Singapore’s push for diversity in boardrooms expands beyond gender

(Photo credit: ST Photo/Jason Quah)

Source: The Straits Times

In the latest report by an advocate for board diversity in Singapore, a small note shows that a 21-year-old sat on the board of a non-profit organisation in 2024.

Still, at 56, the average age of board members of 683 registered charities designated as institutions of a public character (IPCs) here is not far off the average of 59 among all companies listed on the Singapore Exchange (SGX).

But the focus on such numbers in the report by the Council for Board Diversity, which looked at the boards of companies, IPCs and statutory boards, reflects the attention to factors beyond gender.

In an interview with The Straits Times, the council’s co-chair Goh Swee Chen said: “When the council first started, the focus was on gender. We recognise that the work there is not completely done yet... but we also want to expand the definition now beyond gender, to look at other aspects of diversity.”

The council, which now has 13 members, was established by the Ministry of Social and Family Development in 2019 to promote greater diversity on boards across the private, public and people sectors, with a target to have a minimum of 30 per cent women directors. 

For listed companies, the timeframe to achieve this voluntary target is 2030.

In 2024, women comprised 25.1 per cent of the boards of the top 100 companies listed on the SGX mainboard, the council report in May showed, up from 16.3 per cent in 2019.

Efforts to raise gender diversity on Singapore boards have continued despite the recent backlash in other countries against diversity, equity and inclusion (DEI) policies, Ms Goh said alongside her co-chair, Mr Gan Seow Kee.

Since US President Donald Trump took office in January, he has issued orders aimed at dismantling DEI programmes across the federal government and the private sector. The White House said in a fact sheet “that hiring in all parts of government should be based solely on merit”.

But this has not affected Singapore’s stance on diversity.

Ms Goh, who is also the chair of the National Arts Council and the Nanyang Technological University board of trustees, said:

“The foot hasn’t been lifted off the accelerator. In fact, we’re expanding it.”

This can include having board members with different areas of expertise, she said, adding that diversity is important in unlocking talent and giving the company access to ideas.

“From the outside, we also want Singapore to be viewed as a modern, progressive society that is open to people from different backgrounds,” she said.

Mr Gan noted that Singapore company boards are becoming more diverse in terms of age.

This is partly the result of new regulations announced in 2023 stating that directors who have occupied board seats in the same company for more than nine years will no longer be considered independent, he said.

While the average age of all directors of the top 100 listed companies remains at 61, the average age among first-time directors in 2024 at these firms has dropped to 55.

Mr Gan, who is also chair of Singapore LNG Corp, said there is value in having younger directors.

“We’re not pursuing having younger directors for its own sake, but they can bring fresh perspectives and knowledge, for example, on emerging areas, new technologies and so on.”

But the average age of board directors is also unlikely to drop too much, such as to 35 years old, he said. “Sometimes we see very young promising executives or start-up founders, and we think they will be really great board director material. But they are very busy in their careers and may not be able to commit as much time to board duties. So that’s always a bit of a struggle.”  

While progress has been made, the council’s report also noted that 31 per cent of all listed companies still had all-male boards.

Among the top 100 listed companies, this figure dropped to 9 per cent. Five of these companies had been led by men-only boards for more than a decade.

No-quota way to diversity

Ms Goh said:

“We have made tremendous progress, but we still have to tackle some of these all-male boards. But we want to use more of the carrot than the stick – we don’t want to go to them and say, ‘Where are your women?’. You want it to be a process where people making decisions see how diversity unlocks talent, and it becomes natural instinct to them.”

Mr Gan said these companies have a range of reasons why they have remained all-male at the board level. “There’s comfort in the status quo, especially if you have traditional firms where the founder has a very strong sense of who will fit on his board,” he said.

Some companies also need to be aware of a wider pool of diverse qualified candidates and tap them, he added. “Instead of relying on the referrals from their friends or friends of their friends, they can expand the candidate search to professional search firms and other networking sessions that the council conducts.”

But Mr Gan also asserted that mandating gender quotas is not the way to go, even if it will put an end to all-male boards.

“My view is that this may boost the numbers in the short term, but I’m not sure that this is sustainable in the longer term. It may also lead to unintended consequences, as companies seek to comply. They want to check the box, and so we’re not really getting the value of diversity,” he said.

Diversity should also be merit-based and voluntary, with firms adopting it because they understand its value, Mr Gan added.

“I think some of the backlash that we see in the US is actually a pushback against diversity at the expense of merit,” he said.

“We champion merit-based diversity because we believe that diversity, when harnessed appropriately with inclusion, will strengthen the board and enhance the organisation’s performance.”

Ms Goh added: “We don’t say the job is done when we hit the target. The end goal is, we want people to have access to the opportunities that exist.”

Agreeing, Mr Gan said: “It has to become part of the culture, not only at the board level but also throughout the whole organisation. Diversity becomes part and parcel of the way they think, the way they live.”