'No' to quotas for gender diversity
SINGAPORE has decided against instituting quotas, enacting laws or offering incentives to get companies to appoint more women to their boards of directors.
To increase the participation of women on boards, it will instead use a softer approach; it will work with various stakeholders to, for example, provide training for women who want to become directors and include gender diversity among the list of best practices in the Code of Corporate Governance.
Minister for Social and Family Development Chan Chun Sing, who received the recommendations from the Diversity Task Force (DTF) on Friday, said: "When we initiated this project, we didn't necessarily want to start with legislation or incentives, because that would have sent the wrong signal. The talents of the women in our population should be appreciated on their own merit."
Set up in 2012 under his ministry to look into gender diversity on boards, the DTF found that women comprised only 8.3 per cent of board directors in Singapore-listed companies, and that 57 per cent of company boards were all-male bastions.
A Diversity Action Committee that will put the recommendations into practice will be chaired by Singapore Exchange (SGX) CEO Magnus Bocker. Speaker of Parliament Halimah Yacob, who initiated the project when she was minister of state for the ministry, is its adviser.
The committee will work with stakeholders, such as the Government, the regulators, companies and their boards, and members of academia to lift the level of female representation on boards.
The DTF has recommended, for example, that:
Senior government leaders continue highlighting the importance of gender diversity on boards;
More emphasis be put on the issue in the Code of Corporate Governance;
Programmes be introduced to train and develop board-ready female candidates;
Research on gender diversity be publicised;
A local resource on pro-diversity best practices be set up;
Existing "board match" initiatives in corporate and non-profit sectors be leveraged on;
Companies develop a gender-diversity policy and discuss the issue at board meetings.
Mildred Tan, managing director of Ernst & Young Advisory and chairman of the DTF, expressed the hope that 1,000 women would be trained and board-ready by 2020 - meaning they would occupy a fifth of all directorships.
Mr Chan said the less prescriptive approach may seem a harder route to take than the legislative or quota route, but that the quota route would be counter-productive in the long term.
"If there is no real appreciation for the talent and what our womenfolk can bring to the table on their own merit, then I think we have failed them. I don't think our women need (prescriptive) kinds of action to affirm what they are capable of," he added.
Yeo Lian Sim, special adviser at SGX and a member of the DTF, took that thought further: "If we start with quotas, it might be all too easy (for companies) to just meet the numbers without actually addressing the issue - which is to have a representation on the board that's good for the company."
Mr Bocker said of the good that had come out of the DTF's work on a complex issue: "I think the DTF has created some simplicity to all this complexity by coming up with real, hands-on things that we can do."