Organisations with a higher number of women directors tend to perform better across the board.
The Singapore Board Diversity Report, conducted by the NUS Business School, concluded remuneration matters and transparency and investor relations to be significantly higher in firms with above average female board representation than those with fewer female board members.
The report found the governance and transparency index (GTI) score for remuneration matters was 5.74 for companies with higher than average female representation in the boardroom, and 5.32 for those with lower than average women directors.
In the transparency and investor relations category, the GTI score was 9.45 for those with higher number of female bosses, and 8.91 for organisations with lower female representation.
The difference in these statistics made a “high” impact when it came to assessing the overall performance of the company, the report added.
“The appointment of a new female director to a board was usually followed by improved return on assets and return on equity over the next three years,” the report said.
However, despite the positive correlation between gender diversity and company performance, the study discovered only a marginal increase in the number of women bosses in local companies.
“Of the 677 SGX-listed companies studied, 7.9% of the total number of board directors were women. This is slightly higher than last year (7.3%) and the year before (6.9%), representing a slow upward trend since the launch of the research in 2011,” the report said.
Additionally, the study found when compared to regional peers such as China (9.0%), Hong Kong (9.4%), Indonesia (11.6%) and Malaysia (8.7%), Singapore ranked poorly on gender diversity in the boardroom.
“Gender diversity remains a challenge in Singapore’s boardrooms. While this report shows some improvements, there is still much room for progress,” Magnus Böcker, chief exchange officer at Singapore Exchange, said.
“The business cause for having more gender diversity has been established time and time again. Singapore and its companies are not any different. With this in mind, I call upon SGX-listed companies to take the lead,” he added.