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The message was clear, women are not part of Singapore’s boardrooms despite the study suggesting that board diversity is beneficial to any corporation.
The study is in its third year and the number reflects a snail pace growth. It was 7.9% in 2012, making it an improvement of 0.6% year-on-year. Readers will wonder why they should care.
The study shows having women on the board increases company performance as well as corporate governance. Putting to rest the question of whether a new male board member would add to the performance of the company, Dr. Dieleman said 'yes, although not as much'. The reasons why companies perform better is due to the intangible features women bring, such as out-of-the-box thinking and balancing competence and warmth, as suggested by Herminia Ibarra, INSEAD, which makes these metrics difficult to measure.
Best practices in remuneration matters as well as transparency and investor relations had significant improvements in companies with women in their boardrooms. Despite this, 58.2% of Singapore’s listed companies are all-male boards. The other significant difference is the drop in companies with one woman on the board is 31.6%, compared to two women on the board which is 8.3%. This could suggest once a company gets a woman on board, it is less likely to have more than one.
In this study, Singapore ranks second from the bottom amongst its Pan Asian peers and fourth from the bottom amongst all the other countries. The worst countries are Japan with 2%, South Korea with 2.4% and India with 5.8%. Within the Pan Asian region, Australia is the best performer with 15.8%, followed by Indonesia with 11.6% and Hong Kong at 9.4%. For perspective’s sake, Singapore will achieve the growth rate of Australia in 2026, assuming that Australia doesn’t increase its pace of growth.
The bleak data on Singapore was a surprise considering the country is known for meritocracy and provides both men and women equal opportunity in education and employment. Mr. Tan Chuan-Jin, Acting Minister for Manpower suggested better framework from the government such as more childcare centres and flexible working hours from companies would support women in their career choices.
Having been to a few of these presentations with a similar theme, I noticed experts tend to conclude that women are not very good at networking, separating social life between work and family. And when given a choice they would rather head home to the family than go for a cocktail. However, I believe the reason is better explained by the 'unconscious bias' and the lack of networking exacerbates this.
Bringing this back to the financial markets, as we get used to the continuous record highs in the US equity markets which will trickle down onto Asian bourses. In situations where investors find that stock prices no longer justify valuations, they will now be able add another measure to the growth potential of a company by looking at the quality and diversity of its board members.