Compulsory disclosure on board diversity allows champions to shine

THE Singapore Exchange's (SGX) decision to mandate the disclosure of board diversity policies gives corporate governance champions in the market an important opportunity to stand out above the crowd.

A new and welcome challenge now presents itself before stakeholders of the Singapore market: Can we make the best of this opportunity to improve board diversity and raise the quality of corporate governance to achieve better outcomes for companies?

Following a public consultation process, Singapore Exchange Regulation (SGX RegCo) has made the disclosure of board diversity policies part of the listing rules for financial years starting in 2022. This elevates the requirement from the more accommodative "comply or explain" approach of the Code of Corporate Governance to one where compliance is compulsory. It represents a big step forward in cementing a place in the mainstream for a fundamental aspect of corporate governance. Notably, the new requirement includes gender diversity as a key factor that companies have to address, which ensures that issuers must confront a glaring and persistent source of gender imbalance in the board rooms.