Let market forces decide boards' constitution

Who gets to serve on a company's board should be determined by market forces (Call to have 20% women directors on boards by 2020; March 24).

Companies are profit-making entities concerned solely with their own financial interests vis-a-vis maximising shareholder returns.

Investment research has yielded little or no evidence that increased female boardroom representation generates above-normal shareholder returns.

Moreover, a company's board acts on behalf of shareholders in their best interests.

If increased female boardroom representation does not increase shareholder returns, then shareholder interests are not being optimised.

Perhaps the focus should not be so much on boardroom gender diversity per se as on workplace diversity in general, along not just gender but also cultural lines.

That would be a worthy endeavour from an equality perspective in multicultural and cosmopolitan Singapore.

Woon Wee Min

A version of this article appeared in the print edition of The Straits Times on April 17, 2017, with the headline 'Let market forces decide boards' constitution'. Print Edition | Subscribe