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Over the past decade, Bursa Malaysia Berhad ("Bursa Malaysia" or the "Exchange") has encouraged diversity in various forms among its public listed companies ("PLCs") at all organisational levels, and especially within the Board. The Exchange has spearheaded numerous initiatives to champion the diversity agenda – from putting in place regulatory measures, to conducting varied and tailored advocacy programmes.
Bursa Malaysia lauds the efforts of many of its PLCs that have demonstrated positive action on gender diversity in their board composition. This commitment demonstrates an appreciation of the wealth of benefits derived from having a diverse Board - such as improved decision-making, enhanced ability to attract talent, increased resilience, and stronger stakeholder relationships, while contributing to nation building.
Hence, it is unsurprising that the push for more diverse Boards, especially on the gender dimension, is becoming stronger in recent years. For instance, the revised Malaysian Code of Corporate Governance (“MCCG”) 2021 by the Securities Commission Malaysia (“SC”) recommended that all Boards should comprise at least 30% women directors. Similarly, the Institutional Investors Council Malaysia (“IIC”) - comprising large institutional investors such as EPF, PNB, KWAP, Khazanah - in their Malaysian Code for Institutional Investors 2022, clearly laid expectations for investee companies to comprise at least 30% women representation on their boards within three (3) years. The IIC’s stance is in line with the large global institutional investors, such as BlackRock, who have started voting against companies with all-male boards.
As a result of persistent efforts undertaken by various stakeholders, Malaysia has made much progress along the gender diversity front in the past decade. Across the entire population of PLCs listed on Bursa Malaysia, the average percentage of women directors currently stand at approximately 22% as at 1 May 2023. In fact, according to the Gender Equality in Corporate Leadership: Regional Analysis Report by the United Nations Sustainable Stock Exchange Initiative (“UN SSE”) in partnership with the International Finance Corporation (“IFC”) (a member of the World Bank Group) and UN Women in December 2022, Malaysia is one of only four emerging markets where more than 20% of the top 100 PLCs’ board seats are held by women. It is worth noting that the report covered 3,246 PLCs on 35 stock exchanges across 7 regions around the world.
Despite the considerable progress observed over the years, a number of challenges persist in the journey towards achieving the aspirational target of 30% women on Boards. One such challenge is to tackle the phenomenon of some PLCs continuing the practice of having an all-male Board. Thus, to catalyse change, back in January 2022, the Exchange had announced the requirement for PLCs with market capitalisation of RM2 billion as at 31 December 2021, to appoint at least one woman Board member by 1 September 2022. For the remaining PLCs, the requirement must be complied with by 1 June 2023.
"We would like to applaud the majority of PLCs who have already complied to the expectation announced eighteen months ago. It is a significant step in the right direction for corporate Malaysia. However, it is worth noting that several PLCs have yet to conform the requirement; We must quickly address the issue of some PLCs still retaining all-male Boards," said Datuk Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia.
As at 1 June 2023, the following PLCs have yet to appoint at least one woman director, thus failing to comply with the requirement stipulated by the Exchange:
1. BERTAM ALLIANCE BHD
2. BRIGHT PACKAGING INDUSTRY BHD
3. CITAGLOBAL BERHAD
4. DATAPREP HOLDINGS BHD
5. EA HOLDINGS BERHAD
6. FAST ENERGY HOLDINGS BERHAD
7. HCK CAPITAL GROUP BERHAD
8. INCH KENNETH KAJANG RUBBER PLC
9. INNOPRISE PLANTATIONS BERHAD
10. JERASIA CAPITAL BHD
11. LII HEN INDUSTRIES BHD
12. MERCURY INDUSTRIES BHD
13. MIECO CHIPBOARD BHD
14. NOVA MSC BHD
15. PERAK CORPORATION BHD
16. PINEHILL PACIFIC BERHAD
17. RIVERVIEW RUBBER ESTATES BHD
18. SBC CORPORATION BHD
19. SEG INTERNATIONAL BHD
20. SERBA DINAMIK HOLDINGS BERHAD
21. SIN HENG CHAN (MALAYA) BHD
22. VINVEST CAPITAL HOLDINGS BERHAD
23. WIDAD GROUP BERHAD
24. XOX TECHNOLOGY BERHAD
Bursa Malaysia is committed to ensuring good corporate governance and will take appropriate regulatory actions against non-compliant PLCs.
“The Exchange will reinforce the need for Board of Directors to exhibit exemplary standards of responsibility and accountability towards driving corporate performance, while upholding diversity, equity and inclusion principles,” added Datuk Umar.
Promoting diversity across all PLCs has been, and will continue to be a key agenda championed by Bursa Malaysia. This is reflected by the Diversity theme being designated as a Common Sustainability Matter and, therefore, regarded as being material for all PLCs regardless of size or sector in our enhanced Sustainability Reporting Framework. Specifically, starting from financial year ending 31 December 2023, Main Market PLCs are required to effectively manage diversity within their respective organisations - by implementing relevant policies, processes and initiatives to promote diversity – and making corresponding disclosures within their Sustainability Statement or Report. ACE Market PLCs will be subject to these requirements from financial year ending 31 December 2025.
Furthermore, to enhance transparency and accountability, the Exchange is mandating all PLCs to report on the following indicators to show improvements over time:
a. percentage of directors by gender and age group; and
b. percentage of employees by gender and age group, for each employee category.
