Female directors on SGX listcos paid substantially less than male counterparts: NUS study

FEMALE directors of listed companies on the Singapore Exchange (SGX) earned just 56.8 per cent of male counterparts' remuneration on average, according to a study by the NUS Business School's Centre for Governance, Institutions and Organisations.

The study - based on data from 199 firms listed on SGX that disclosed exact director remuneration for financial year 2015-2016 - indicates a gender pay gap of 43.2 per cent.

The widest gaps were found among large firms with a market value of more than S$1 billion (45.5 per cent) and among executive directors (43.9 per cent).

Independent directors, who are often paid a fixed fee, had the smallest gender pay gap: female independent directors earned 83 per cent of male independent directors, reflecting a 17 per cent gender pay gap.

"This can partially be explained by the fact that women are less likely to serve on board committees, be appointed committee chairs, or act as lead independent directors; roles that come with greater responsibilities and higher fees,'' the study suggested.

In other director categories where there is greater discretion, such as executive directors and non-executive directors, women earned just 56.1 per cent and 70.4 per cent of their male counterparts, respectively.

Executive directors showed the greatest absolute differences, with an average annual remuneration of S$1.1 million for men and S$628,024 for women. If one excludes chief executive officers (of which just 3.6 per cent were women) and executive chairs (of which just 1.2 per cent were women), female executive directors earn only 86.1 per cent of male directors in the same role.

The gender pay gap in small listed firms (market value below S$200 million) was 44.9 per cent; in mid-caps (S$200 million to S$1 billion), it was 39.9 per cent and in large caps (over S$1 billion), the gender pay gap was 45.5 per cent.

"These results are disappointing and show that gender inequality in SGX-listed company boards deserves greater attention. The discussion on board diversity in Singapore should move beyond merely increasing the percentage of female directors to also address deep-seated inequalities including remuneration and women's share of board leadership roles," Dr Marleen Dieleman, Associate Professor of Strategy and Policy at NUS Business School said.

The study noted that a vast majority of firms opted to explain rather than comply with the Code of Corporate Governance's requirement to disclose exact director remuneration on a named basis.

Overall, the percentage of female directors stood at 9.7 per cent in all listed firms and 8.0 per cent among those firms that disclosed director salaries.