Dr Awang is seen during his opening remarks at the International Directors Summit 2022 held virtually.
KUCHING (Sept 26): About 80 per cent of listed companies have at least one woman director on the board, Securities Commission Malaysia (SC) chairman Datuk Seri Dr Awang Adek Hussin revealed during the International Directors Summit 2022.
According to Dr Awang, the board’s composition is critical to ensure that the company can handle new challenges, stay competitive and meet investors’ expectations.
“Boards need diversity in terms of age, experience, ethnicity and gender,” he said in his keynote address.
“On diversity, the SC has long prioritised better board diversity, especially when it comes to the participation of women on boards.
“Our collective efforts have resulted in progress – in 2011, only 7.7 per cent of board positions were held by women, and more than half of listed companies had all male boards.
“Now, 80 per cent of listed companies have at least one-woman director on the board.
“Improvement was also recorded following the implementation of the mandatory rule requiring a listed company to appoint at least one woman director to its board.”
Having said that, Dr Awang stressed that listed firms should not stop at having one woman director for compliance reasons, but strive towards the 30 per cent critical mass that is required.
The SC continues to monitor the employment of women on boards.
“As of September 1, 2022, 282 women directors were appointed to the boards. This accounts for 34 per cent of all new board appointments in 2022, compared to 17 per cent in 2021.
“Seventy-nine per cent of the newly appointed women were for the position of independent non-executive directors.
“This is an important finding as it addresses concerns that the ‘one-woman on the board’ rule could lead to the board appointment of related individuals, spouses and children, just to meet the quota.”
Dr Awang also reiterated a common pitfall which must be avoided, explaining that there is over reliance on the executives or management to the point where they control the board.
“We must question to what extent is the board knowledgeable enough to constructively challenge management assumptions and proposals.
“Can the board talk to management about topics like cyber threats and transition risks? And lately, on sustainability.
“This is where ICDM comes in to support, among other things, the professional development needs of directors.”
He highlighted that the SC, Bursa Malaysia and ICDM are in the process of developing a new on-boarding programme for directors, focused on sustainability.
This programme is one of the initiatives under the SC’s Corporate Governance Strategic Priorities (2021-2023).
“Its goal is to provide directors with a common baseline understanding of the most important sustainability issues to enable boards to discharge their roles effectively.
“More details will be announced later.”