Are STI companies lagging behind board diversification?
The percentage o new women directors dropped to 28% in 2021.
Companies in the Strait Times Index have been lagging in their journey towards board diversification, the Board Monitor by Heidrick & Struggles revealed.
Based on the study, Singapore boards have yet to break from tradition and are still focused on hiring directors with CEO experience (51%), and less of people with CFO or COO experience (9%).
Compared to Hong Kong, Singapore boards are also less likely to hire first-time public board directors (53% vs 16%).
These are the opposite of what "best-in-class boards" are doing, according to Heidrick & Struggles.
According to the expert, best-in-class boards seek new directors whose
backgrounds go beyond CEO, such as CFO and COO, and are also open to first-time board members.
Apart from these, Heidrick & Struggles said boards who are leading the diversification race are also bolstering ESG capabilities by casting a wider net for new board candidates.
Others, meanwhile, are creating a space for temporary seats at the table or bringing in voices from outside, incorporating their future business strategies and scenarios into succession planning and thinking of succession planning as an ongoing exercise rather than an exercise undertaken in reaction to an annual deadline.
"Boards must consider what new skills and experiences are necessary to future-proof themselves to lead companies in an increasingly uncertain environment," Heidrick & Struggles stated.
Meanwhile, the report also stated that The percentage of new women directors dropped to 28% in 2021, and the average age of directors rose to 63 from 59.