Malaysia banks lead South-east Asian peers for board diversity

The city skyline of Kuala Lumpur, Malaysia.
The city skyline of Kuala Lumpur, Malaysia. ST PHOTO: MARK CHEONG

SINGAPORE (BLOOMBERG) - Malaysia's large banks have the highest board representation for women across the South-east Asian region, outpacing peers in Singapore and the Philippines where the proportion is below 15 per cent.

Women make up more than 30 per cent of the boards of top Malaysian lenders, compared with only 9 per cent on average in the Philippines, and 13 per cent in Singapore, according to data compiled by Bloomberg from published information on the three largest banks in each of five countries.

The data underlines the distance that many of the region's banks still need to travel to improve gender diversity, according to Lawrence Loh, an associate professor at National University of Singapore. "As an outcome, inequality is just not acceptable," said Mr Loh, who has published research suggesting that gender diversity improves corporate governance at Singapore companies.

Banks with more women on their boards tend to perform better in measures including return on assets when female participation reaches a "critical level" of between 13 per cent and 17 per cent, provided the banks are well capitalized, according to a February study published by the US Federal Reserve.

The outperformance of Malaysian banks is likely due to the country's corporate governance code, which requires that women hold at least 30 per cent of board seats at local firms, said Meggin Thwing Eastman, the Boston-based head of impact and screening research at MSCI Inc.

However, of all the 15 banks in the Bloomberg survey, the best performer was in Thailand, where a certain level of board representation for women isn't compulsory. Bangkok-based Kasikornbank Pcl has seven female directors, or almost 40 per cent of the 18-member board.

"Gender diversity is important, as it allows for board members with different ways of approaching challenges and finding best solutions," Kasikornbank senior executive vice president Adit Laixuthai said in an emailed statement.