Top SGX listcos beat 2025 target for women directors; smaller ones still lagging

THE top 100 companies listed on the Singapore Exchange (SGX) have surpassed a target by the Council for Board Diversity (CBD) for women to account for at least a quarter of the board of directors by 2025.

Mildred Tan, CBD co-chair and chair of Tote Board, noted that Singapore has made significant strides in board diversity, with growth in this area serving as a tangible indicator.

Speaking at the Leadership-in-Action breakfast forum held at Fullerton Hotel on Monday (Oct 28), she said: “The momentum continues, with the proportion of women directors in the top 100 SGX-listed companies growing to 25.3 per cent.” About a decade ago, in 2013, the figure was 7.5 per cent.

However, smaller listcos are lagging behind. Outside the top 100 SGX-listed companies, the proportion of women directors stands at only about 14 per cent.

The figure at statutory boards, on the other hand, has hit 34.2 per cent; among the top 100 institutions of public character (IPCs), representation stands at 31.5 per cent. 

Tan noted that these figures reflect the CBD’s interim results, and that the final numbers will come at the end of the year. Another announcement on this is scheduled for the first half of next year.

“While we can expect some fluctuation due to board renewals, we can say with some confidence that the top 100 will definitely achieve their 25 per cent target by 2025,” she said. “As for statutory bodies and IPCs, they have zoomed beyond 30 per cent.”

“We have not only moved forward, but we have gone much further,” Tan added, acknowledging the collective efforts that have driven this progress.

However, CBD co-chair and SGX chief executive officer Loh Boon Chye stressed that “board diversity must be fit for strategy, and not diversity for its own sake”.

He added that the board is more than the sum of its members, and that effective boards are well-informed and strengthen organisational purpose.

Set up by the Ministry of Social and Family Development in 2019, the CBD focuses on promoting board diversity among organisations in the private, public and people sectors. 

Its forum on Monday attracted some 120 board directors representing more than 150 of Singapore’s largest organisations.

The council’s ambition in the long-term is for organisations in Singapore to achieve an equal proportion of men and women directors on boards, and to recognise that the contribution of women – the most visible and measurable aspect of diversity – is a powerful lead-in to the consideration of other forms of diversity.

Broader diversity efforts needed

Deputy Prime Minister Gan Kim Yong, in his keynote address at the CBD event, called for more to be done to achieve greater gender diversity in Singapore.

He urged the council to continue working with companies to strengthen their disclosures on their targets, plans and progress in achieving board diversity.

“Following the introduction of rules on disclosure on board diversity for SGX-listed companies in 2022, only about 40 per cent of companies have disclosed diversity targets, and an even lower percentage have disclosed plans, timelines and progress towards achieving these targets,” he said.

He said he was heartened by the progress made for greater board diversity, but noted that the proportion of women directors outside the top 100 SGX-listed companies was still much lower.

He also sees room for encouraging greater gender diversity in non-listed companies.

“Research has shown that companies with diverse boards not only perform better financially, but also innovate more and are more likely to handle risks when they emerge.”

He cited a McKinsey study that found that companies in the top quartile for gender diversity on their executive teams were 25 per cent more likely to achieve above-average profitability than those in the bottom quartile.

Similarly, a Credit Suisse Gender 3000 report found that companies in which women accounted for more than 20 per cent of the board consistently delivered higher returns on equity and better stock price performance than those with lower levels of gender diversity.

In his call to companies to also pay attention to other forms of diversity, DPM Gan also urged them to make “deliberate efforts” to bring in first-time directors with diverse experience and expertise so that they can provide fresh perspectives to the team.

He noted that more firms are appointing first-time directors without prior board experience. Among the top 100 SGX companies, first-time directors accounted for 66 per cent of all new appointments – an increase of almost 20 per cent from 2022.