By Meera Murugesan, The New Straits Times, August 6 2009
MEERA MURUGESAN learns that addressing the problem of insufficient women board members in public-listed companies results in far more advantages than just equalisation of the gender issue.
HOW many young girls dream of becoming a CEO or at least making it to the boardroom?
More now than before for sure, but gender balance in the boardroom is an issue that Malaysia is still grappling with.
A recent survey by Corston-Smith Asset Management has revealed that Malaysia is at the bottom compared to other Asean countries and Hong Kong in terms of the number of women on the board of public-listed companies.
The research looked at the top 30 listed companies in terms of market capitalisation in Malaysia, Indonesia, the Philippines, Thailand, Singapore and Hong Kong.
The Philippines ranked highest where 10.3 per cent of directors were female, followed by Hong Kong (7.8 per cent), Thailand (6.7 per cent) Singapore (6.2 per cent), Indonesia (5.5 per cent) and finally, Malaysia with just 5.2 per cent.
Acceptance of women in the boardroom is not an issue anymore and neither is the lack of qualified women. The challenge is in finding these women and placing them in the boardroom, said Shireen Muhiudeen, managing director of Corston-Smith Asset Management Sdn Bhd.
And given that women now make up the overwhelming majority of undergraduates in universities, whether men like it or not, the only way forward is to get this going and widen the net to find these women, she added.
Legislation may also be needed to address this gender imbalance.
In Norway, for example, a quota came into effect last year which forces listed companies to have women make up 40 per cent of their directors.
Shireen said in Malaysia, an ideal start would be a requirement for companies seeking listing to have women on their board.
“Some may question that this is too restrictive but when half the people you are serving are women and you have no women on the board to offer a view, isn’t that a very distorted picture you are creating?”
Shireen said a mixed gender board is invariably better as it encourages people to air different opinions from their gender perspectives.
Women also bring added value to the boardroom not just in terms of their expertise and knowledge, but also because they are less likely to be risk takers but more likely to ask questions. They are in many ways the ideal check and balance in any organisation.
“They are the ones who are likely to say, is this a good idea? Should we really be going this way? Shouldn’t we have another discussion or should we have a consultant come in and give his views.”
Shireen said various research houses and consultants have shown that Fortune 500 companies with the highest proportion of female directors are more profitable and efficient on the average than those with the lowest.
The research houses also found that the greatest out-performers were companies with three or more women on the board and they showed an 83 per cent higher return on equity, 73 per cent higher return on sales and 112 per cent higher return on invested capital.
“It’s simple and straightforward why more women are needed. It’s not just about addressing the gender imbalance but about helping companies make better decisions.”
Rita Sim, executive director of Sin Chew Media Corporation Berhad, also agrees on the need for a listing requirement.
Making it a requirement for companies seeking listing to have at least one woman on the board is a good way to start, she said.
But Sim believes GLC’s must take the lead in addressing this imbalance as many of them are public-listed.
There is a need to identify how many women there already are on the board of GLCs and which GLCs have or do not have women on their boards.
This, coupled with the creation of a database of qualified women who meet the required criteria and training and mentoring programmes to help women with the potential make their way to the boardroom, can be effective measures.
Sim said there are also initiatives that women themselves can take and one thing they must understand is the power of networking.
“Women sometimes don’t network enough or they only network among other women when they need to network among men as well,” said Sim, who’s also an entrepreneur and the first woman to sit on the board of British Gas Asia Pacific Holdings Pte Ltd, an international energy and utility company.
Sim explained that many women also reach their goals because of enlightened and confident men who can see beyond their gender to the potential they have and it’s important that women network among such men so they receive due recognition.
Often, she said, women tend to be focused on getting the job done without realising that it’s important to go out and market themselves. Men do it all the time whereas women tend to feel awkward or shy about doing this.
“When networking, people need to know not just who you are but what you can do so you must market yourself.”
Sim said, ideally, once women reach the boardroom, they must in turn take steps to identify other women who have similar potential and groom them for the same path.
This ensures a continuation of the process to ensure more gender-balanced boardrooms in the country.
But in Asian communities, a “cultural glass ceiling” is what keeps some women from charting their career paths all the way to the boardroom.
Women work but are still the ones expected to put their careers aside temporarily or otherwise when family matters need attention.
Sim said their multiple roles as career woman, wife and mother also proves an added challenge but if they were to have adequate support in managing their homes and families and spouses who support and share their goals, women would be able to overcome most hurdles.
Sim said many women find themselves at the helm of businesses by default instead of by choice, such as after the death of a spouse.
When they do, these women often excel because women have an innate ability to manage money and are multi-taskers and multi-skilled, all of which bring added value to a boardroom.
She also stressed that it’s important to start early in addressing this gender imbalance.
Goal-setting, common among boys, should be actively encouraged in young girls so they too have an idea of the direction their career path should take.
“How many women, as they’re growing up, say I want to head a bank or be a CEO? Young girls don’t often visualise such goals but it happens with boys. Girls must also do so and do it early.”
Shireen and Sim will be among the speakers at the upcoming Women’s Summit 2009 on Aug 18 at the Sime Darby Convention Centre.
The summit will see a cross-section of dynamic women leaders from entrepreneurs, to those in the financial and legal sectors sharing the secrets of their success.
Participants can field questions, interact with panelists and contribute ideas at the summit roundtable discussions. To view the full programme click here.