Shame for not supporting gender diversity

CORPORATE heads who dismiss the Government’s policy on gender diversity as mere lip service will soon find out how wrong they are. For some of them, their folly will be exposed in a very public way. But they cannot say they have not been warned.

Over the last few years, the private sector has been encouraged to fill at least 30% of their key decision-making positions – including in the boardrooms – with women who are qualified to do those jobs.

Some measures have been introduced to nudge businesses in the right direction, but the change is neither fast nor broad enough.

In his keynote address at the Invest Malaysia conference in July, Prime Minister Datuk Seri Najib Tun Razak announced that as of December 2016, women made up 30% of the top management of listed companies. But the figure excluded CEOs and directors.

For example, less than 17% of board seats were occupied by women. Najib pointed out that 17 of the top 100 companies on Bursa Malaysia did not even have a single woman director. The target is to have at least 30% women at board level in these listed companies.

This time, a stick will be wielded. From next year, said Najib, the Government would name and shame listed companies with no women on their boards.

He reinforced this point during a National Transformation 2050 (TN50) dialogue on Monday, saying the list of these companies will be published.

“I can also threaten them by not giving gov- ernment contracts for the really recalcitrant companies,” he added. “That way, I believe there will be a dramatic change in women representation on boards of directors.”

That went down well with the crowd at the event, which was part of a business summit for women.

We can assume the “recalcitrant” corporate leaders had the opposite reaction. There is probably a lot of anxiety over the possibility of being publicly held up as a bad example. It gets a lot worse if a company loses the chance to do business with government agencies.

This may prompt companies to protest any move to penalise those without women directors.

They are likely to offer excuses such as difficulty in identifying and recruiting suitable candidates, and the argument that this tough approach will lead to tokenism instead of gender diversity built on meritocracy.

The Government must stand firm on this matter.

The listed companies are among the country’s largest and most successful businesses and they have many stakeholders.

It is unacceptable that their boards lack diversity. It is a reason to worry about whether the directors’ decisions are made with sufficient independence, objectivity and a healthy mix of perspectives.

If corporate Malaysia is slow to appreciate the importance and value of gender diversity, they have to learn that there is a cost to ignoring what women bring to the boardroom table.