This article was first published in the September 2015 Malaysia edition of Accounting and Business magazine.

The Malaysian government’s target of having more women represented on the boards of public listed companies (plcs) has received a boost with the launch of the Malaysian chapter of the 30% Club. The club, which is based on the 30% Club founded in the UK, is expected to serve as a catalyst towards increasing the representation of women on the boards of plcs to 30% by 2016.

The Malaysian chapter of the club was officially launched on May 8 by Prime Minister Datuk Seri Mohd Najib Tun Razak in Kuala Lumpur at ‘Lead the Change: Getting Women on Boards’, an event jointly organised by the Ministry of Women, Family and Community Development, the Performance Management Delivery Unit (Pemandu) at the prime minister’s office, and Bursa Malaysia. The club’s founding chairpersons are Tan Sri Megat Zaharuddin Megat Mohd Nor, non-independent non-executive chairman of the board of Malayan Banking, Tan Sri Jeffrey Cheah, founder and chairman of Sunway Group, and Tan Sri Zarinah Anwar, former chairman of the Securities Commission (SC) and current chairman for the Malaysian Venture Capital Development Council and the Capital Market Development Fund.

At a press conference following the launch, Zarinah said one of the first things to be decided on is the setting up of the club’s infrastructure. ‘This is to enable us to recruit the kind of resources that we will need to run our programmes, set strategies and policies. There is no need to reinvent the wheel, given the progress of the UK’s 30% Club over the years… we need to adapt to our circumstances and just run with it,’ she said.

Megat Zaharuddin added that analysing the right strategies to increase the representation of women on boards is crucial, as ‘the cookie-cutter approach will not work. He drew examples of the challenges faced in getting women on the boards of plcs in the financial services sector.

‘The demands on the boards are high because these companies are highly regulated and as a consequence, based on my experience speaking to women and asking them if they want to join the board of Maybank for example, so many have said no. It is a real challenge,’ he said, adding that he hoped that the 30% Club would ‘contribute towards mapping out the appropriate strategies’ for change.

Means to an end

Zarinah also expressed hope that the club would dispel any confusion over the target set, and whether it is mandatory. ‘One of the challenges that I have come across is this preoccupation with targets and quotas but that is not the point. The point is do we believe in the end goal and that is to use the 50% talent that the country has to create value? 

‘The target is a means to an end… and if we believe in the goal then it does not matter how we get there. What takes us there in the most speedy fashion is what we should be striving for,’ she said.

Increasing the representation of women on boards is a subject close to Zarinah’s heart – as she was responsible for incorporating the 30% target into the Malaysian Code of Corporate Governance before she retired as SC chairman. ‘So you can imagine my disappointment when one year before our target date we are nowhere near our target,’ she said, adding that she needed no persuasion to come on board as one of the founding chairs of the 30% Club.

The target of having women account for 30% of board positions was set in 2011 in the 10th Malaysia Plan, which also aimed to boost female participation in the workforce to 55%. In his speech at the launch, the prime minister said that when he set out his vision of having women make up 30% of decision-making positions, the public sector had already reached the target in the Jusa C and above grades (equivalent to executive director and above).

‘I wanted to see women make up 30% of C and C-1 positions in all public companies. And according to a survey conducted by Talent Corp and PwC last year, women now make up 24% of top management positions in plcs. So this objective is progressing well. I also wanted to see women make up 30% of the boards of all public companies. But on this we are currently behind target. The figure is only 16% at present for public company boards; and for listed boards, the percentage is even smaller, at 10.3%,’ he said.

Malaysia was however, on track for hitting its target female labour participation rate, which rose from 46% in 2009 to 53.6% in 2014.

As part of the government’s move to boost the number of women on boards, the NAM Institute for the Empowerment of Women (NIEW), an agency under the Ministry of Women, Family and Community Development, has created a training programme for women, and to date some 900 women are ‘board ready’.

However, only 26 of these women have been appointed to boards, according to the ministry. This is where the 30% Club can play a role, said Zarinah. ‘We have a supply of board-ready women candidates so there has to be matching between supply and demand…One of the roles that the club can play is to help businesses better appreciate the need to have women on boards to stimulate demand, and then help match the candidates with available board positions,’ she said.

Raising awareness of the importance of gender diversity on company boards remains key despite the fact that the target was announced in 2009. Talent Corp CEO Johan Mahmood Merican who moderated a panel discussion following the launch of the 30% Club, noted that the question on the rationale for the 30% target still persists.

Genuine diversity

ACCA chief executive Helen Brand said: ‘The bottom line is about business performance and competitiveness and if you don’t have genuine diversity within your organisation and in the boardroom, then you’re not going to have that competitiveness. If only to avoid group-think, I think appointments to the board need to be more creative. We tend to fall into that trap of recruiting in our own image, which has repercussions because we are essentially thinking that what we have before is what we need for the future.’

Steering committee member of the UK’s 30% Club Elizabeth Passey concurred, adding that the biggest rationale of having a board in the first place is that they challenge executives and offer different ways of thinking about things.

‘But if you have a board that is exactly the same as the executives or thinks in the same ways you’ve missed all the blind spots because you’re all looking in the same direction. No one has got their back looking the other way and spotting the thing that is going to come and blow up your company because you’re all thinking the same brilliant thoughts… Diversity is when people think differently,’ she added.

SC Chairman Datuk Ranjit Ajit Singh added that investors also play an important role in pushing for diversity: ‘They must begin to say that they would like to see more diversity in the companies they are investing in.’

Members of the panel welcomed the move by the government to allow executives of government-linked companies to serve on boards of other listed companies in a bid to get more women on boards of plcs. This is already a practice at Shell, disclosed Shell Malaysia chairman Iain Lo, adding that it has also been a useful retention tool.

Sharing some insight into the approach Shell has taken, Lo pointed to the idea of sponsorship: ‘It’s different from mentoring, and it’s really about advocacy because very often it’s difficult for individuals to speak up and women tend not to advertise themselves. So it’s helpful to have someone who can speak on your behalf.’

The launch also saw the receipt of 250 pledges from the chairmen, managing directors and CEOs of plcs, 93% of whom said they were committed to increasing the participation of women on boards.

Sreereema Banoo, journalist