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Female board representation in SGX-listed firms rises to 10.8% in 2017: study

Singapore listed-companies, led by the largest issuers, showed some improvement in terms of gender diversity, with a 10.8 per cent female representation on their boards in 2017, an increase from 9.9 per cent in 2016, and 9.5 per cent in 2015.

The proportion of all-male boards have also reduced slightly from 55 per cent three years ago to 50 per cent in 2017, statistics from the Diversity Action Committee (DAC) show.

Top 100 primary-listed companies led the way, achieving a 13.1 per cent women's participation on boards (WOB), up 2.2 percentage points from 10.9 per cent in 2016. This represents the highest increase over the past three years.

Nonetheless, Singapore still trails behind other countries, with Norway and France both having a female board representation of 42 per cent in listed firms. This is followed closely by the UK (27.6 per cent), Australia (26.1 per cent) and the US (21 per cent).

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Within Asia, females in Malaysia also hold a 19.2 per cent share of board seats among the top 100 listed firms. Hong Kong fared slightly better than Singapore at 13.3 per cent, while China, Japan and South Korea were among the countries with the least diversity.

In addition, research by the DAC shows that new board seats were still mostly filled by men. About 40 per cent of directors appointed to the boards of the top 100 firms, and all Singapore Exchange (SGX) listed companies over the past three years were first-time directors, debunking the notion that boards prefer experienced directors, DAC's research has found.

However, most of these new appointees were men - this was almost 70 per cent for the top 100 primary-listed companies, and more than 80 per cent for all SGX-listed companies.

To address this issue, the DAC highlighted that proposed revisions to the Code of Corporate Governance present opportunities for board renewal.

To encourage firms to introduce more diversity into their boardrooms, the Corporate Governance Council has proposed to enforce a "nine-year rule" that will reassess whether an independent director still qualifies as independent after nine years in the role.

Currently, 41 per cent of the top 100 companies have at least one independent director serving nine years or more. There are 101 of such directorships that need to be renewed should the nine-year rule become mandatory if it is moved to become a SGX listing rule.

Similarly, 45 per cent of all SGX-listed companies have at least one independent director serving nine years or more. There are 648 of such directorships, with the longest tenure spanning 46 years.

The public consultation on the revised Code closes on March 15, with the revised code to be launched in the second half of 2018.

Said DAC chairman and head of the SGX, Loh Boon Chye: "The numbers are encouraging. Boards of leading companies are paying attention to the benefits that diversity brings. With our large companies leading the way, DAC is ambitious for the other companies too, to make appointments that will strengthen their boards and the resilience of their strategies."

He added: "The proposed revisions to the Code of Corporate Governance pay specific attention to board diversity and gender is one of its important aspects. Disclosure of how companies achieve their diversity policy will add to investor appreciation and reinforce interest in following a company's progress in governance in addition to its business strategy. Companies acting decisively now will stand us in good stead to achieve DAC's triple-tier target of increasing women's participation on boards to 20 per cent by 2020, 25 per cent by 2025 and 30 per cent by 2030."

DAC is an 18-member committee comprising corporate leaders and professionals from the business, private and public sectors, formed to address the under-representation of women on the boards of companies in Singapore.

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