By Muzrifah Mohamed & Nur Idzatti Athirah Irwan Sani

In the year 1975 United Nations General Assembly has announced March 8 every year as the International Women’s Day. Annually on this day, women across the globe will be celebrated for their contributions and achievements in the social, economic, cultural and political aspects. Generally, by having women on boards, it will lead to a positive impact on the male director’s participation as women are more likely to be involved in the committees than men. The Institutional Investors Council Malaysia (IIC) has stated that its revised Malaysian Code for Institutional Investors 2022, which will be released on September 23, would say that it expects investee businesses to have at least 30% female participation on their boards within three years. This is consistent with the Malaysian Code for Corporate Governance. Under this revised code, investee companies of IIC members, which include seven government-linked investment companies (GLICs), must have clear policies to support the participation of at least 30% women on the board and in senior management, and the board must demonstrate commitment to taking concrete action to implement these policies (The Star, 2022; Vasu & Kaur, 2022) 

The current Deloitte’s report titled ‘Progress at a Snail’s Pace: Women in the Boardroom’ in 2022 shows that low statistics measures concerning on the issue of having women on board locally and globally. Based on the report, women only make up a fraction of board chairs in the Southeast Asia. Statistically, out of more than 17% of board are held by women in 2021 and only 5.3% are the board chairs in this region. Thus, these lead to downtrend trend in the average tenure of the women directors in which men tend to stay on the board longer than women. Aiming for 30% of women on boards indicates a minimum representation and getting to this minimum percentage of woman on board is not an easy task. There is a very slow progress of getting more women on board as the commitment to even reach 15% of women to be present on board within two years is difficult. Therefore, the report specifies that getting more women on board is at a snail’s pace.

The issue of having fewer women on board is not new.  It has been an issue that remains a concern not only in Malaysia (Guizani & Abdalkrim, 2022) but also globally (Kanadlı et al., 2022; Rixom et al., 2022). Fewer women on board may happen due to organizational barriers that have caused most of the Asian firms to lag in practising gender diversity (Bouteska & Mili, 2021). Women have not been making much progress in the board because only few of them have been promoted to a highly influence position like the C-suite position. There is also one assumption that men are expected to suit more for the leadership roles instead of women, as men are more aggressive, competent and independent. This sceptical gender beliefs have made it harder for women to gain and exert influence, even when they have occupied a high position on the board.

On top of issues involving less women on board, gender diversity is another controversial issue and is often heavily debated in the business environment (Lee & Thong, 2022) . Over the past years, stakeholders have expressed interest in improving gender diversity in the boardroom. Through research, it shows that diverse teams are more likely to embrace new thinking and approaches through combination of skills and experience in which enables them to make better decision for the future of company. Gender diversity is said to be one of the factors to boost the company performance. Gender mix in a team may offer a variety of knowledge and skills. Teams with an equal gender mix have better performance than male-dominated teams as they are more likely to ensure the successfulness of the business, in terms of sales and profits. Higher profitability and sales indicate a successful business since the objective of a company is to maximise the shareholder’s wealth through profit and return in terms of dividend. Besides that, having women on board would enhance the corporate governance of the company since women are more transparent and accountable in their contribution to mitigate any unethical behaviours such as fraud, scandals and others.

Hence, it is crucial not only to organisation but also to society in playing their part encouraging more women to take positions in leadership. Effective supports and encouragement received may motivate more women to step up their positions so that they are able to exert influence on the board. One of the parties that has important roles in improving gender diversity is the 30% Club (30percentclub, 2021). This Club is a group of people led by Chairs and CEO’s who are committed in carrying out campaign to engage with the Public Listed Companies (PLC’s) towards the objective of increasing gender diversity on boards and senior management. This Club also focuses on to collaborate alongside partners such as big companies to raise awareness on giving more opportunities for women to progress in their career as board of directors.

In encouraging more women to take positions in leadership, The 30% Club has asserted that, all parties need to change existing policies and practices to provide more positions opportunities on board for women. Woman should be appointed to the chair position, as it has an important role in board discussions and has the formal responsibilities as a board chair. The 30% Club focuses to activate senior leaders to drive change and support the organisations in their diversity aspirations with specific focus on the gender. Besides that, the Club’s goal is to influence leaders and individual with power to drive change through initiatives such as the State Boards Diversity Initiative, Citizens Assembly on Gender Equality and other interest groups. Lastly, 30% Club desires to enable future women leaders by supporting the talent development pipeline. Talent pipeline is a pool of ready potential candidates that are qualified and prepared to step up and fill the key roles in an organization. This talent pipeline can be achieved through mentoring, executive education scholarships and board-ready initiatives.

On top of that, according to Budget 2022 announced by the Prime Minister of Malaysia, government has also come up with few initiatives to empower women. These include strengthening the female directorship composition in public listed companies by ensuring that at least one female director is appointed starting from September 1, 2022, onwards. The Finance Minister Datuk Seri Tengku Zafrul also mentioned in his Budget 2022 speech that government has allocated RM 5 million to the Woman Leadership Foundation to boost and encourages more women participation in the economics sector. The government also has initiatives to support gender diversity on board through Bursa Malaysia listing requirements. Recently, it has been announced by the said stock exchange that there must be at least one woman on every Board from September onwards. This encourages Public Listed Companies (PLCs) to take action and appoint the most qualified woman on board to meet the listing requirements.

In addition to the above, companies are also required to provide a more inclusive workplace for women to feel safe and comfortable, thus motivates them to sustain in the company and take chances to improve their leadership roles by moving up their positions as leader. Companies should consistently monitor and intervene to address issues on gender bias. This is important especially during the recruitment and evaluation process in the organisation to ensure that both genders get equal opportunities. Companies should also be proactive in developing a woman talent pipeline programme within their organisations to support senior women leaders (Biswas et al., 2021).

Among the strategies to support more board diversity is making diversity a priority by emphasising the importance of diversity and diverse candidates, setting voluntary targets for proportion of women on board and mentoring women to find the most potential candidates that can run the board.

In sum, it is important to support more gender diversity on board since diversity may help the board to come up with a better decision making for the future of the company since they will have a variety of different skills, knowledge and ideas.  The adoption of diversity policies and the promotion of equity and inclusion will lead to better decision-making, reduced major risks, strengthened resilience, and a greater contribution to nation-building. It is essential that the organisation provides strong backing in building an atmosphere that encourages fair access to high-quality jobs and top leadership roles for all individuals, regardless of gender and socioeconomic background. A more balanced representation of women and men on boards of directors is crucial to the success of any company.