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Women on boards: 20% target by 2020 and 30% by 2030
THE Diversity Action Committee (DAC) has adopted an escalating set of targets to raise women's share of board seats over the next 13 years. If these are met, women could be filling 459 more board seats by 2020 than at the moment.
The DAC, formed in 2014 to address the under-representation of women on boards of Singapore-listed companies, said it is taking a "hop, skip and jump" approach.
The plan is to have a 20 per cent share of board seats for women by 2020, then 25 per cent by 2025, and finally, 30 per cent by 2030.
The "20-by-20" goal is congruent with the stated objectives of other advocacy groups, specifically BoardAgender and the People's Action Party's Women's Wing. However, the DAC stopped short of pushing for mandatory compliance, preferring to stay within Singapore's comply-or-explain corporate governance regime.
DAC chairman Loh Boon Chye said at a media briefing: "We feel that if companies recognise that this is really of business benefits, with a view to a sustainable business model, the momentum for change will be greater than a mandatory target, which at times could speak of tokenism."
Mr Loh, who is also the chief executive of Singapore Exchange, added: "People will just be trying to make the numbers. But if you don't really believe in the benefits, how sustainable that will be will come into question."
The DAC acknowledged that meeting the targets, particularly the first one, will be a challenge.
Women held 9.9 per cent of board seats among Singapore primary-listed companies as at the end of last year, up 0.4 percentage points from 2015. The percentage of boards with at least one woman slipped one percentage point to 47 per cent.
Assuming that the number of board seats among Singapore primary-listed companies remains the same, companies will have to replace male directors with female appointments on 459 board seats to double women's share of directorships and meet the 20 per cent by 2020, going by DAC data.
The number of board seats that will have to be filled by women instead of men increases to 685 for the second target, and 911 for the final one.
Mr Loh said that the DAC's work over the past few years has provided some forward momentum.
"It is a target that is a possibility, but also not likely probable. We recognise the challenges, but it's a pragmatic and aspirational three-step target that we're trying to achieve."
Notwithstanding that the existing 412 women directors could take on additional board seats to help achieve the target percentages, Mr Loh rejected suggestions that there might not be enough new women candidates to fill up the board seats.
First-time directors should be given more consideration, he said, adding: "Companies need to search beyond their traditional sources of talent."
The DAC will start by focusing on larger companies, which tend to have the resources and corporate-governance foundations in place for quick action.
"They will have the capacity to examine their governance implications without delay; they can search within and outside their traditional pools of talent, and are more likely to receive earlier scrutiny and comments from investors," Mr Loh said.
"So we're calling upon the 100 (largest) primary-listed companies to take the lead in achieving the first step, and when large companies lead and demonstrate the benefits of having women on boards, it will create a momentum of change that spreads to the other companies."
Speaking in Parliament, Minister for Social and Family Development Tan Chuan-Jin expressed support for the DAC's tiered approach.
"This is to signify that getting women on boards is a journey, not a destination. Businesses and the economy will see and reap the benefits of having more women on boards over time," he said.
The DAC unveiled a six-pronged plan. It hopes to:
- Get companies to disclose their diversity policies and progress;
- Improve disclosure of how board composition meets business needs;
- Help companies understand the benefits of diversity;
- Encourage investors and market stakeholders to influence companies on diversity;
- Raise public discourse on the topic; and
- Work with other organisations that share the same goals.