Women In Leadership Positions: Where Is Malaysia At?

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6th Oct 2017

9 min read

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[Updated: Oct 5, 2017]

FACT: Glass half empty—Women are far from being equal to men in the corporate sector.

BACK in 2011, the Malaysian government announced a target for the corporate sector to push for women to represent 30% of decision-making positions by the end of 2016.

Yet, as of June 2016, women accounted for only 15.2% of director positions in the top 100 listed companies on Bursa Malaysia (Kuala Lumpur Stock Exchange).

Furthermore, there persists a gender pay gap between men and women based on average incomes earned, according to the Department of Statistics 2015 Salaries and Wages report.
Malaysia, however, is not alone.

It is a global reality – even in developed countries like the United States, Canada and Australia, where women account for just over 20% of board positions in listed companies and women in employment earn just under 20% less than their male counterparts.

 

FACT: Glass half full—Malaysia has made strong progress in women inclusion.

The future of a more equal representation of women in leadership positions however does look increasingly promising in Malaysia, especially given recent progress in strengthening the pipeline of women’s talent.

In terms of university enrolment in Malaysia, in the 1980s, men outnumbered women by more than a quarter. Today, that ratio has inverted, with more than 25% enrolment for women compared with men.

The strong pipeline of women graduates is already beginning to reflect itself in the workforce. While overall gender ratio of the Malaysian labour force is at 60:40 in terms of men:women, at the executive level, it’s almost 50:50 between women and men in the workforce – at least in listed companies.

There has been significant progress in the representation of women in the workforce. See Figure 1.

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Prior to 2010, the Female Labour Force Participation Rate (FLPR) wallowed at around 46% for many years. What this FLPR means is that for every 100 women of working age, only about 46 were working, including both full-time and part-time employment.

Since 2010, FLPR has steadily risen from 46.8% in 2010 to 54.1% in 2015, which translates to an additional 750,000 women in Malaysia’s workforce, which is estimated to contribute an additional 0.3% gross domestic product growth to our economy.

Businesswoman with a winning trophy, smiling and cheering

Progress in getting more women into work has been attributed to a number of factors including better education (women with higher education are statistically more likely to work), more service sector jobs (seen to be more women-friendly than manufacturing or construction), rise of micro enterprises and flexible work arrangements.

Beyond overall workforce representation, we are also seeing more women in leadership roles. See Figure 2.

2

While women are significantly underrepresented in the boardroom and as chief executive officers (CEOs), there are increasingly more women in top management.
Based on the 2015 Bursa annual returns, women accounted for 26.3% of top management across all listed companies.

This is progress from the low 20s estimated in previous surveys and bodes well towards achieving the corporate sector’s 30% target.

But can we sustain this momentum of advancing the agenda of women at work and in leadership?

 

FACT: Advancing women at work and in leadership is a business imperative.

It has unfairly been a 'boys' club' at the board level for far too long, yes, but this shouldn't be looked at as purely a women's rights issue.

There is a risk that progress of women in leadership will stall if this agenda is represented purely as a women’s rights issue. This is where some who champion advancing the women’s agenda are potentially undermining it, especially if they are framing it as an “us vs. them” scenario.

Yes, it has been quite unfairly a “boy’s club,” especially at the boardroom level for far too long. However, it shouldn’t then be about righting this wrong by then wanting to have an-all women board either.

The importance of advancing women at work and in leadership is that it is good for everyone (both men and women). Malaysia will not emerge a high-income nation if we do not optimise half the population, especially when the fairer sex is emerging as the more educated cohort.

Developed countries typically have FLPR exceeding 60%. Hence, we certainly have a gap to close in terms of our country’s potential economic growth.

Further, it is also about leveraging on diversity as a source of strength. Various studies point to greater diversity in companies leading to better financial performance and risk management.

Analysing companies in the United States, Canada and the United Kingdom, McKinsey in its Diversity Matters 2015 report found that gender-diverse companies were 15% more likely to outperform, and ethnically-diverse companies were 35% more likely to outperform.

