Launch of “Lead the Change – Women on Boards”
Assalammualaikum Warahmatullahi Wabarakatuh.
A very good morning and Salam 1 Malaysia.
Yang Berhormat Datuk Seri Rohani Abdul Karim;
Minister of Women, Family and Community Development Malaysia,
Yang Berhormat Senator Dato’ Sri Idris Jala;
Minister in the Prime Minister’s Department and CEO, PEMANDU
Ladies and gentlemen,
1. I am delighted to be here today and see so many familiar faces – the corporate captains of Malaysian listed companies and large public companies, senior civil servants as well as the leaders of multinationals and advisory companies – at this launch event for “Lead the Change – Women on Boards”.
2. The Government has always recognised the crucial role played by Malaysian women, both in advancing our national development and nurturing future generations. Our Economic Transformation would simply not be possible without their contributions. And that is why I made upholding the role of women one of the main strategies in last year’s Budget.
3. In the last budget announcement, we allocated 2.3 billion ringgit to the Ministry of Women, Family and Community Development, and we outlined plans to improve access to the job market for all women: from skills-training for housewives and entrepreneurship opportunities for single mothers; to training programmes for high level professionals, and making it easier for child care centres to be set up in the private sector.
4. The government will always strive to support and enable women in the numerous valuable roles they play in our nation.
5. So I am very pleased that we are on course to achieve our goal of a Female Labour Participation Rate of 55% by 2015. In 2009, it was 46%, but by last year it had reached 53.6
%. That translates to around 600,000 women joining the workforce, and an extra 0.3% to GDP growth per year. These are tangible results, and I am confident that at this rate of progress we will meet our 55% target by the end of the year.
Ladies and gentlemen,
6. You were all invited this morning for two particular reasons. Firstly, to reaffirm and reiterate the vision I outlined in 2011 – for 30% of decision-making positions to be held by women by 2016. And secondly, for me to be invited here to launch the Malaysian Chapter of the 30% Club, which aims to achieve better gender balances at all levels of organisations.
7. This shared vision has now become a personal mission for me, as I am acutely aware how close we are to 2016.
8. Malaysia is now on the final lap of our journey to reach high income nation status by 2020. But to help us achieve this goal, it is essential that we harness the talent and energy of women in Malaysia, as equal partners in building a high-income, high productivity economy with the right fundamentals for sustainable growth. After all, close to 63% of students at public universities are women, and these graduates are the talent pool of the future.
9. When I announced the target in 2011, I did not impose a quota, which many countries have done. Norway was the pioneer. In 2004 women made up only 9% of the boards of publicly traded companies. After the Norwegian parliament passed a law stipulating that that figure rise to 40%, the threshold was reached by 2009.
10. We adopted a voluntary approach by encouraging our large public and listed companies to rise to the challenge and increase the diversity of their top management and boards. And we have made significant progress. In the government, women make up 32.5% of the Jusa C Grade and above.
11. Those are very heartening figures, as are those contained in a 2015 study on salaries in Asia by the global recruitment firm Hays. It found that 34% of management positions in Malaysia are held by women. That is 5% higher than last year, and considerably above the average for Asia, which is 29%.
12. In fact, we ranked second only to China. And for the first time, we overtook Hong Kong and Singapore. My congratulations to all these Malaysian women who have risen through the ranks, whether in the public or the private sectors, through merit, tenacity and determination.
13. In the Government, I have been fortunate to work with many women of the highest calibre – such as Datuk Seri Rohani here, who is Minister for Women, Family and Community Development; Tan Sri Zeti Akhtar Aziz of Bank Negara, who is one of the most admired Central Bank governors in the world; and Tan Sri Madinah Mohamad, who, as Secretary General of our Education Ministry is in charge of a central part of the government’s reform agenda and the future of our nation – since the education of our children is key to the development of any country.
14. There are many more very talented women who have made and continue to make enormous contributions to policy shaping and implementation. But if I were to begin to name them all we would be here all day, so I hope you will forgive me not elaborating any further right now.
Ladies and gentlemen,
15. I wish to thank all of you for nurturing and supporting women in your organisations. It is evident that you have recognised their potential, invested in training them and taken steps to retain them, including – and this is very important – when some of them may have taken career breaks, maternity leave, or time off to raise young families.
16. When I set out my vision for women to make up 30% of decision-making positions, we had already reached that target in Jusa C and above grades in the public sector.
17. I wanted to see women make up 30% of C and C-1 positions in all public companies. And according to a survey conducted by Talent Corp and PWC last year, women now make up 24% of top management positions in public listed companies. So this objective is progressing well.
18. I also wanted to see women make up 30% of the boards of all public companies. But on this we are currently behind target. The figure is only 16% at present for public company boards; and for listed boards, the percentage is even smaller, at 10.3%.
19. So I urge the leaders amongst you to do more, to take the next step, to break those glass ceilings and install women on your boards.
