Focus on workplace, rather than boardroom, diversity

I applaud the Diversity Action Committee's call for greater boardroom diversity ("Call to get more women on S'pore boards"; last Thursday) and agree with Ms Helen Ng Sue Khion's views ("Value in having women in boardroom"; last Friday).

However, I would temper Ms Ng's opinion that having women in the boardroom yields economic benefits such as increased productivity.

Companies are profit-making entities concerned only with their own financial interests vis-a-vis shareholder returns and in this regard, there is little evidence that boardroom diversity yields above-normal shareholder returns.

There is also no significant relationship found between boardroom diversity and market value and return on equity.

From an equality perspective, increased boardroom diversity along gender and cultural lines is a worthy endeavour, and could lead to improved governance and decision-making.

But given that company profitability involves a large number of variables, it is difficult to prove that increased boardroom diversity leads to better economic outcomes.

Because boardroom diversity is a relatively new concept, it may take a long time to assess its impact on company profitability.

That being the case, companies should probably not focus so much on boardroom diversity per se as on workplace diversity in general.

In Singapore, where everyone counts, we could achieve much leverage and synergy by doing so.

Woon Wee Min

A version of this article appeared in the print edition of The Straits Times on October 10, 2016, with the headline 'Focus on workplace, rather than boardroom, diversity'. Print Edition | Subscribe