Board diversity provides boost for business

THE Singapore government is committed to promoting and safeguarding gender diversity.

The country adopted the Women's Charter early in its history (1961) and female rights are explicitly protected in Singapore's Constitution.

Diversity has the potential to strengthen businesses and improve governance. The Singapore Board Diversity Report 2014 shows that the 7.7 per cent of companies that displayed diversity in gender, ethnicity and age were also the most successful and profitable.

Singapore benefits from a well-educated female workforce that contributes to the performance of both the private and public sectors.

However, there are significant disparities when it comes to gender diversity. The country scores quite high on the Gender Gap Index (59th place), especially in comparison to other South-east Asian countries such as Malaysia (107th place), and performs well in education, economic participation and equal pay.

Business and politics

Action, however, should be taken to promote women in leadership roles in business and politics. Female board and ministerial representation now stands at 8.3 per cent and 18 per cent respectively. (The world average is 24 per cent and 22 per cent respectively).

Malaysia outperforms Singapore in the area of female board representation; it currently stands at 11 per cent. However, Malaysia lags Singapore in the number of female ministers; only 6 per cent of available positions there are currently held by women.

BoardAgender, an initiative launched by Singapore Council of Women's Organisations (SCWO) and endorsed by the Ministry of Social and Family Development in Singapore, highlights that businesses can benefit from promoting female leadership and how the advancement of women in the workplace can be achieved.

Non-governmental organisations such as the Association of Women for Actions and Research (AWARE) are also heavily involved in raising awareness of the gender gap in leadership roles. They frequently push for the country to take active steps to increase the number of women in Parliament to 30 per cent in order to meet the target set out by the United Nations.

No gender quotas

It is a point of concern though, that there is no institutionalised approach to promoting diversity in leadership positions.

One of the issues is that there are no gender quotas, which would encourage companies to help women get to the top positions. This, however, should not be a standalone strategy. Appropriate training and education, to ensure the candidates in leadership roles are equipped with the right skills and knowledge, are of an equal importance.

Improving gender diversity cannot be solely dependent on the policies of the Singapore government or rely entirely on non-governmental bodies; it must also come from the private sector.

It will soon become obligatory for listed companies to disclose their diversity policies, particularly surrounding board selection. Increasing transparency is the first step, and it is hoped that it will lead to real change in the make-up of boards and top level roles.

Companies should adopt clear and transparent policies facilitating career progression. They should engage with their talented female workforce and encourage them to apply for top positions. In her speech at the launch of the Singapore Board Diversity Report last October, Minister in the Prime Minister's Office Grace Fu said that exploring different selection procedures and reaching out to candidates from outside the well-known social circles could also have a positive contribution to both gender diversity and business productivity; doing so brings together innovative ideas and new talent.

The problem of gender inequality needs to be addressed at all levels of employment. Recruitment and talent nurturing should be visible across all stages of career development, enabling women to get to the top.

Training and career advice, especially to give female employees the confidence to consider becoming future leaders, is essential to achieve the objective of increasing gender diversity at the top.

Increasing flexibility

Singapore has a track record of making efforts to address inequality: gender discrimination is banned by law, and women have the legal right to return to work after maternity leave. However, in contrast to many other countries, flexi-work has yet to be embraced by the majority of Singaporean businesses.

It is vital that flexible opportunities are opened up to everyone - not just women. Often, women can be seen as "not up to the job", and offering flexible arrangements that are exclusive to women could support the idea that women are in some way less able or less committed to the business than men are.

After taking time out, women can often re-enter the workplace to find that new developments have passed them by, or that they have missed out on vital promotions. In order to entice women back into the workplace, companies should make sure they have a development plan so that women can learn new skills and get back on track.

Although there is a cost attached to this, it is significantly cheaper than training a new employee from scratch.

Vital for success

People too often underestimate the positive impact a diverse workforce can have on business; not just at the top but across all levels. Diversity meets increased stakeholder demands for ethics and morals and can also have a profound economic effect on a company.

McKinsey & Company's research shows that companies ranked in the top quarter on gender diversity are 15 per cent more likely to have financial returns above their national industry median.

What's more, if everyone is offered equal opportunities, morale tends to improve, which in turn means that workers are more productive and levels of staff retention are better. Diversity is good for business, and Singaporean companies would be advised to take advantage of its benefits.

The changes required will happen over time if everyone is committed to the idea of greater diversity in Singapore - both companies and individuals. Singapore needs to take advantage of the pool of unused but available skills held by its future female leaders - it is the best way for it to continue to grow.