Ladies and gentlemen,
20. Our vision is bold and I have indeed set Olympic targets, as my colleague Dato Sri Idris Jala would call them. However, I make no apology for doing so. I fervently believe we can achieve them. And we do not need to look too far to see how this can be done in a short space of time.
21. In 2011, Lord Davies of Abersoch recommended to the British Government that women should make up 25% of the boards of FTSE 100 companies by 2015. At the time, women held only 12.5% of those board positions.
22. Thanks to efforts spearheaded by 30% Club, and with the support of leading companies such as Bloomberg and Goldman Sachs, that figure has now risen to 23.5%. This near doubling of female representation at the highest level was achieved in only 4 years and under a voluntary and business led framework. So imagine, ladies and gentlemen, what we can do here in Malaysia if we are equally determined to implement that same vision.
23. To those sceptics who say they don’t believe in tokenism, let me say this: this is not just a women’s issue. It’s a business issue. Increasing diversity, particularly at top management and board level, is not just a matter of altruism. It makes firm sense in business terms alone.
24. A 2007 study conducted by McKinsey showed there was a high correlation between companies with diverse boards and strong corporate performance. Looking at a total of 89 European listed companies, the study found that those employing women at the highest level outperformed those with no women on boards – gaining 10% greater return on equity, 48% higher operating results and 1.7 times the share price growth.
25. Now, this doesn’t surprise me at all, as diversity brings fresh perspectives, innovative ideas and robustness to board discussions. This is increasingly recognised by investors, who are looking at an array of different factors when deciding where to place their funds nowadays. These include gender balance, and whether businesses are incorporating sustainable and inclusive practices into their models.
26. It was for this reason that Bursa Malaysia launched the Environmental, Social and Governance Index in collaboration with FTSE last December. This ESG Index allows investors, shareholders and clients to examine a company’s value from a new perspective – one that is not purely financial; but which still promises strong financial rewards in the long run, as studies have shown that businesses that are integrating these agendas are benefitting from higher performance.
27. As the global sustainable investment market constitutes an ever-rising share of professionally managed assets – it’s currently more than 30% – it is clear that taking sustainability and inclusivity seriously is part of a virtuous circle. And that most definitely includes having a healthy representation of women on boards. To those companies here who have met our 30 % target – well done! And to those who haven’t – I urge you to take action on this immediately.
28. There are, after all, plenty of very well qualified candidates here in Malaysia. For instance, the NAM Institute for the Empowerment of Women – or NIEW – an agency under the Women’s Ministry, has worked with the Malaysian Directors Academy and LeadWomen to create a special training programme for women. I am pleased to say that over 900 have already graduated and are officially “board ready”.
29. NIEW has set up a Women Directors’ Registry. All you have to do is submit your requirements for a board member, and they will find a suitable match for your firm or business. LeadWomen also has a registry. And if you would like to look still further, please do reach out to my colleagues in the Women’s Ministry and PEMANDU.
30. I would also like to announce that from now on, GLCs will by policy allow their executives to serve on the boards of other listed companies, and I would encourage all listed companies to follow suit in addition to leveraging on the pool of their own serving women executives when appointing new board members. Let all benefit from the wisdom and expertise of our talented female executives.
Ladies and gentlemen,
31. This agenda is close to my heart and I have asked for regular reports on our progress from Bursa, whom I have appointed as Champion for this initiative. In addition, listed companies will in future be required to disclose the composition and diversity of their boards and top management in terms of gender, ethnicity and age.
32. I am sure that these efforts – by Bursa, by the Ministries, our GLCs and the business community – will be greatly aided, encouraged and spurred on by the establishment of the Malaysian Chapter of the 30% Club. Founded in 2010, the club’s aim for 2014 was that women should make up 25% of FTSE 100 boards by the end of the year – and came very close, at 23%, which was a magnificent achievement.
33. Led by the founding chairs, with many CEOs of top FTSE companies among their members, the 30% Club is now established in Britain, Ireland, America, South Africa, and Hong Kong, and just this week launched in Australia.
34. I am proud that Malaysia is part of this exciting global movement, and later today, we will witness the launch of our 30% club with its Founding Chairs, Tan Sri Megat Zaharuddin, Tan Sri Jeffrey Cheah and Tan Sri Zarinah Anwar. May I urge all the leaders of listed and large public companies to join the Club and participate in securing the success of our shared vision.
Ladies and gentlemen,
35. I would like to conclude by expressing my gratitude to Datuk Seri Rohani Abdul Karim and her ministry for their hard work and tireless efforts to get more women in decision making positions. I would also like to thank all the Chairmen and CEOs of listed public companies, MNCs and advisor companies, for taking the time to come here today and show your support for this vital national initiative.
36. Women have made so many strides forward in Malaysia. Let us do all we can to enable them to play their full part in every aspect of our country’s life. For when they succeed, we all succeed.
Wabilahitaufiq Walhidayah Wassalamualaikum Warahmatullahi Wabarakatuh.