In the move towards greater gender diversity, how we get there is as important as getting there.Â
Mak Yuen Teen
First published in Business Times, August 12, 2013
‘What we want is to have the poor (mostly male) directors shunted off boards and replaced by better directors, including the most qualified women candidates.’
– Mak Yuen Teen
– ST FILE PHOTO
IN AN upcoming report on board diversity in nine Asia-Pacific economies, Singapore does not fare well when it comes to gender representation.
With female directors forming just 6.8 per cent of the board members, Singapore ranks behind Australia, Malaysia, New Zealand, China and Hong Kong.
This study, a collaboration between Korn/Ferry International and myself, is an update of a 2011 study and added two other economies – Japan and South Korea. It is based on the largest 100 domestic listed companies in each of these economies. Singapore only ranks ahead of three economies where gender inequality in society is widely recognised – India (5.8 per cent), South Korea (2.4 per cent) and Japan (2 per cent).
There is a problem of boards not adequately tapping into the pool of potential female director candidates, and missing out on better diversity of viewpoints, skills and experience.
When we consider that women make up 29 per cent of chief financial officers of companies listed on the Singapore Exchange, the high proportion of women in many professions and industry sectors, and that female graduates have outnumbered male university graduates in many disciplines, including accounting and business, since at least the mid-1990s, it is not just a leaking talent pipeline we are talking about in Singapore. The pipeline to the board has burst as far as women are concerned.
Clearly, something needs to be done, but what? There is a great temptation to focus only on the numbers (the symptoms), but not enough on the causes. In addressing the lack of gender diversity, how we get there is just as important as getting there.
This brings me to a Bloomberg BusinessWeek article which caught my attention a few months ago on a long flight to New York. In this article, a female director who currently sits on the boards of some of the most “blue chip” of US companies, shared advice on how women can get onto boards. She recounted how she got her first break.
She was 28 and vice-president of sales at a small vendor to cable companies. She decided she wanted to get elected onto the board of a national association, so she called up all 2,000 members to get them to vote for her. She got elected on her second try. At that time, she was “at least three management levels down” from everyone else on the board. She started writing a newsletter and “befriended all the CEOs”. That helped her get business for her company, but she also got to know people who recommended her onto boards that they served on. She also got her first CEO job through her board connections, having served on boards with many of those who recruited her to be CEO.
As I reflected on this director’s experience in getting onto boards, it reminded me of the advice that I have heard or read given to women seeking to be directors – “go and network”, “trumpet your achievements”, “make yourself known”.
Then I started getting worried that in the great desire to reach an important destination – having better gender diversity on boards – women fall into the same trap as many men by repeating what they have done – getting onto boards purely through connections.
By her own admission, the woman in that article was “at least three management levels down from everyone else” on the first board she was elected onto. While a board needs a diversity of viewpoints, experiences and backgrounds, and not every board member needs or should be a CEO or ex-CEO, it does need people who are appropriately qualified to be able to make a difference. Her experience actually shows the flawed process which many boards use to recruit directors, where networking is such an essential part of it.
I also wondered whether her keenness to get onto boards means that she would be too afraid to offend others by disagreeing with the CEO or fellow board members. Can she really be independent if she is so keen to get onto boards through networking?
An important reason why many boards are in a bad state today is because they have the wrong people, recruited through flawed search and nomination processes. There is too much reliance on an old boys’ network and too many “Superman” directors who keep getting onto more boards because of mistaken impressions that they are the real deal.
There is clearly a need to improve the search and nomination processes of boards through much greater pressure exerted by regulators, investors and other stakeholders. Better means to identify “board ready” female candidates and to develop more female board candidates are important. Setting targets or getting companies to do so can ensure that we stay on the right track towards improving gender diversity.
What we want is to have the poor (mostly male) directors shunted off boards and replaced by better directors, including the most qualified women candidates. This does not mean that they must have served on a listed company board before (this has never disqualified men when they joined the first board). What we do not want is an old boys’ network becoming a golden girls’ network, and “Superman” directors being replaced by those dressed up in “Wonder Woman” costumes.
The writer is an associate professor in the NUS Business School and chairs the judging panel for the Investor Relations Award
