Singapore tops Asia in proportion of women CEOs: Report

Channel NewsAsia, 25 Sep 2014

Singapore tops Asia in terms of the proportion of women in CEO positions and places third globally. But female representation at the board level here remains low at 7.9 per cent, according to a new report by the Credit Suisse Research Institute.

The CS Gender 3000: Women in Senior Management report, released on Thursday (Sep 25) revealed that women held 15 per cent of CEO positions in Singapore, which is the highest among Asian markets in the study, and third highest in the world after Portugal and Belgium.

The report stated that gender diversity in senior management positions - CEOs and directors reporting to the CEO - in Singapore was 25.1 per cent in 2013, higher than the global average of 12.9 per cent.

However, among the Singapore companies surveyed, the overall percentage of women on boards dropped slightly from 8.6 per cent in 2012 to 7.9 per cent in 2013, which was also the level of female board participation in 2010. The global average was 12.9 per cent in 2013.

In fact, the Singapore findings in this area have contributed to the report's revised stance about gender diversity at the board level. Globally, Singapore has the second highest gap between female participation at the board level, and female participation in top management positions (17.2 percentage points).

"This finding relates to one of the study’s conclusions that quotas and targets for board level participation may not necessarily improve female participation in senior management more broadly", the report stated.

GENDER DIVERSITY AND COMPANY PERFORMANCE

But in terms of whether gender diversity at the board level correlated with a firm's financial performance, the report held to its previous position. “It has been two years since we published the Gender Diversity and Corporate Performance report and there has been a lot of evidence to corroborate our original findings of the striking correlation between diversity at the board level and improved corporate financial performance,” said Stefano Natella, Credit Suisse's Global Head of Equity Research.

Since 2012, companies with at least one woman on the board have outperformed by 5 per cent. A longer-trend analysis showed a compound annual excess return of 3.7 per cent since 2005.

The report also found that since 2005, companies with at least one woman on the board of directors have seen an average payout ratio of 39 per cent, as opposed to 32 per cent at companies with no female directors.

For companies with more than 15 per cent of women in top management, the 2013 payout ratio stood at 43 per cent. In contrast, companies with less than 10 per cent female participation in top management saw a 36 per cent payout.

Compared to previous findings, the report also found "less convincing evidence" that women run more conservative business models. It stated that companies with less than 10 per cent of women in top management showed a net debt to equity ratio of 35 per cent at the end of 2013, while companies with more than 15 per cent of women in top management showed a net debt to equity ratio of 57 per cent.

The analysis also looked at the obstacles women face at mid-management levels, and suggested various policy initiatives that could lead to progress. These include legislative support, education in how STEM (science, technology, engineering and mathematics) subjects are taught as well as regulation for diversity in companies.

“The CS 3000 gives compelling evidence that gender diversity on boards and in senior management is strongly linked to higher ROE, better shareholder returns, and stronger valuations. And we show that gender diversity is improving, but still woefully low in many companies. The challenge is now to accelerate this change, and extend it to broader areas of cultural diversity,” said Giles Keating, Deputy Global CIO of Private Banking and Wealth Management for Credit Suisse.

The CS Gender 3000: Women in Senior Management from Credit Suisse