A company’s Return on Assets (ROA) and Return on Equity (ROE) can improve within three years if a female director is introduced as a member of the board.
The Singapore Board Diversity Report by the NUS Business School’s Centre for Governance, Institutions and Organisations (CGIO) and BoardAgender also found companies with higher-than-average female board representation had better overall governance and transparency scores.
Companies with higher-that-average female board representation performed 2.03% better in governance areas than those with lower representation, including in remuneration matters (0.42%) and transparency and investor relations (0.54%).
“These findings suggest that board diversity is beneficial to corporations,” assistant professor Meijun Qian of the NUS Business School and co-author of the study said.
“Yet, almost 60% of SGX-listed firms do not have any women on their boards.”
With only 8% of board directors in SGX-listed companies being women, there are still lower female representation in Singapore board rooms when compared to Indonesia, Malaysia, China, Hong Kong and Australia.
The statistics are even more alarming when looking at the c-suite level; only 4.6% of CEOs and 3.4% of chairman positions are filled by women.
The study suggests companies report on board diversity targets and their progress annually to ensure this topic remains on the organisation’s agenda.
Local companies should also take a page from neighbouring countries faring better in this aspect by taking into consideration other matters that affect and promote diversity.
Those would include mentoring programmes, tailored education, national or corporate policies addressing work-life issues, and an inclusive and supportive corporate culture.
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