In contrast, in Malaysia, the 2015 PwC-TalentCorp Diversity survey found that about one-fifth of listed companies had no women in top management and one quarter of listed companies had no ethnic diversity in top management.

Clearly, Malaysia is not yet fully leveraging on the strength of its natural diversity. Especially as Malaysia shifts from resource-based and lower-end manufacturing to higher value-added services, it becomes more critical for us to embrace diversity as different perspectives spur creativity and innovation.

Diversity in corporate Malaysia is therefore about forging a truly 1Malaysia partnership to enhance the nation’s competitiveness. Hence, promoting gender (and ethnic) diversity should be seen as a business and economic imperative.

 

FACT: The more the better. . .

If diversity is so good, why doesn’t it happen more naturally?

Truth is, it often feels more natural to not be diverse. All of us have a natural affinity towards our own kind, socially and professionally.

Diversity is potentially a double-edged sword – it provides us with different ideas and perspectives, which if well-managed, drives creativity and innovation, but if badly managed, leads to unproductive conflict.

But if we don’t embrace diversity, we will not achieve our full potential. So, how do we drive greater progress on inclusiveness in Malaysia?

Potentially contentious but in our point of view, quotas don’t work. Attempting to force diversity, will lead to tokenism and compliance in form. Without embracing a mindset for inclusivity, the full benefits of diversity will not be realised.

So if it cannot be forced, what’s the alternative?

We will just need to persevere with the current approach of advocacy and moral suasion, backed by facts, and to continue raising awareness and ensuring that the issue remains at the top of the corporate sector’s agenda.

P06-07_2008_While the Malaysian corporate sector has yet to meet its target of ensuring women take up 30% of decision-making positions, there is a growth of women in leadership roles.

 

What has the government done?

Having the Prime Minister announce formal national policy targets for FLPR and women in leadership in 2010 and 2011, respectively, has helped to elevate the agenda. While not a quota, targets require measurement and what doesn’t get measured, typically doesn’t get done.

The policy announcement has then been followed up by regular engagement with corporate Malaysia. In particular, for women in leadership, the Securities Commission has formalised the target into the Malaysian Code of Corporate Governance, emphasising the importance of board diversity to strengthen governance and management of companies.

Bursa Malaysia has followed up, in 2015, by requiring listed companies to disclose their diversity policy covering management and employees, in addition to collating data on board and top management diversity through annual returns.

 

What can businesses do?

Awareness of the facts is important as it allows companies to benchmark themselves against their peers. For example, oil and gas companies can’t use the excuse that it is a male-dominated industry for their lack of diversity when Petronas-listed entities have led the way with between 20% and 25% women on their board.

Peer engagement (or peer pressure) does help, as shown by the experience of the 30% club in the United Kingdom, where women on boards have increased from 12.5% in 2010 to 26% currently.

Much of UK’s progress was achieved by having prominent chairmen (generally men) championing for diversity to their peers, combined with some pressure whereby the 30% club would make mention of companies with no women on board in the newspapers. Hopefully, the Malaysian chapter of the 30% club, which was launched in May 2015, will enjoy similar success.

For starters, progress is needed in the 20 listed companies in Bursa’s top 100 such as IOI Group, Fraser & Neave Holdings Bhd and Boustead Holdings Bhd, as they have no women on their board.

The excuse that there are no qualified women rings hollow, especially with NIEW and MINDA’s efforts to build up a database and registry of qualified women for boards.

To progress, potential women directors will need corporate leaders as sponsors to vouch for them, when opportunities arise. CEOs in particular should recommend their top women executives for potential board positions.

A good example is how a senior CIMB executive sits on the Maxis board, helping not just gender but also age diversity (given many boards are dominated by retirees).

To ensure we have women rising to leadership roles, we must first attract and retain them in the corporate ladder. Based on the Department of Statistics Labour Force Survey, there is a marked reduction in FLPR related to age, that is, while many women join the workforce in their early 20s, they subsequently drop off beginning their late 20s and early 30s.

To address this, TalentCorp has embarked on advocacy of flexible work arrangements (FWA), providing corporates with best practice and support to implement FWA. TalentCorp’s experience has been that many companies are interested in FWA but assume implementation to be difficult and complicated. In actual fact, it isn’t.

