PAP Women's Wing, BoardAgender call for mandatory diversity target setting

Singapore

THE People's Action Party (PAP) Women's Wing and BoardAgender want diversity target setting and monitoring to be mandatory components of the Singapore Code of Corporate Governance, and not allow companies to explain away non-compliance, Culture, Community and Youth Minister Grace Fu said on Thursday.

While current recommendations allow companies to set targets of their own choosing, the two organisations advocate that companies should adopt a target of at least 20 per cent female board representation by 2020.

If accepted, the move to make diversity guidelines compulsory marks a significant change in the "comply or explain" corporate governance Code, which is being reviewed for the first time since its last revision in 2012.

The PAP Women's Wing, along with BoardAgender, an initiative of the Singapore Council of Women's Organisations, is making the recommendations to the Monetary Authority of Singapore (MAS).

"Women in Singapore have proven that they contribute to their families, business, society and the economy but they have yet to be recognised for their ability to contribute at the board level," said Ms Fu, who is also chair of the PAP Women's Wing.

The number of women on boards in Singapore lags places such as London and Hong Kong. "This lack of progress risks Singapore's reputation as a leading business hub," said Ms Fu.

The representation of women on the boards of Singapore-listed companies was 9.7 per cent in 2016, an increase from 6.9 per cent in 2011.

Ms Fu said that this "pales in comparison" to women's representation in the workforce and in senior management ranks.

Citing her own experience in university, she said that there was a fairly equal mix of males and females. "Today, I think there are more female students than male students in the university. If you look at population and education, women are having a fair performance as well as fair opportunity. The supply of women talent and the supply of competent women with experience is there, so I think that it's high time that we address the issues."

Ms Fu cited some examples of Singapore-listed companies that do not have a significant number of female board directors. She said that StarHub has one woman on its board, Olam International has two while Genting Singapore, Global Logistics Properties Ltd, Golden Agri-Resources Ltd and Wilmar International still have none.

She said: "In the boardroom, female directors can bring perspectives and value-add to the table, reducing 'group think'. Their input can enhance the company's HR policies and practices, and better support the female staff to fulfil their obligations at work and at home."

Since 2012, the governance Code has required companies to consider diversity as part of their board nomination processes. In January 2015, Singapore Exchange issued a disclosure guide for listed companies highlighting areas which companies should address in their annual reports. According to the PAP Women's Wing and BoardAgender, only a few companies in Singapore have embraced these requirements to date.

Earlier this month, NUS Business School's Centre for Governance, Institutions and Organisations found that female directors of SGX-listed companies earned 56.8 per cent of male directors' remuneration on average, indicating a gender pay gap of 43.2 per cent.

In its proposal to MAS, the PAP Women's Wing said the low representation of women in the study reflects poorly on the degree of openness of our corporate leadership community.

Junie Foo, chair of BoardAgender, said: "There are numerous studies, both in Singapore and globally, that cite a correlation between diverse boards (including gender diversity) and higher shareholder returns. While there's been increased awareness of the importance of board diversity, the number of Singapore companies which are actually embracing this is small. Setting the minimum target of 20 per cent female board representation by 2020 will help accelerate greater diversity across company boards in Singapore."