For over a century, ACCA has been shaped and led by many pioneering women and we owe them a great deal.
Our chief executive, Helen Brand in the UK, and our past president, Jenny Gu in mainland China, serve as inspirations for us to be strong advocates of women’s representation and inclusiveness as business leaders and on company boards.
Speaking as a panelist on a recent webinar on board diversity in Asia Pacific, co-hosted by FutureBoards and the Royal Norwegian Embassy, Leong Soo Yee, ACCA’s executive director, markets, said:
‘It has always been part of our mission to encourage women to overcome systematic barriers, to recognise how important wellbeing and resilience are in relation to success and in leading with much-needed empathy and compassion, particularly in today’s tumultuous world.’
The panel agreed that the business case for demonstrating how women executives can improve results, provide different perspectives and better connect with a more diverse customer base and workforce was already evident well before Covid-19 struck.
More companies – most recently in the financial services industry – are realising how gender diversity can drive innovation and increase productivity. In September, Citigroup appointed Jane Fraser as its new CEO, making her the first female head of a large Wall Street bank. As Bloomberg reported, ‘Citigroup has finally taken a hammer to one of the most glaring glass ceilings in the finance world.’
Recent statistics show that even though progress is being made, there is still a long way to go.
Improving gender equity at the top is likely to alter perceptions throughout the company and ultimately result in more women being considered for leadership appointments all the way up to the board
The latest data from Singapore’s Council for Board Diversity reveals that the 100 largest primary-listed companies on the Singapore Exchange (SGX) achieved 16.2% of women’s participation on boards last year, short of their goal of 20% by 2020. Of the 81 boards with female representation, 40% still just have one woman member.
While this is a significant improvement from 2013, when half of these boards were all-male, it is also disappointing to see that 19 have no women at all. This is out of step with other parts of the world, particularly in the European Union.
Throughout 2020, we have seen how women presidents and prime ministers managed and controlled the pandemic effectively. We have also seen examples of dynamic female entrepreneurs and executives, not least in Asia, proactively looking after their people and collaborating with other stakeholders to help protect communities and local economies.
Dr Ayesha Khanna, CEO at ADDO AI, is an example. Throughout the pandemic, she has reached out to young women in South-East Asia via social media to encourage them to see the benefits that new technologies provide for their careers, society and the environment. Nishita Shah, owner and director of Precious Shipping, one of Thailand’s large dry-bulk shipping companies, is another advocate of women’s representation and pay equality in the region.
Although we see many exemplary women helping businesses survive and thrive – and despite initiatives such as the 30% Club – they still are the minority on the boards of some of the largest and most influential companies in the world.
Covid-19 has given these companies a unique opportunity to address gender diversity and equality. As they rethink their business strategy and purpose, company boards need to prioritise diversity and inclusion (D&I) goals and explore ways to accelerate the process.
Look beyond quotas
They should start by looking beyond quotas, targets and tick-boxing, and rethink how they define leadership. Company directors can lead the way in reversing the many conscious and unconscious biases that cause gender underrepresentation.
There are several initiatives companies can adopt to help make this happen. First, boards need to instill a culture that provides women with the same paths that men have toward CEO and board-level appointments. This means widening their lenses and reassessing the criteria traditionally applied to leadership roles.
In fact, this could prove valuable on many levels as companies embark on building for a more resilient and sustainable future.
Boards should look harder at the traditional assumptions embedded around leadership skills and backgrounds, and update them with a broader set of more relevant metrics. For example, more diverse expertise in climate change and sustainable finance, health and safety, digitalisation, and important cognitive skills such as timely decision-making and effective communications.
Companies should also look across sectors and geographic regions according to where their customer base and supply lines lie. Investors and other shareholders increasingly require information about companies’ D&I programmes and the composition of their board obviously serves as a first impression.
Covid-19 has accelerated investors’ focus on environmental, social and governance best practices, and D&I is a major part of this. Shareholder engagement is proving to be crucial to companies’ progress; helping to enhance policies on equal pay and overall culture setting, for example.
This year, more investors have expanded their gender diversity voting policy to help reduce inequality. AXA Investment Management, for example, recently announced that it will become more active in encouraging gender diversity on boards, including using its voting power as a tool.
Investors are not the only stakeholders increasing their expectations on gender parity. In 2010, the Australian Stock Exchange’s Governance Council introduced policies to disclose diversity policy; gender diversity objectives and progress; board selection processes; and the proportion of women in senior executive positions and on the board. According to the Australian Institute of Company Directors, female directors accounted for less than 9% of directors of Australian ASX 200 companies in 2009, reaching 32.1% in 2019 – one of the fastest rates of progress in the world.
But what’s most notable about this approach is that it has forced change without quotas – in fact, without any mandatory legislation. Australia’s diversity policies operate on a comply-or-explain basis, meaning that companies must either comply with the prescribed policies or explain their failure to do so. Other countries, including Vietnam, are looking at this approach to improve corporate diversity.
% of director seats held by women in MSCI ACWI (All Country World Index) constituent companies in Asia-Pacific
Create a pipeline
Likewise, more needs to be done at the board level to foster a pipeline of senior female leaders. Boards should get employees actively involved in gender D&I efforts by serving as mentors and sponsors, and ensure that such programmes encourage the involvement of women and men already in key roles.
This will lead to a strong chain effect: improving gender equity at the top is likely to alter perceptions throughout the company and ultimately result in more women being considered for leadership appointments all the way up to the board. Creating a feeling of diversity and inclusiveness companywide will help move women to the top more holistically and show stakeholders and shareholders alike how much the company values women’s contributions.
We are seeing the creation of more chief diversity officers in larger companies – not only due to the social upheaval caused by Covid-19 and the Black Lives Matter movement, but also in response to pressure from pensions and other investors who want to see better representation.
Having a focused initiative from the top that tracks and measures performance sends a powerful message to a business’s ecosystem: customers, staff, investors, lenders and suppliers.