M’sian corporate boards lack diversity

The results also show that only five per cent of directors are aged below 40, a significant 95 per cent aged over 40, and most are in their 50s and 60s. Source

January 11, 2020

KUALA LUMPUR: A study has found that Malaysia’s top 100 company boards have significant gender and age gaps, with directors lacking overseas career exposure.

Citing its recent survey which assessed 873 directorships of Malaysia’s largest companies based on market capitalisation on Bursa Malaysia, RHL Ventures Sdn Bhd said the board members are predominantly male, at 73 per cent, while females only comprised 27 per cent.

“The results also show that only five per cent of directors are aged below 40, a significant 95 per cent aged over 40, and most are in their 50s and 60s,” the local private investment firm said in a statement yesterday.

RHL Ventures said the research, titled “Detailed Analysis on Malaysia’s Top 100 Companies Board Composition”, also found that most directors are experienced working in government-linked companies and institutions such as the

Employee Provident Fund, Khazanah Nasional Bhd, Bank Negara Malaysia, Permodalan Nasional Bhd and the Petronas Group of Companies.

“Also, notably, most directors (74 per cent) are currently serving on the boards of at least two companies, while 88 per cent have served in their positions for at least two terms,” it said.

While most directors have experienced working in Malaysia’s top corporates, the company said some 58 per cent do not have overseas exposure in their career progression and around 42 per cent have this as either an employee, a company board director or both.

Nevertheless, it said overseas exposure was found in education as many went to institutions such as Cambridge University and the University of London.

“Another popular destination is Harvard University, with 73 attendees, however most of them enrolled in management programmes instead of Bachelor’s or Master’s degrees.

“It should be noted that the most common educational background for the directors is the University of Malaya, with it accommodating 145 of the 873 directors assessed,” it said.

In terms of ethnic diversity, RHL Ventures said most directors comprised Malays and ethnic Chinese, followed by ethnic Indians and foreigners from countries such as Singapore, Japan and Australia.

However, diversification between Malay and ethnic Chinese is exceptionally equal, accounting for 41 per cent and 42 per cent on board compositions respectively, it added.

Commenting on this, RHL Ventures managing partner Raja Hamzah Abidin said Malaysian company boards remained highly conservative, with many preferring industry captains who have spent much of their career in the nation’s biggest corporates, which could explain the low boards diversification.

“With the dawn of a new decade, this composition should open up to welcome leaders outside the conventional demographic.

“We need to see fresher ideas and perspectives injected into our nation’s top companies,” he said. — Bernama