The official launch of the 30% Club Malaysia
Malaysia is poised to leverage on the ‘XY’ factor on its path to improve the performance of its companies. This follows the government’s commitment to encourage higher representation of female leadership across the Malaysia workforce, as a business-led voluntary approach.
This was revealed at the recent launch of the Malaysia chapter of the 30% Club in Kuala Lumpur by Prime Minister Dato’ Sri Mohd Najib Abdul Razak, and the Minister of Women, Family and Community Development, Dato’ Seri Rohani Abdul Karim.
The Founding Chairs of the Malaysia Club are corporate captains Tan Sri Megat Zaharuddin, Tan Sri Jeffrey Cheah and Tan Sri Zarinah Anwar. The event was organised by the Perfomance Management and Delivery Unit (PEMANDU) in collaboration with the NAM Institute for the Empowerment of Women (NIEW), an agency under the Ministry of Women, Family and Development; and Bursa Malaysia.
The business case for higher representation of women in senior management roles is crystal clear. Data demonstrates that companies who have a higher proportion of women in top management perform better than their industry peers.
Whether it is gaining 10% greater return on equity (ROE), 48% higher operating results, or 1.7 times share growth price, they all record a consistent theme: companies with higher gender diverse teams outperform others. [Source: McKinsey, Women Matter Oct 2007 // *Compared to Eurostoxx 600 sectoral indexes.]
As the Prime Minister said in his speech at the launch: “This is not just a women’s issue. It’s a business issue. Increasing diversity, particularly at top management and board level, is not just a matter of altruism. It makes firm sense in business terms alone.”
In 2011, the Malaysian government, recognising the stronger corporate results achieved from having a higher diversity with more women on board, set a target for women to hold 30% of decision-making positions in publicly listed companies by 2016.
More women are needed in the boardrooms
However, the progress has been slow. From 2008 to 2014, women representation in senior roles in companies grew just 2.7%, to tip the scale at a mere 10.3% today.
At that current rate, without any intervention, it will take Malaysia 84 years to reach the 30% goal.
Yet, this is not an isolated case. Poor representation of women at senior levels is a global phenomenon. Developed countries also score low on the scale, with the likes of Singapore at 8.3%, Hong Kong at 9.6% and even Australia at 18.6%. For countries like Norway, which imposed a legislative quota, the increase in representation has been marked, from 8% in 2004 to 30% in 2009, and 40.5% in 2013.
However, the 30% Club movement, which started in the United Kingdom in 2010, is quite clear that efforts to increase women’s representation at the board level needs to be voluntary, to avoid ‘tokenism’ and to ensure a ‘meaningful, sustainable, business-led change.’
To that end, the Club has achieved 23% women representation on FTSE-100 boards to-date, against the goal of 30% by end-2015. With many CEOs of top FTSE companies among their members, the Club has grown as an international movement and is today also established in Ireland, America, South Africa, Hong Kong and Australia, with Malaysia being the recent chapter.
To help spur the representation of women in Malaysian boardrooms, the Prime Minister announced a policy at the Malaysia chapter launch that that now allows government-linked companies (GLCs) top management to serve on the boards of the other public-listed companies (PLCs). He encouraged listed companies to follow suit and allow their female executives to do the same on boards of non-competing businesses.
Bursa Malaysia and the Securities Commission have been tasked to provide the Prime Minister with regular reports on the progress by PLCs, which also includes their composition and diversity of their boards and top management in terms of gender, ethnicity and age.
As Elizabeth Passey, 30% Club UK’s steering committee member said at the launch: “It’s no longer a question of why, but how and when. The role of Chair/CEOs supporters is critical as an internal advocate to push this forward.”
Indeed, PEMANDU’s CEO, Senator Dato’ Idris Jala’s call “to just do it” connected with many of the Chairs and CEOs of corporate Malaysia present at the launch, with 98% committed to putting women on their Boards.
The strong show of commitment include some of Malaysia’s largest listed companies such as from the Petronas Group, Shell Malaysia, Datasonic Group Berhad, Hibiscus Petroleum, ConnectCounty Holdings Berhad, Tune Insurance Berhad, LaFarge Malaysia Berhad, AEON Co. (M) Bhd, British American Tobacco Malaysia and Novartis Corporation.
With these collective efforts by Bursa, the Securities Commission, the Ministries, and commitment by GLCs and business community in the Club, it looks like Malaysia will not have to wait 84 years to reach the 30% goal.
Corporate Malaysia committed to the 30% target