More onwardly and upwardly on gender

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??This week: The proportion of corporate board seats held by women continues to inch up, according to the latest statistics by the Council for Board Diversity (CBD).

As at end-June 2023, women occupied 22.7 per cent of board seats – or 190 of 837 directorships – among the 100 largest primary-listed companies on the Singapore Exchange by market capitalisation, according to CBD data. That is tantalisingly close to the CBD’s near-term target of 25 per cent by 2025. If just 20 of the 647 male directors had been replaced by women, the 2025 target would have been met in June.

The progress has encouraged CBD to look beyond merely getting women on boards, to the issue of the quality of women’s participation. Mildred Tan, co-chair of CBD and chair of Tote Board Singapore, said in a statement:

“With more widespread recognition of the benefits board diversity brings to an organisation, efforts can now extend beyond advocating for an increase in women board directors, to them taking on leadership roles within boards. At present, only 9 per cent of boards at top 100 companies are chaired by women, and women sit on less than a quarter of all audit, nominating and remuneration committees. There is plenty of anecdotal evidence that boards with women in leadership positions are more likely to harness diversity as a business imperative.”

While the progress on women’s board participation is commendable, it’s also important to recognise that Singapore companies’ boards are still far from being gender balanced.

It’s worth asking whether CBD is aiming high enough, to maybe 35 per cent or 40 per cent by 2030.

Now that the 2025 target seems achievable, perhaps there’s value in asking whether CBD should aim for a faster pace of change. Compared with other major markets, women’s board participation rate in Singapore remains underwhelming. Board seats among the index stocks in Australia, New Zealand and the United States are already north of 30 per cent, and those markets do not have quotas as well.

CBD’s level of ambition flows through to the Singapore market, which takes its cue from the nation’s preeminent group on board diversity. For instance, Singapore’s largest bank, DBS, has adopted the same 30-per-cent-by-2030 target as CBD. Women held only two of DBS’ 10 board seats as at end-June. Perhaps progress could come faster if companies simply dared to aim higher. It might be worth it for CBD to stretch a bit more.

?? Top ESG reads:

1. Mail carrier Singapore Post is pushing the diversity envelope by being the first of Singapore’s bellwether listed companies to report non-binary gender statistics.
2. Singapore got a good deal on its reopened 50-year green bonds, but pricing was so aggressive that retail investors shunned the deal, taking only 8 per cent of the public offering.
3. Indonesian coal producer Geo Energy Resources has invested in an electric vehicle startup, but is it really a renewable energy investment as suggested?
4. Malaysia has set aside RM2 billion (S$582 million) to seed the National Energy Transition Facility to catalyse blended finance for energy transition projects.
5. Tearing down a green building to build a new one incurs an unnecessary emissions cost through embodied carbon, says Wong Pei Ting.

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