Greater Efforts Needed To Improve Diversity In Top Management Of Listed Companies – Najib

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KUALA LUMPUR, April 9 – Prime Minister Datuk Seri Najib Tun Razak said greater efforts are needed to improve inclusiveness and diversity in top management of listed companies. He said based on a recent survey of listed companies by TalentCorp, the overall diversity was commendable on gender, age and ethnicity fronts, with 38 per cent representation of women, 67 per cent aged 40 years old and below and an ethnic composition mirroring the national population with 66 per cent of the workforce being Bumiputera. However, the survey, released Wednesday, suggested the need for greater efforts to improve diversity at the top management, with a representation of only 24 per cent women, 18 per cent aged 40 years and below and only 34 per cent Bumiputera.

“We are progressing well on our journey towards becoming a developed nation by 2020. As set out in the New Economic Model, we must not achieve our objective of high income at the expense of inclusiveness and sustainablity,” he said at the Sustainability & Diversity roundtable session in the capital, Wednesday. Najib urged more Malaysian listed companies to produce sustainability reports that include disclosures on composition of workforce, in line with international best practices on reporting. Currently, listed companies are required to disclose in their annual report the gender diversity policies, particularly in the context of board selection. “Going forward we will broaden the scope for listed companies to establish and disclose their diversity policies, covering gender, ethnicity and age for board and management,” he sdaid.

Najib said leading Malaysian organisations showing leadership in sustainability and inclusiveness would be acknowledged and rewarded by financial markets and investors. Globally, companies that have done so have been able to attract and retain investment from a wider range of sources. “Around the world, sovereign wealth and pension funds have spearheaded the sustainability agenda by choosing more and more to invest in sustainable companies and instruments as these investments not only expand the diversity but also provide financial as well as social returns,” Najib said. Najib added that the RM1 billion allocated for Valuecap for sustainable and responsible investing in Budget 2014 and in due course, other government-related funds, would emulate in terms of providing a greater focus on sustainability for investments.

On female participation, Najib said Malaysia has made good progress with Female Labour Participation Rate (FLPR) increasing to 52.4 per cent in 2013 from 49.5 per cent in 2012. “This puts us very much on track to achieve the target of 55 per cent by 2015,” he said. The prime minister added that based on data in 2013, only 8.0 per cent of board members of all listed companies are women, against our target of 30 per cent by 2016. Despite more than 700 women having been trained under NAM Institute for the Empowerment of Women Malaysia (NIEW) Women Directors Programme in 2012 and 2013, to date only 115 placements in listed companies have been made.

However, to date 33 per cent of top positions in the government are represented by women, exceeding the policy target of 30 per cent. When I first took office five years ago, women made up only 18 per cent of the top posts in the civil service,” Najib said. “In order to sustainably attract, develop and retain the talent pipeline, we need to be increasingly inclusive in the sharing of the economic pie and success. “Currently, wages as a percentage of GDP (gross domestic product) stands at 32.9 per cent and this is considerably lower than the levels of developed nations, which we aspire to become,” he said. Najib said in the Malaysian context, inclusiveness also involved ensuring diversity of workforce and diversity is the country’s source of strength and market differentiator. “We champion inclusiveness not just because it is a foundation for political stability and economic growth, but because it is right,” he said.

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