In a landmark ruling, the state of California passed a law making it compulsory for publicly listed firms with headquarters in the state to have female leaders on their board of directors. The statute requires companies to maintain a certain ratio of women on the board by 2021, or they risk being penalised with fines of at least US$100,000 and up to US$300,000 for multiple violations.
This is a huge step forward for the state and one that reinforces gender equality, albeit through legislation. This statute and the deadline for gender parity in the corporate boardroom highlights another interesting aspect of the whole gender equality issue globally. Without a concerted, collaborative, multi-partite action, from women’s rights groups, professional bodies, trade associations, the private sector and most importantly regulators and the government, this positive movement for change seems like it will not be anything more than passionate rhetoric.
Yes, this is most definitely an issue in our own backyard, especially in Asia. According to a survey done by the National University of Singapore Business School (NUS) and Korn Ferry, the number of women on boards in Asia is lagging in comparison to their Western counterparts. South Korea has the highest percentage of an all-male boards at 84% (2013). All-male boards are also predominant in Singapore, Malaysia and Indonesia. The study found no all-female boards in any of the countries. Although the study showed that there are signs of progress in gender diversity, the region has few women in leadership roles. Only 3% out of the 954 chair positions in the study sample are held by women and only 26 out of 795 CEOs are women. There is still a lot of room for women to be given the opportunity to lead in organisations.
A chart of the number of all-male boards in the region, courtesy of the NUS-Korn Ferry study
The Association of Women for Action and Research (AWARE)’s Nabilah Husna said that their organisation receives quite a number of complaints regarding gender inequality and the like in the workplace. “Women in various fields regularly report experiences of sexist condescension in their professional lives, at every stage from job interview to assignment of tasks and communication in meetings,” Nabilah said. In a study by ValuePenguin last year, the Ministry of Manpower put the median male monthly salary at $3,991 as compared to $3,382 for their female counterparts. This is approximately an 18% difference in salary. What is more worrying is that this difference has remained pretty much unchanged for the past 10 years! The income gap is quite alarming, especially within the same industry.
Not only that, Oxfam has ranked Singapore among the bottom 10 countries globally on tackling inequality, placing Singapore 149 out of the 157 countries that it studied. Although the island nation is one of the most developed countries in Asia, the issue of inequality still persists. It is a great step forward that California has mandated publicly listed companies to appoint women to their board of directors. But why should Singapore or other countries around the region care or attempt to implement a similar law?
We will look at a few reasons why in our next post.