Boardroom Diversity: A Question of Culture

This International Women’s Day, addressing gender equality in the workplace can no longer be just about being woke. In the wake of the #MeToo movement, the corporate world has been taking baby steps towards gender diversity in its upper echelons. Achieving gender equality is afterall a social and corporate imperative and it indubitably needs to start from the top.

Indeed, research indicates that diverse groups make better decisions than homogeneous ones. However, in Singapore, where companies are required to disclose their board diversity policy according to the Code of Corporate Governance, female participation falls behind that of boardrooms in other parts of the world.

Often, the lack of diversity in the workplace occurs because the key decision makers themselves come from homogenous backgrounds. If the existing homogeneity of the region’s boards leads to actions that impede diversity, what can be done to improve the situation?

This was the topic of the day when SMU Lee Kong Chian School of Business (LKCSB) hosted a Panel & Networking Session themed How to Get More Women in Boardrooms in Asia. At the session were Carrie Tan, the Group Director of Corporate Development and HR for Rigel Technology and Professor Rick Smith, Deputy Dean of LKCSB. The discussion was moderated by Professor Gerry George, Dean of LKCSB.

How Organisations Approach Diversity

The fact is, there exists a disconnect between the emerging recognition that boardroom diversity should be a principle of good governance, and the current reality of boardroom composition, says Professor Gerry.

The first critical step in rectifying the problem is to recognise that diversity is vital to the health and growth potential of an organisation. From a business school’s perspective, Professor Rick suggests that a diverse faculty composition is critical to maintaining a broad approach to teaching and learning, while a vibrant student population encourages a mindset of globalisation among the student body.

Of course, there is no one way for an organisation to approach diversity and gender issues, but there is still a universal need to develop a culture of inclusiveness and equality of opportunity. Carrie explains that Rigel Technology’s approach is derived from creating a demand for diversity. That requires an inclusive organisational culture and the establishment of a diversity policy that includes adopting gender quotas to increase female participation.

Such quotas, however, may bring about both pros and cons. Countries that do not mandate quota regulations on female board membership tend to fall to the bottom of global rankings on workplace gender equality, suggesting that quotas are useful for ensuring a baseline level of diversity. On the other hand, quotas could introduce the suspicion of tokenism — contributing to the impression that female participation is awarded based on gender, not merit.

Facing the Facts of Gender Biasness

Identifying, understanding and addressing gender bias is also a key challenge for many organisations. Professor Gerry points out that young women teaching in the higher-education sector tend to receive the lowest scores in teaching evaluations. Such biases are not confined to academia, but evident across all sectors. The results of a recent Singapore Institute of Directors survey show that boardroom bias is indeed an issue, particularly in industrial sectors, where many companies have no female representation at board level. This bias may arise from a variety of reasons - both conscious and unconscious - that would affect decisions made in hiring, promotion and work allocation.

One common argument for low female representation on boards is that there are not enough women of the right calibre. However, Carrie points out that board appointments are often made through an ‘old boys’ network, rather than through open recruitment. Indeed, a 2018 report from the Human Capital Leadership Institute suggested that boards tend to have rigid expectations about what a suitable director should look like, with new directors selected for having skills and experience that are similar to that of existing board members.

“This limits the board to nominate and select directors from an artificially small talent pool, often excluding females who do not fit the typical profile of an existing director,” the report states. A more gender-balanced board would thus require a selection criteria that values a wider range of skills and perspectives.

Fixing the ‘Broken Rung’

The panel suggested that the biggest issue for many organisations involves the ‘broken rung’ associated with female transitions from technical to managerial positions. In recruitment, retention and promotion scenarios, for example, men believe there are not enough female candidates, but women believe there are not enough opportunities, particularly ones that offer work-life balance.

A number of options to create opportunities of equality for women were identified, such as flexible work arrangements and a platform for open communication on gender issues within the workplace. These measures can help to mend the “broken rung” and close the gender gap in career progression.

How to Get More Women in Boardrooms in Asia?

Pushing for the diversity in the boardroom will require seismic shifts across every tier of the corporate ladder. This includes, for starters, a recognition that bias is indeed a workplace problem, and taking active steps towards reducing the gender gap in leadership positions by promoting equal opportunities — even if it means valuing traits that haven’t traditionally been highly regarded in the boardroom.

It is also important to develop creative recruitment approaches for board positions and create a pervasive culture of diversity, inclusiveness and belonging. In doing so, the payoffs could be significant; heightening awareness during landmark occasions like International Women’s Day, and in the long run for the future of all corporations.