Mr Desmond Lee, Minister for Social and Family Development
Assoc Prof Muhammad Faishal Ibrahim, Senior Parliamentary Secretary for Social and Family Development
Co-chairs of the Council for Board Diversity Mr Loh Boon Chye and Mrs Mildred Tan,
Ladies and gentlemen,
Good Morning and I wish everyone a Happy New Year.
Thank you for coming today. I am glad to host this first engagement session with the newly formed Council for Board Diversity. Let me begin by thanking all Council members for volunteering in this meaningful work of increasing female representation on boards. I am encouraged that we are proactively making strides to improve women’s participation on boards across the private, people and public sectors in Singapore.
The benefits of having more diverse boards are well known and accepted. The diversity allows organisations to have access to fresh perspectives for better decision making and risk management. This has been shown to lead to more robust corporate governance and improved stewardship of organisations. Governance is a journey. We should progress as rapidly as we can, so that organisations can realise the benefits and sustain performance into the future.
Women on boards is one aspect of board diversity. It is an important and visible form of diversity widely tracked by institutional investors, governments and interest groups. It is also a useful lead-in to the subject, because as decision-makers consider having more women on their boards, they will naturally look into the other aspects of diversity that contribute to success of the organisation.
Our society is based on equal opportunity for all. Our education system is a good example. All children go through the same education system and across different measures of success, males and females perform comparably. With opportunities, potential is realised in both men and women.
Similarly, our economy has been built on principles of meritocracy and equal opportunity. With an increased demand for qualified executives fairly early on in our economic development, Singapore has had a reasonably high proportion of women executives for some time now. Many women in Singapore already contribute at senior leadership positions in their organisations. But not many serve on boards, and this has to change.
With so many capable women who can be appointed to boards, organisations have the opportunity to extend meritocracy and equal opportunity to the highest levels of leadership – their boards. As women are increasingly being appointed directors, we can prove that there is no such thing as a glass ceiling. A more concerted effort to look for suitable candidates and look widely instead of staying with accustomed sources, will bring about change. Companies could even look beyond our shores for board candidates, such as when they expand abroad. After all, overseas companies have come to Singapore for board members.
Among investors globally, the focus on the financial bottom line is expanding to other information about organisations’ interaction with the environment, society and governance. In the area of governance, having qualified women directors is a measure of the quality of governance and the corporate culture. There is no reason why the same consideration should not be applied to boards in the people and the public sectors.
Across the world, there is also heightened attention on the role of women in society. Having full and effective participation, as well as equal opportunity for leadership at all levels of decision-making in economic, political and public sectors is captured in one of the 17 United Nations Sustainable Development Goals. These goals are being adopted by more and more companies and organisations in countries across the world. The sustainable goals and environmental, social and governance (ESG) reporting complement each other for increased transparency and easier assessment.
For all these reasons, it makes sense to prioritise the effort to increase female representation on the boards across the Private, People and Public sectors. Organisations, especially those that have not had women directors, should seriously consider whether they really have valid reasons for resisting diversity and its benefits. Those that turn thought into action sooner rather than later, by casting the net wide to look for the best and most diverse talents and experience to serve on their boards, will position their organisations well, as forward-looking and responsible stewards for sustainable development in the long run.
Seeing the recommendations of the Diversity Task Force regarding Women on Boards (DTF) translated into action through the Diversity Action Committee (DAC) in the last four years has been a positive experience for me. As Adviser to DAC, I gave my views from time to time and also addressed the first 100 women recommended by some corporate leaders as being ready for boards but not yet given the opportunity. The exercise demonstrated that we do have the candidates for boards, just that we need to make the effort to identify them. What we need to do is to ensure a pipeline and ensure a sufficient supply of women candidates for boards.
The DAC later paid more concerted attention to the Top 100 primary-listed companies to lead the way and generate momentum for the rest of the companies. Many of the actions taken have borne fruit. I am told that the percentage of women on boards of these Top 100 companies has reached 15%, double what it was before DAC was formed. This is a good achievement. But of course, we all acknowledge that it is still a challenge for us to reach the first-tier target of 20% by the end of next year, and further effort is necessary.
It is a natural progression for statutory boards and charities to be included so that organisations in the people and public sectors can also harness the benefits of a leadership with diversity of thought.
Therefore, it is with great pleasure that I announce the formation of the new Council for Board Diversity which will be co-chaired by Mr Loh Boon Chye, CEO of Singapore Exchange, and Mrs Mildred Tan, Chairman of the National Volunteer & Philanthropy Centre. The Council will take over from the DAC, with an expanded scope to also look into the female representation on the boards of organisations in the people sector and public sector.
The Council will focus on efforts to (a) raise awareness of the importance of board diversity, (b) engage and work with stakeholders and partners to develop the pipeline of board-ready women, and (c) work with the Government on policies and programmes that impact women on boards. We are sending a strong signal. Not only does it intend to create impact, its name also signify that the Council is here for the long-term good for boards.
As patron of the new Council, I am confident that the Council will continue the good work of the DAC to build conviction of the value of having more women directors on boards. I look forward to working with Boon Chye and Mildred, as well as the rest of the Council members to raise public awareness of the importance of board diversity and increase the representation of women on boards.
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