8.7 per cent in 2014. Furthermore, 41 per cent of boards were all-male at the end of 2015, down from 54 per cent three years ago. Only nine out of the 30 STI companies continue to have all-male boards.

New appointments in the largest companies also hit the highest on record, at 20 per cent. 

GAINING GROUND IN GENDER DIVERSITY?

Overall, the pace of growth for women directorships rose despite a decrease of 63 total board seats to 5,029 directorships by the end of 2015. 

Women directorships increased by 30 - a 7 per cent increase from the previous year - while men took up 93 less seats, down 2 per cent from 2014.

Furthermore, a significant proportion of women directors appointed in 2015 were first-time directors. In 2015, 38 per cent of women appointed to board seats were first-time directors, compared to 32 per cent for men.

The committee lauded the fact that SGX-listed company boards were "gaining ground" despite not having quotas or mandatory disclosure obligations.

Chairman of DAC Magnus Böcker was positive about further improvements in the future.

“For the past two years, we have seen a significant improvement in the number of women directors on boards of SGX-listed companies, especially in large companies. This indicates that companies are responding to investor groups’ and DAC’s call for greater gender diversity on boards, as part of a broader view of board diversity," he said.

"We believe that companies will appoint more women directors in the coming years as this would give them an edge in managing their risks and opportunities to bring the companies forward.“ 

GENDER DIVERSE BOARDROOMS SEE BETTER PERFORMANCE

One observer said companies with a more gender diverse boardroom have reported improvements in performance. 

"They found that with women on boards, they actually improved their return on sales by 42 per cent, and return on equity by 53 per cent in the FTSE100. Overall, I would say that having women on boards actually creates better business performance, be it from the perspective of good corporate governance, from innovation and if you like, the insights," said Ernst & Young Advisory's managing director, Mildred Tan, citing the FTSE100 Davies Report published in 2011. 

Mrs Tan, who chaired the Diversity Task Force regarding Women on Boards (DTF), said there is a need to groom more women, and for a culture change to take place before more progress can be made. 

Another observer said there is indeed a shortage of women at the top management level. 

"We don't have enough of top talent at the upper echelons of management in Singapore to actually provide good and healthy supply for directors to draw talent from. I think that's the problem - we are not keeping women in management long enough for them to emerge at the top," said Mr Adrian Chan, senior partner and head of the Corporate Department at Lee & Lee. 

But both observers steered clear of advocating quotas to be used, saying talent selection should still be based on merit. 

INTERNATIONAL COMPARISONS

Nonetheless, Singapore's performance in gender diversity at the highest levels lagged behind some other international markets. For example, Norway and France, two countries working towards a 40 per cent representation of women on boards, had 35.5 per cent and 29.7 per cent of their directorships taken up by women respectively, as of October 2014. 

The committee said the improvements in Singapore were small and left women’s representation across industry groups more or less unchanged. It noted that many consumer-facing industries are still below the market average of 9.5 per cent, and said that unless shareholders place priority on board diversity and engage boards on this issue, progress will continue to be slow.

To further improve, DAC recommended that SGX-listed companies could disclose top-level diversity to demonstrate the quality of their board, pointing out that other markets had succeeded in accelerating diversity by introducing the practice of disclosure regarding the companies' progress towards self-set targets.