In 2011, there were only a handful of countries that were already committing to actions on boardroom diversity. Today, in the seventh edition of the report, done in collaboration with The 30% Club, there are updates for over 70 markets, nearly all of which have local organisations or governments committed to increasing the number of women serving on company boards.
Over the years, the conversation has extended beyond gender to ethnic and racial diversity, age, experience and skills, and an increased awareness of climate on corporate boards. But the one thing that has not changed in the nearly 12 years since the inaugural report is that progress is slow – the latest edition finds that women hold 19.7% of board seats globally, an increase of just 2.8% from the report’s previous edition published in 2019. If this rate of change were to continue every two years, the world could expect to reach near-parity in 2045 or over 20 years from now. Evidently, even as private and public sector efforts demonstrate steps towards achieving parity, the pace of collective progress needs to pick up.
DISPROPORTIONATE PROGRESS IN LEADERSHIP ROLES
While global female board representation increased slightly in 2021, progress at the chair and Chief Executive Officer (CEO) levels is less apparent, underscoring the notion that placing more women on corporate boards does not necessarily equate to progress across leadership positions.
The latest research found that only 6.7% of board chairs are women, representing just a 1.4% increase from 2018. Even fewer women – 5% – hold the CEO role, representing only a 0.6% increase from 2018.
Nonetheless, the research revealed a positive correlation between female CEO leadership and board diversity. Companies with women CEOs have significantly more women on their boards than those run by men – 33.5% versus 19.4%, respectively. The statistics are similar for companies with female chairs (30.8% women on boards have female chairs versus 19.4% women on boards have male chairs). The inverse is true as well, with gender-diverse boards more likely to appoint a female CEO and board chair.
WOMEN OCCUPY BOARD SEATS FOR FEWER YEARS THAN MEN
The research reflected a decline in the average tenure among women directors over the past several years, particularly in comparison to that of men. Average global board tenure for women slipped from 5.5 years in our previous edition to 5.1 years today.
In large part, this can be explained by the greater number of women on boards. The most probable explanation is that more women have joined boards in recent years, and they have had less time to accumulate experience. Or, it could be that women who are retiring or rotating out of board service are being replaced by other women, further decreasing the average tenure.
On the other hand, we also see declining tenure in a few countries where the number of women joining boards has undergone little change since the last edition.
In light of this, there are a number of possible explanations for what we are seeing. One is that experienced women now have a broader range of opportunities to select from, such as executive positions that encourage them to leave boards earlier than men. We intend to pursue additional research on the correlation between the number of women on boards and their average tenure, and it would be interesting to see how trends will develop in the coming years.
PROGRESS IN SOUTHEAST ASIA
Countries in Southeast Asia included in this report are Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, and they have collectively fared better with an average of 17.1% of women in board seats compared to 14.3% in 2018 (Figure 1). This outperforms the Asia average of 11.7%, and is closing in on the global average of 19.7%.
In terms of percentage change, the region reported a 2.7% increase from 2018, which is consistent with the 2.8% increase globally. Malaysia (3.4%), the Philippines (3.8%), Singapore (3.9%) and Thailand (3.6%) reported better percentage increases, surpassing the global figure, while Indonesia saw a 1.0% decline.
The research showed polarising results (Figure 1) where, even though 6.0% of board chairs are women in Southeast Asia, the percentage change is more widely dispersed. Most significantly, Indonesia saw a negative 2.4% change, and Malaysia and Thailand reported positive 2.6% and 1.2% changes respectively.
For comparison, when looking at CEO roles held by women (Figures 2 and 3), Singapore (13.1%) and Thailand (11.6%) are ranked first and third respectively among the countries included in the report. The Philippines comes in at 6.8%, Malaysia at 3.7% and Indonesia at 3.1%.
These findings reinforce that while women’s participation in boards in the region has gone up since 2018, the perception and perhaps the acceptance of women assuming top leadership positions in boards are significantly varied across geographies.
The tenure of women in board seats in Southeast Asia has either remained stable or seen a decline, with the average tenure having decreased most sharply in Singapore, from 5.0 years to 4.4 years (Figure 4). The percentage change for the tenure term has also decreased for Malaysia and the Philippines; this could be due to the wider pool of women candidates in these countries, given that the overall women participation on boards has increased.
WHAT MORE CAN BE DONE
2022 could be a year of opportunity for the appointment of more women on boards as companies re-evaluate the needs of their board in a post-pandemic business climate.
Consistent dedication and commitment are required to overcome the persistent barriers to improving gender diversity within the boardroom. Leaders must recognise, advocate, and actively advance gender parity in the boardroom even as progress remains slow.
Institutional support, in areas like equal pay and flexible work arrangements, and mentorship and sponsorship programmes for women are critical to accelerate the progress of having more women in leadership.
Deloitte, for example, helps to advance gender parity in leadership roles through impactful and tangible initiatives like our Board-Ready Women Programme. The initiative aims to encourage more women representation in corporate boardrooms by preparing qualified women executives for board service, and laying the foundation for future placements on public and private company boards of directors.
Whether by addressing bias, implementing programmes designed to help women prepare for board service or supporting legislation, we all have a part to play in advocating for a more diverse and equitable future.
Source : WOMEN IN LEADERSHIP AND BOARD DIVERSITY – ISCA Journal
By Seah Gek Choo (Singapore)
Seah Gek Choo is Deloitte Southeast Asia’s Centre for Corporate Governance Leader