The flexworklife.my portal shares how a broad range of companies, like Maybank, Sunway, Gamuda and Shell have gotten FWA to work and reaped positive business results.

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FACT to follow FICTION?

The aforementioned advocacy has been very much targeted at business leaders and employers, engaging relatively progressive companies to further progress the agenda of women at work and in leadership.However, to tackle and change mindsets, it is never too early to shape views on the role of women.

There is something to be said about stereotypes reinforcing status quo. We generally grow up in an environment where leaders are overwhelmingly males. At least, when we grew up, young boys were given Lego to play with and young girls given Barbie dolls.

Boys were encouraged to learn Mathematics and Science, do courses like engineering whereas parents (often unconscious of their bias) would steer their daughters to more artistic courses like Economics and Accounting. To add to it all, in stories, it is always the man who plays the hero and the ladies as the damsels in distress.P06-07_2008_SIDEBAR_MAIN IMAGE_1 of 2

In recent times however, Hollywood has evolved in its depiction of gender role. Disney, for example, was famous originally for classics like Snow White, Sleeping Beauty, etc. where it was always Prince Charming or a knight in shining armour who comes to rescue the damsel in distress.

Of late, it has become more common to depict strong female heroines, such as Mulan, Princess Merida in Brave and of course, Anna from Frozen.

Science fiction as a genre has been among the most progressive – hopefully depicting a future of greater equality and inclusiveness. The Star Trek series in particular has evolved to show the changing values (at least in the United States).

The original instalment of Star Trek had a very macho, shoot-first-ask-questions-later Captain Kirk, where the token minority lady on his bridge was the Head of Communications – very much a reflection of traditional stereotypical roles.

In Star Trek: the Next Generation, there was still a male captain albeit a more thoughtful one with Captain Picard, and a crew that included a female counselor and also the chief medical officer.

Ultimately, in Star Trek: Voyager, we then have a female captain in addition to having female characters as head of Engineering and also of Astrometrics (science), signalling a shift towards having female role models for leadership and technical-related functions.

Especially noteworthy in recasting female stereotypes has been science fiction films, Edge of Tomorrow and Star Wars: The Force Awakens.

What is striking about these two films is the gender roles cast of the partnership between the male and female leads. In Edge of Tomorrow, Tom Cruise plays major William Cage, a public affairs officer with no combat experience, whom at the beginning of the movie is trying to avoid the frontline of war.

In contrast, Emily Blunt plays sergeant Rita Vrataski, a celebrated war hero, who, over the course of the movie, helps to train Tom Cruise’s character to be a better soldier. Further, in one scene when faced with the prospect of certain death, it is major Cage that hesitates, whereas sergeant Rita insists on going ahead into battle. Ultimately, both major Cage and sergeant Rita forge a great partnership to overcome the odds.P06-07_2008_SIDEBAR_SMALL IMAGE

Similarly, in Star Wars: The Force Awakens, the male lead played by John Boyega is effectively a deserter trying to run away from battle. It is the courage and sincerity of the female lead, played by Daisy Ridley, which eventually prevails and rallies John Boyega’s character and others to take on a seemingly unwinnable battle.

Trust that through entertainment and fiction, the mindsets of many, including of younger ones, will be influenced to see diversity and inclusion, a partnership between genders as a norm.

Especially with the challenges faced by Malaysia, we certainly need a partnership of like-minded “heroes,” of both genders and all races.

In addition to the ongoing corporate advocacy, we hope that we will soon see local stories, like Drama Minggu Ini, recasting their gender roles to reflect such a winning partnership.

 

Shareen and Johan are TalentCorp’s current CEO and past CEO respectively. They very much believe that a strong partnership through gender and ethnic diversity is best for Malaysia and thus, hope our employers will be progressive, particularly in embracing inclusiveness and flexible work arrangements. If you have any burning questions for them about this topic, don’t hesitate to drop us an e-mail at editor@leaderonomics.com. For more Consulting Corner articles, click here.

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