President Halimah's address on board-diversity journey bang on

SINGAPORE'S drive to increase the participation of women on the boards of listed companies has been extended to cover organisations in the people and public sector. This is a welcome step forward in the ongoing journey of promoting greater diversity at the upper ranks of the workplace.

But even more encouraging to this writer - who believes that a more effective board, and not just a gender-diverse one, should be the end goal - was the stance adopted by President Halimah Yacob at the launch of the Council for Board Diversity (CBD) on Wednesday.

The CBD takes over the Diversity Action Committee (DAC), whose mission was to increase the representation of women on the boards of listed companies. The CBD expands that ambit to include organisations in the social and public sectors.

When the DAC was first launched, I voiced my concerns about an undue focus on gender diversity. I had argued that while it was necessary to impress upon companies the value that women bring to the boardroom, it was also important for them to bear in mind that gender is just one aspect of diversity and that it should be achieved within the broader quest for overall board diversity and effectiveness.

So I was duly heartened by President Halimah's speech at the first engagement session for the CBD on Wednesday.

She started off by stating that the benefits of having more diverse boards (not just more gender-diverse ones) are well known and accepted - they provide access to fresh perspectives for better decision-making and risk management, which has been shown to lead to more robust corporate governance and improved stewardship of organisations.

She acknowledged that governance is a journey - one on which Singapore ought to progress on as rapidly as it can so that organisations can realise the benefits and sustain performance into the future.

She then pointed out that "women on boards is one aspect of board diversity" - albeit an important and visible form of diversity widely tracked by institutional investors, governments and interest groups.

Astutely, she added: "It (gender diversity) is also a useful lead-in to the subject, because as decision-makers consider having more women on their boards, they will naturally look into the other aspects of diversity that contribute to success of the organisation."

Going beyond the rhetoric, the President made a call to action: "A more concerted effort to look for suitable candidates, and (to) look widely instead of staying with accustomed sources, will bring about change. Companies could even look beyond our shores for board candidates, such as when they expand abroad. After all, overseas companies have come to Singapore for board members."

She said that organisations, especially those that have not had women directors, should seriously consider whether they truly have valid reasons for resisting diversity and its benefits. "Those that turn thought into action sooner rather than later, by casting the net wide to look for the best and most diverse talents and experience to serve on their boards, will position their organisations well, as forward-looking and responsible stewards for sustainable development in the long run."

The President spelled out in her speech the scope within which organisations here should approach the appointment of persons to their board, as well as a practicable way in which they could do so - without the need for quotas or legislation.

In doing so, I feel she has set the right tone and path that organisations here ought to take - being conscious of the need for the right mix of talents, backgrounds and views on their boards, and making a concerted effort to look for the best candidate, not just the best woman, for the job - to attain the benefits of greater boardroom diversity.

For the purposes of this column, I would add to the President's thoughts in the following ways, with a specific focus on the boards of listed companies:

Boards need to understand what qualities, and what mix of them, would enhance their business and their accountability to shareholders. They need to regularly assess the performance of their directors and communicate all of this to shareholders.

This builds on the first point: companies should not be reluctant to remove ineffective directors from their boards for fear that it makes their boards look less diverse. Their reasons for removal, however, should be well communicated to their shareholders.

Work on this has been ongoing but I think the call bears repeating. Singapore needs to continue to expand its current pool of directors with not just more women directors, but also directors from every field, industry and level of experience. As more directors from foreign jurisdictions serve here, a database of them would help companies to be more informed in terms of the talent available. First-time or inexperienced directors should be aided and encouraged to serve through a greater awareness of and easier access to training/mentorship programmes.

As the President herself said, this is a journey. And it is heartening to know that Singapore continues to head in the right direction.

READ MORE: Switching up pace to narrow Singapore boards' gender divide