Hundreds more women will take their places on the boards of Singapore-listed companies if ambitious targets set by the Diversity Action Committee (DAC) are met.
Established in 2014, the DAC is tackling the dramatic under-representation of women on boards here with a graduated series of targets over the next 13 years.
The DAC, chaired by Singapore Exchange (SGX) chief executive Loh Boon Chye, aims to double the current share of board seats for women from 9.9 per cent to 20 per cent by 2020; 25 per cent by 2025 and 30 per cent by 2030. If successful, this could mean women filling 460 more board seats by 2020, 690 more by 2025 and 910 more by 2030, according to DAC data.
"The first jump to 20 per cent by 2020 is indeed challenging," Mr Loh told a briefing yesterday. "It is a possibility, but not likely probable. We recognise the challenges, but it's an aspirational three-step target that we're trying to achieve."
To that end, he called on the 100 largest listed companies to "demonstrate the compelling benefits of having women on boards to the smaller companies". Larger companies should take the lead because they "have the capacity to examine governance implications without delay, and search outside traditional pools of talent", Mr Loh said.
Speaking in Parliament yesterday, Minister for Social and Family Development Tan Chuan-Jin backed DAC's targets. "Getting women on boards is a journey, and not a destination. I dislike the fact that Singapore ranks near the bottom behind other key developed markets like Australia and the UK in terms of women on boards; other countries are progressing at a much faster rate. Globally, shareholders and institutional investors increasingly view women on boards as being important for board effectiveness. This is something that Singapore corporates should not ignore any more."
Targeted share of board seats for women by 2030. The DAC aims to double the current share from 9.9 per cent to 20 per cent by 2020; then 25 per cent by 2025.
Out of 100 largest listed companies, 38 have all-male boards as of December last year.
As of December last year, 38 of the 100 largest listed firms had all-male boards. These include Hotel Properties, Genting Singapore, Global Logistic Properties and Singapore Airlines. "If each of these 38 all-male boards were to appoint a woman director, we will get to 15 per cent," Ms Yeo Lian Sim, special adviser to SGX, said.
Some factors cited by companies with all-male boards include a lack of impetus to change and a low board renewal rate.
But Mr Loh noted: "Widening their viewpoint on where to look for potential women directors is a good starting point. When they are presented with capable women directors, it naturally forces them to think about board renewal. Then it becomes a natural process.
"Companies need to search beyond traditional sources of talent. They need to either develop internal candidates, or look beyond the usual circles of recommendation. A company may want women directors who have been CEOs, but try to consider first-time women directors," he added.
The DAC still backs the adoption of higher targets for women's board representation under the "comply or explain" governance framework.
"If companies recognise this is of business benefit, with the view of a sustainable business model, the momentum of change will be greater than making this mandatory, which could speak of tokenism - where people are just trying to make up the numbers," Mr Loh said. "If you don't believe in the benefits, how sustainable that will be will come into question."