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Many corporations appoint their own 'buddies’ to the board

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There has been a healthy debate in the Forum pages about the lack of women on corporate boards (“Untapped source of potential female board members” by Ms Elsie Loo, Dec 24; ”Tweak expectations of women at home” by Mr Paul Heng, last Tuesday; and “Look for diversity of talent, not gender” by Mr Kuan Teck Ming, last Saturday).

The causes of the lack of female representation are complex and quotas are probably not the answer.

However, it would be presumptuous to think that the overwhelming dominance of men in boardrooms is a result of meritocracy at work (“Practise meritocracy, not gender equality” by Mr Ho San Cheow; Forum Online, yesterday).

Many corporate boards rely on the personal networks of incumbent directors, founders, major shareholders and intermediaries like investment bankers to identify candidates, and have rather informal and ad hoc processes for determining the requisite skills, experience and knowledge of director candidates.

The result is that directors who are invited to join boards may not add value to the board and company, and there is a resultant lack of diversity of perspectives in the boardroom.

The fact that only about 8 per cent of directorships of listed companies are held by women is at least partly due to the lack of a truly meritocratic process for recruiting directors on many boards – and not because there are so few women who are good enough.

If this state of affairs continues, it can only harm the long-term competitiveness of our companies and our economy.
 

Mak Yuen Teen
(Associate Professor)
NUS Business School
National University of Singapore

* Letter first appeared in ST Forum (7 Jan)

 

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