For a long time, women were under-represented in boardrooms. However, slowly but surely, this is starting to change. According to key findings of Deloitte Global’s Women in the Boardroom report, women held about 19.7% of board seats globally in 2021, an improvement from 16.9% in 2018 and 15.0% in 2016.
The C-suite category has also shown some improvement, with 5% of CEOs last year being women, up from 4.4% in 2018, while 15.7% of CFO positions are held by women, up from 12.7% in 2018.
Although there was an increase in female board representation last year, the progress at the chair and CEO levels is less apparent. This underscores the notion that placing more women on corporate boards does not necessarily equate to progress across leadership positions.
The research also revealed a positive correlation between female CEO leadership and board diversity. Companies with female CEOs have significantly more women on their boards (33.5%) than those run by men (19.4%).
The statistics are similar for companies with female chairs (30.8% women on boards, compared to 19.4%, respectively).
The inverse is true as well, with gender-diverse boards more likely to appoint a female CEO and board chair.
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In Southeast Asia, the average closes at 17.1% of board seats held by women, an increase of 2.7% since 2018.
The research showed polarising results, where even though 6.0% of board chairs are women in Southeast Asia, the percentage change is more widely dispersed.
Singapore topped the charts with the highest percentage of CEO roles held by women in the region at 13.1%.
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In Singapore, there are currently no quotas in place for women serving on boards. However, the government introduced a Code of Corporate Governance in 2018, which requires company boards to have a suitable mix of skills and experience, including diversity in gender and age.
Companies must also have a diversity policy, and a company’s policies, objectives and implementation are required to be disclosed in its annual reports.
This year, Singapore’s Council for Board Diversity (CBD) is concentrating its efforts on diversity. It aims to improve the board nomination process and strengthen the pipeline of women candidates. Its revised 2019 target calls on the largest 100 companies to reach 25% women on their boards by 2025, and 30% by 2030.
For statutory boards and the largest 100 Institutions of a Public Character, the target is to reach 30% as soon as possible.
According to Deloitte Singapore’s chair Philip Yuen, the move towards greater gender parity in leadership is indeed happening in Singapore. “While Singapore has better representation of women in senior management positions and these senior leadership roles are a springboard for women to join company boards, data reveals that the pace of change is still too slow, with Singapore trailing other countries in the region,” says Yuen.
Yuen also believes that 2022 could be the year of opportunities for more women to be appointed on boards, as the nine-year rule on director independence came into effect on Jan 1.
The rule represents an opportunity for companies to reassess the needs of their board in post-pandemic business conditions.
Seeking out female candidates with the requisite skills could be part of this process. But if there are more than enough competent women, are businesses doing enough for them? A study of 577 Singapore-listed companies, developed and led by the Centre for Governance and Sustainability (CGS) at the National University of Singapore (NUS) Business School, showed that a firm’s performance is highest when it has an equal number of male and female leaders in senior management and board positions.
The study was jointly conducted by CGS, consultancy firm Connecting the Dots, and Edge Strategy, with DBS and the Securities Investors Association (Singapore) as supporting partners.
The study showed that increasing the proportion of female leaders is good — but only to a certain extent. The growth in a company’s return on assets — which measures how well a company does in relation to its assets — grows with more female leaders and peaks when the number of female leaders is equal to that of male leaders.
But this then declines when the proportion of female leaders is more than male leaders. This suggests companies should aim for an equal number of male and female leaders. They have more to do, as data from CBD shows that for the first half of 2021, listed companies on the Singapore Exchange reported only 13% for women’s participation on boards.
“Gender diversity on boards, which is an important theme in Singapore, requires a gender-balanced approach at all levels, including at universities and within companies. A strong and diverse leadership talent pipeline for board roles can best be achieved when the benefits of diversity are top of mind,” says Juanita Woodward, principal at Connecting the Dots.
Photo: Bloomberg
