We recently concluded a study on gender diversity on boards of regional public-listed companies (PLCs), and were invited to a global event to share our findings.

 

We conducted our research by analysing PLCs that represent 70% of the market capitalisation in each of the five Asean countries, namely Malaysia, Singapore, Indonesia, Thailand and the Philippines, as well as in Hong Kong.

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First, the good news. We found that PLCs with more women directors had better returns on equity (ROE) or stock prices versus their respective market indices. Our study suggested that such women contributed positively, and in various ways, to the performance of a company.

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Now for the not-so-good news. Our study confirmed that the regional corporate scene is still hugely skewed towards male representation on boards; such bias is very pervasive in Malaysia.

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In contrast, the Philippines topped the list of most women on boards, followed by Thailand, Hong Kong and Indonesia. Singapore and Malaysia were rock bottom in this. Specifically, 64% of top Philippine PLCs had women directors, while it was 60% for such companies in Thailand and Hong Kong. Dismally, more than 50% of PLCs here and in Singapore did not have a single woman director when we asked them why, their common chorus was there aren't any suitable women and we're still looking for competent ones.

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When we dug deeper by suggesting to them that having more women on board would break their old boys' club groupthink as such cliques present companies with the risk of collusion they reacted harshly. They said qualified male directors will now have to quit in favour of incompetent women.

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Irked by such bias, we told them that other governments and market regulators who realise how prejudiced they were, have since imposed quotas on male representation to give women the chance to utilise their skills as directors. The men's classic response to that quota system? Quotas should be on whaling and fishing, not women directors.

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Such views belong under a coconut shell. The world's Fortune 500 companies, particularly in Europe and the United States, have all improved their financial performance, ROEs and enjoyed better returns on investments (ROIs), thanks largely to having women directors who insist on accountability, innovation and better work environment for their colleagues.

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The bald truth is this: women directors don't just amble into board meetings and say, So, what's on the agenda today? because they know fully well what is to be discussed, having studied and prepared for the agenda well before the meeting. Let's face it: women simply work much harder than men, and so are seen as a threat. When will PLCs realise that the groupthink of old boys' clubs and yes men need to be junked for good? Look at how many companies went belly up in the 2008 global financial crisis and, more crucially, look at how few women were on the boards of these failures.

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Good companies should be jumping at the chance to hire those who have plenty of common sense, take the trouble to prepare for meetings, are interested in its business, are competent and skilled, hold everyone to high ethical standards and are willing to canvas constructive views. It should be a case of may the best man, or woman, win. Any PLC that has a male-only policy for its board should be suspect because that simply restricts questions how diligent, competent and probing all such directors can be.

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One of Malaysia's leading banks, Malayan Banking, has no woman director; neither do its main mobile phone operators, DiGi, Maxis or Axiata. Surely at least half of their customers are women? Won't their all-male boards affect these customers with their male-oriented decisions? Have Malaysia's male directors shown incontrovertibly that there aren't suitable women to sit at the board table?

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In March 2010, Germany's Deutsche Telekom was the first corporation in the Dax-30 index of the country's largest PLC to announce that it would require a quota of 30% of management positions worldwide to be filled by women by end of 2015.

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This was because it was convinced that women really do increase a company's performance.

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Even if there are hypothetically fewer suitable women for the job at the moment, why not start a programme to mentor promising women? Why doesn't Bursa Malaysia nudge PLCs to do so? I am sure there are thousands of capable Malaysian women waiting to sign up for such a programme. Historically, the traditional controllers of business economy on the East Coast and Negri Sembilan have been women.

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Perhaps we should even start looking beyond the traditional field to, say, lawyers, academics, heads of non-governmental organisations and retired auditors for competent women.

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Indeed, during our study, we had quite a lot of requests, locally and regionally, to establish a pool of would-be women directors.

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Meanwhile, many governments elsewhere have taken bolder steps to put more women on boards. These include:

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Finland, which in 2004 passed a bill requiring state-owned companies to have 40% female representation on boards.

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Switzerland, in 2006, introduced a quota requiring 30% of board directors in state-owned companies to be women, with a five-year transition period.

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Spain, in 2007, passed a law requiring its PLCs with over 250 employees to have a minimum 40% female representatives on their boards by 2015.

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The Netherlands, in 2009, passed a law requiring PLCs with over 250 employees to have 30% female representation on its boards (still pending approval from its senate).

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Iceland, in 2010, imposed a quota of 40% female representation on boards of companies with over 50 employees, by 2013.

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France, in January 2010, approved a new law requiring PLCs to increase the proportion of women on their boards to 40% by 2016 (pending approval by Upper House)

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Of course, time is needed to encourage this necessary mindset change. There is no reason why Malaysia shouldn't take the lead in championing this change. If it did, it would become an exemplary Islamic nation.