Firms with all-male boards have lower ROEs, shows NUS study

Singapore is trailing regional peers in terms of diversity.

Listed companies with all-male boards posted lower returns on equity compared to firms which have at least 10% female representation in the boardroom.

A study by the National University of SIngapore (NUS) and Korn Ferry showed that Singapore boardrooms which have at least 10% female representation had an average ROE of 15.5%, compared to 13.1% for boards with a female representation of less than 10%.

However, Singapore continued to trail its regional peers when it came to gender diversity on boards. Women occupy 7.4%of board seats in Singapore, a marginal rise from 6.8% in 2012, echoing similar results from an earlier study between CGIO and BoardAgender.

The latest study found that Singapore boardrooms which have at least 10 per cent female representation enjoyed, on average, 15.5 per cent ROE, compared to 13.1 per cent at boards with a female representation of less than 10 per cent.

All-male boards continue to be prevalent in Singapore, making up 52% of all boardrooms in 2013, although this is down from 58%  in 2012. This places Singapore ahead of only South Korea and Japan, and on par with Malaysia. All other countries surveyed had fewer all-male boards.

“Singapore has seen only marginal increases in its number of women on boards, and all-male boards remain the norm. As female representation remains generally low in Singapore in comparison to other APAC markets, there is significant potential for companies to benefit from greater gender diversity in their boardrooms”, said Associate Professor Marleen Dieleman, Associate Director of CGIO, NUS Business School.

The study found that the regional average for female representation in boardrooms stood at 9.4%, up from 8% in 2012, and there were fewer all-male boards in most countries surveyed.