More gender diversity in boardrooms

SINGAPORE: Malaysia has beaten Singapore in gender diversity in corporate boardrooms, according to the third edition of the Singapore Board Diversity Report.

Only 7.9 per cent of all board directors in Singapore were women in 2012, up marginally from 7.3 per cent the year before and 6.9 per cent in 2010, indicating the slow progress in boardroom gender diversity.
In contrast, regional peers such as Indonesia (11.6 per cent), Malaysia (8.7 per cent) and Hong Kong (9.4 per cent) have had higher proportions of female directors. 

The report, an annual publication by NUS Business School's Centre for Governance, Institutions and Organisations (CGIO) and BoardAgender, showed female representation continuing to increase but at a slow pace in Singapore boardrooms.

For the first time, the study has also found that gender diversity in Singapore-listed boardrooms enhances the financial performance and corporate governance of firms. 

Significantly, the study found that the appointment of a new female director to a board was usually followed by improved Return on Assets (ROA) and Return on Equity (ROE) over the next three years. 

In addition, cross referencing the findings against CGIO's Governance and Transparency Index (GTI) found that firms with higher-than-average female representation in the boardroom not only had better GTI total scores, they also tended to fare better in transparency, investor relations and remuneration.

NUS Business School Assistant Professor Meijun Qian, co-author of the study, said: "These findings suggest that board diversity is beneficial to corporations. 

Yet, almost 60 per cent of SGX-listed firms do not have any women on their boards."

Women also continued to occupy fewer directorships per person in Singapore compared to men. 

In 2012, 17.2 per cent of male directors held more than one board position, compared to 6.3 per cent of the women. 

Females also continued to be under-represented in leadership positions on the board, with only 4.6 per cent of chief executives and 3.4 per cent of chairmen being women. 

The proportion of all-male boards remained high at 58.2 per cent, slightly down from the previous year's 60 per cent. 

Singapore-based companies among the SGX-listed companies did, however, have a higher-than-average proportion of female directors, at 9.5 per cent. 

Family firms and companies under the Temasek Holdings portfolio also had greater female representation on their boards, scoring 8.8 per cent and 8.4 per cent respectively. 

The industries with the highest proportions of women in the boardrooms were the property, hotels/restaurants and commerce sectors, while the lowest representation was in the manufacturing and multi-industry sectors. 

In a new gender diversity ranking introduced in this report, CCFH (formerly known as Friven and Co) and Malacca Trust jointly clinched the top spot among the SGX-listed companies examined, while Banyan Tree Holdings and Straits Trading jointly held third place. 

The ranking took into account the proportion of women and their leadership roles in boardrooms. 

Supported by UBS and the Singapore Exchange (SGX), the latest report is based on a study of 677 SGX-listed companies which released their annual reports in Financial Year 2012. 

It marked the first time that the researchers investigated the effects of female representation in boardrooms on companies' performance and corporate governance.