Women on boards: Malaysia shows the way

PETALING JAYA: Malaysia is leading the way in increasing the number of women as directors of public listed companies in the Asia-Pacific region, a study shows.

This study was done by Korn Ferry and the National University of Singapore Business School’s Centre for Governance, Institutions and Organisations.

It shows that Malaysia saw the largest year-on-year increase in female representation, from 8.3% to 12.5% in 2014.

The study authors attribute this to the success of Malaysian government programmes to increase gender diversity.

“Although it fell short of its target of 30% female representation by 2016, Malaysia is the only country in the study to have implemented such a target and provided active support for companies to reach the goal.”

However, Malaysia is second to Australia in the list of 10 economies studied. Australia continues to be the best performing country in the region, with 21.9% female board members among the Australian Securities Exchange (ASX)-listed companies.

Korn Ferry, the preeminent global people and organisational advisory firm, said the study “Building Diversity in Asia Pacific Boardrooms”, is the fourth in the Korn Ferry Diversity Scorecard series.

It examined the largest 100 publicly listed companies’ 2014 annual reports in 10 Asia-Pacific economies: Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Singapore and South Korea.

It said based on the findings, firms with at least 10% of female board members delivered a 14.9% return on equity (ROE) in 2014 compared with just 12.6% for those without.

“Despite a compelling business case for board diversity, the increase in gender board diversity continues at a slow pace.

“Women make up 10.2% of all directors in this latest study, up from 9.4% in 2013 and 8.0% in 2012. Only three out of 10 countries showed substantial improvement.”

The three are Malaysia, India and Australia. At 7.7 %, Singapore is way down in the rankings, just above Japan (3.3%) and South Korea (2.6%) at the bottom of the list.

The Managing Director, Board & CEO Services of Korn Ferry, Alicia Yi, said: “It is clear that governments and regulators play an instrumental role in shaping the board diversity landscape.

“Whether it is through targets, quota or disclosure requirements, these measures are needed to help enterprises make a deliberate choice in considering female candidates alongside men for senior positions.”

The study shows that Asia-Pacific falls far behind benchmark global economies such as the United States, the United Kingdom and the European Union. For the region to reach parity with these markets, it would require another decade of growth at the current pace.

It said: “It is encouraging to note that all-male boards are no longer a majority in the region with a significant drop from 53.2% in 2012 to 39.0% in 2014.

“This large decrease indicates that boards recognise the need for gender diversity.

“However, they still lag far behind Financial Times Stock Exchange (FTSE) 100 companies; there are no longer any all-male FTSE 100 boards.”

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