A joint Singapore Exchange S68 Regulation (SGX RegCo) and Council for Board Diversity (CBD) study found that 89% of SGX-listed issuers have disclosed a board diversity policy. Of the remaining 11%, more than half had not reached their deadline for board diversity policy disclosure.
According to the findings, the consumer non-cyclicals, real estate and financial sectors performed well in their overall disclosures.
Of the largest 100 companies by market capitalisation, all but two disclosed their board diversity policy within the cut-off time for the study, with the last two companies disclosing in response to SGX queries.
SGX RegCo and CBD appointed PwC Singapore to conduct the review of 538 SGX-listed issuers' board diversity disclosures published as of July 31.
Established by the Ministry of Social and Family Development in 2019, CBD leads efforts to encourage organisations across the private, public and people sectors to leverage board diversity for business value.
Mildred Tan, co-chair of CBD, says: “We’re glad to see SGX-listed issuers expressing how cognitive diversity — from a combination of skills, talents, experience — is serving the strategic ambitions of their organisation.”
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“It is our hope that by benchmarking and establishing exemplary practices through this study, companies can learn from each other and refine and adapt practices that are effective in enhancing organisational resilience,” she adds.
“Board diversity promotes good decision-making. A diverse board is likely to be more successful in crafting strategy and ensuring the company thrives for the long term. The high adoption rate found in this study suggests most listed issuers have incorporated diversity into the board governance framework,” says Tan Boon Gin, CEO of SGX RegCo.
Of the issuers who disclosed a board diversity policy, 41% published targets, 21% provided plans and timelines and 11% reported progress towards their targets.
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However, Tan notes that the level of detail in disclosures varied significantly, consistent with it being the first year for such disclosures.
“We want more measurable progress in the future, especially in quantitative aspects such as targets, plans and timelines. SGX RegCo will be closely monitoring how companies perform on this front,” he says.
Clare Payn, senior global ESG and diversity manager at Legal and General Investment Management, adds: “We recognise that disclosure is key in diversity, but currently we’re seeing boilerplate statements and commitments that neither offer value nor do they do more than provide limited insight to investors.”
“An important step change would be to have clear, ambitious targets and to understand how a diversity policy and the actions to deliver it are in-built into a company’s strategy: this is where it should sit, and where it will be of most value,” says Payn, who is a member of the report’s advisory body.
According to Nikko Asset Management president and head of Asia ex-Japan Eleanor Seet, issuers in Singapore should expect to face market pressure and not risk being “inward looking”, satisfied with the current state of disclosures. “We need to remain relevant and competitive with moving international standards, and market and societal expectations.”
Seet, also an advisory body member, shares: “Companies might find it constructive and holistic to consider a board matrix for board planning and evaluation purposes as an initial step towards enhancing diversity. Expressions of current and desired matrices can serve as a positive exercise in aligning goals and communicating them.”
