Sias Diversity Awards: Not simply a box-ticking exercise

IN a dynamic business environment, the need for individuals with diversity of thought and experience - who can spot new opportunities and risks - is clear.

This year, the Securities Investors Association Singapore (Sias) recognised in-flight caterer and ground handler SATS, tech manufacturer Venture Corp and conglomerate Singapore Press Holdings (SPH) for the diversity of their boards. SPH publishes The Business Times.

SATS, which won the top award for board diversity, has 5 female directors on its 11-person board. Non-Chinese directors make up 27.3 per cent of the board.

Runners-up Venture Corp and SPH also saw improvements to the gender make-up of their boards. A third of Venture Corp's board positions and about a quarter of SPH's board positions are filled by women.

There has, in recent years, been a push for greater female presence on boards. The Council for Board Diversity (CBD) has a target for the top 100 companies to have 25 per cent female participation on boards by 2025.

"If organisations with no or few women on their boards take decisive action to look beyond the typical director profile and seek out worthy candidates from a wider pool that includes both genders, they would certainly be able to find women with new insights and experience that could add value to their board," said CBD co-chair and Singapore Exchange chief executive Loh Boon Chye in the CBD's announcement on women's participation in boards for the first half of 2021.

Gender, however, is only one element of board diversity.

A SATS spokesperson said that the company tries to balance skills, experience, gender, age, ethnicity, industry, geographical knowledge and professional qualifications of the board composition, even if finding the right person can be challenging.

"SATS has established a good network with business leaders that gives us the advantage in looking for the right calibre of talent to join the board," she said.

Venture Corp, too, said having different board members with a range of outlooks, opinions and suggestions can help in collective decision-making.

"For example, in defining key policies, the views of directors from different disciplines such as finance, engineering, legal and technology help to formulate a robust, well-conceived and multifaceted policy," the company said.

An SPH spokesperson, meanwhile, said: "A diverse board will enhance the decision-making process by providing board members with a wider range of perspectives and allowing them to better identify possible risks, raise challenging questions, and contribute to decision-making and problem-solving."

Shareholders have begun paying much more attention to board compositions as a matter of good governance too.

In May this year, hedge fund Engine No 1 mounted a campaign to unseat directors at oil major ExxonMobil. The fund's argument was that these directors did not have the right experience to lead the company towards a more sustainable future.

The dissent eventually led to the appointments of Kaisa Hietala, former executive at Finnish refiner Neste, and Gregory Goff, former top executive at Marathon Petroleum. Former IBM chief executive Samuel Palmisano and former Petronas chief executive Wan Zulkiflee were voted out.

Hietala was elected not only because she was a woman, but because she had previously served as executive vice-president of renewable products at Neste. She had likely been chosen by Engine No 1 as their nominee as they sought to reshape ExxonMobil for a more sustainable future.