A study finds that Malaysia’s corporate boardrooms lack diversity in gender and age representation.
Board members are predominantly male at 73 per cent while females comprised only 27 per cent, reveals the study, titled ‘Detailed Analysis on Malaysia’s Top 100 Companies Board Composition’ by private investment firm RHL Ventures.
The results also show that 95 per cent of directors are aged 40-plus (with most aged in their 50s and 60s), and only 5 per cent of directors are aged below 40.
The research assessed 873 directorships from Malaysia’s largest companies (based on market capitalisation on Bursa Malaysia), whereby examinations were made into their gender and age diversity, education, career and other related experiences.
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Malaysian firms need to restructure their board compositions to enhance their corporate governance, effective monitoring and decision making.
The research also finds that most directors are experienced working in government-linked companies (GLCs) and institutions, such as the Employee Provident Fund, Khazanah Nasional Berhad, Bank Negara Malaysia, Permodalan Nasional Berhad and the Petronas group of companies.
Most directors, at 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.
In terms of ethnic diversity, most directors consist of Malays and ethnic Chinese Malaysians, followed by ethnic Indian Malaysians 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.
While most directors have experienced working in Malaysia’s top corporates, it was observed that many at 58 per cent did not have overseas exposure in their career progression, around 42 per cent have this as either an employee, a company board director or both.
Nevertheless, overseas exposure was found in education as many went to institutions such as Cambridge University and the University of London. Another popular destination was Harvard University, with 73 attendees. However, most of the enrolled in Management Programmes instead of Bachelor’s or Master’s degrees.
It should be noted that the most common educational background for directors is the University of Malaya, with it accommodating 145 of the 873 directors assessed.
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“Malaysian company boards remain highly conservative. Many prefer industry captains who have spent much of their career in the nation’s biggest corporates, which could explain the low board’s diversification,” said Raja Hamzah Abidin, Managing Partner, RHL Ventures.
“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 added.
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