Lack of 'board-ready' women talents: perception or reality?

ACCORDING to the Singapore Directorship Report published by Singapore Institute of Directors in Nov 2021, only 13 per cent of board positions in Singapore-listed companies are filled by women, way behind our aspirational target of 20 per cent women on boards by 2020.

In fact, we are lagging behind our nearest neighbour, Malaysia, where women make up 17 per cent of all PLCs. Despite the clear awareness and intention to improve board diversity and organisation resiliency, the lack of real progression in women representation on boards is disappointing.

So, what seems to be the road block in appointing more women on boards? There's a widespread belief that Singapore lacks qualified board-ready women, and hence the persistent low representation of women on boards. Is this issue a perception or reality? It depends on where you are looking.

Based on the research in Malaysia conducted by Russell Reynolds Associates and the Institute of Directors Malaysia published in 2021, 88 per cent of board appointments were sourced and filled through personal/major shareholders' networks. While a similar study for Singapore is yet to be published, one probably can expect similar findings.

So, if we are serious about improving the diversity on boards, we must start with setting clear goals on board diversity and qualification criteria. More importantly, we need to keep an open mind in board recruitment to cast our net wide and deep, and commit to a rigorous interview and selection process.

Board composition matters

As board composition is of strategic importance, the recruitment of board members should take into consideration the company's long-term strategy and the increasing demand on boards in the face of unprecedented pace of business change and disruption. Therefore, before any director search process begins, the board should ask themselves the following questions:

- Does the current board's composition have what it takes to handle the new era of volatility, uncertainty, complexity and ambiguity (VUCA) world?

- What additional experience and skills are needed to enhance the current board's ability and effectiveness?

- Has the board embraced the best practices in recruiting the most suitable candidate to fill the gaps in the current board?

The right board composition can be a strategic asset. It is key for the board to be open minded to avoid the pitfall of setting overly narrow specifications, resulting in a shrinking talent pool.

- Consider a larger pool of candidates in the initial phase of the search by looking beyond your own personal network. Consider a slate of diverse candidates including those with less visible public persona and are not in the current directors' circles of contacts.

- Expand your search by leveraging professional platforms such as LinkedIn to source for potential candidates. Instead of sourcing from a pool of experienced board members, candidates serving as advisers or board members of internal subsidiaries are viable options as well; be open to first-time board members too. It is a good way to bring in fresh perspectives.

- Engage professional search firms to proactively review the effectiveness of your board and help identify suitable candidates to complement your existing board composition.

- Consider younger candidates to improve age diversity on boards. Based on the latest Singapore Directorship Report, majority of the board members are within the age band of 61-70. Expanding your search to include suitable younger candidates will naturally increase the talent pool.

Building a pipeline

Starting this year, the "9-year Rule" officially kicks in, where long-tenured independent directors serving more than 9 years on the same board will require a 2-tier approval before further extension. Based on the latest report, 24.6 per cent of independent directors of Singapore-listed companies have served more than 9 years.

A strong and diverse board should be viewed as a strategic asset to enhance the long-term sustainability and resiliency of the organisations. Therefore, boards should take this opportunity to re-evaluate and renew their current compositions.

In the meantime, both men and women holding senior positions can certainly play a more proactive role in developing a "board-ready" women talent pool by sponsoring women leaders to serve on internal subsidiary boards. This would be an important learning opportunity for them to develop their confidence and be better prepared for future board positions.

Organisations could consider reviewing their existing policies and be more flexible in allowing full-time executives to take on non-conflicting board roles as part of professional development.

Stepping up early

For women interested to serve on boards, I would encourage you to start earlier, instead of waiting until near retirement age. The next 10 years are going to be faster-moving, more transformative and disruptive than the last ten, hence the shift of the board's role from a fiduciary to a more advisory one. In addition, the capabilities needed as board members may not be the same as that of power C-suite careers.

Therefore, board aspirants need to develop what we call boardroom capital earlier as they do take effort to build:

Strategic thinking

Ability to understand the emerging digital and technological trends, and to look beyond short-term return and instead focus on long-term value creation. Familiarity with evolving business models, industry-specific regulatory issues and fast-changing trends are crucial in helping organisations shape their future strategies. ESG (environment, social, governance)-related issues are areas board aspirants need to be well-versed in as well.

Financial knowledge

Competency to interpret financial reports and understand the capital structures of companies is fundamental in fulfilling the fiduciary duty of boards. The ability to connect projected financials to key trends and external realities will be highly valued.

Emotional quotient

Stepping up to build a successful, trusting and healthy board culture requires you to be empathetic without compromising on the board's vigilance in company affairs. One also has to learn to take a step back by putting your noses in, but keeping your fingers out. It is important to co-create a psychologically safe environment where the executives can be forthcoming to share good news and seek advice when things are not going well.

Unique proposition

Be clear on what role you want to play on boards and where you can add the most value. Invest time to build up your unique personal brand and qualities, in addition to the board-relevant experience and boardroom capital mentioned above.

Lastly, one can start getting "board-ready" by first looking for opportunities to serve on non-profit boards. Openly express your desire to serve on boards, proactively look out for opportunities and seek advice from experienced board members who can help you prepare for future success.

Let's start the year with an open mind to uncover the new reality. Singapore does indeed have enough qualified "board-ready" women when we keep an open mind and cast the net wide and deep. And if you are one of these women, start showing up and make your intention known! It's my hope that 2022 is the year we finally make significant progress in board diversity.

The writer is an independent director of multiple boards