A triple-tier target has been set to raise participation by up to 30%.
Singapore's Diversity Action Committee announced that it will be adopting a “hop, skip, and jump” approach to raise women's participation on boards.
The escalating approach has a triple-tier target to raise the participation of women by 20% by 2020, 25% by 2025, and 30% by 2030.
In a study conducted by DAC previously, Singapore falls far behind many international and regional markets as at end 2016, ranking near the bottom of the list of 15 countries, ahead only of Japan and South Korea.
Minister for Social and Family Development Tan Chuan-Jin noted that the city-state is lagging behind other countries where corporations see the business sense of having women on boards.
"It is good to know that DAC, whose members come from well-established firms like Singtel, CDL, Shell, and IBM, fully understand and support the business imperative. From a national viewpoint, we should develop the full potential and talent of our women. I support DAC’s multi-tier targets,” he said.
Singapore Exchange's CEO Loh Boon Chye, the chair of the committee, has urged the top 100 SGX-listed companies to take the lead and generate momentum for all listed companies.
“These multi-year staircase targets of 20/20, 25/25, and 30/30 were adopted after the DAC had examined extensively the feasibility and reasonableness of various targets and the possible steps that companies can take to increase diversity in the context of a good governance structure and process," he noted.
Loh added, "To double the current women’s representations on boards from 9.9% as at end December 2016 to at least 20% by 2020, larger companies must lead to create a momentum of change and demonstrate the compelling benefits of having women on boards to the smaller companies."
Check out DAC's 6-step plan to achieve higher women's participation on boards below:
1. Requiring companies to disclose their diversity policies (including gender) for board and key management, measurable objectives that express their policy, and progress in achieving their objectives. Companies will be inclined to examine more closely the composition of their board and key management when making the disclosures. The disclosures also allow the market to be informed and monitor individual companies. This recommendation was made by DAC to the Monetary Authority of Singapore (MAS) in August 2016 and review of the Code of Corporate Governance which governs the disclosures, is underway.
2. Asking companies to disclose how their board compositions are suitable for upcoming business needs, drawing women directors with appropriate skills and experience from outside the traditional pool of friends and contacts. The business focus of this disclosure positions board gender diversity squarely for commercial objectives.
3. Helping companies gain an in-depth understanding of the benefits of diversity and hearing from companies, their owners and leaders who have experienced the benefits of women on boards (“WOB”).
4. Encouraging investors and investor associations, civil society to enthuse companies to move forward on diversity. If investors agree that increased diversity enhances companies’ ability to recognise opportunities and manage risk that translates into returns, they should engage their investee companies about it. DAC will do what it can to support these communications.
5. To grow the local conversation, encourage studies regarding the significance of women’s participation on boards and management as a contributor to governance, risk management and corporate strategy.
6. Work with organisations and associations which have expressed commitment to promoting board diversity and support their efforts. This multiplies the efforts dedicated to the same cause and creates awareness of the various initiatives available to companies in their journey to diversity.
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