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KUALA LUMPUR, April 28 -- There is a need to keep the momentum going and in fact accelerate progress in terms of gender diversity on the companies’ board, said the Securities Commission Malaysia (SC).
“We did not meet the target of 30 per cent women on (the companies') board, by end-2020 -- that was the national target set some years back. But we continued this year and based on the statistics that we have, we are quite close with now having 25.3 per cent women on (the companies’) board.
“We are nearing the target, that with greater realisation and adoption of the board renewal process for more capable women can be appointed to the boards and be given the opportunity to serve and make the difference in our corporates,” an SC official told reporters after the Virtual Technical Briefing on the enhanced Malaysian Code on Corporate Governance (MCCG) 2021 today.
Earlier in the briefing report on the updated MCCG 2021, which is effective today, the SC calls for more efforts to achieve the target of having at least 30 per cent of women represented on the companies' board.
“If the composition of women on a board is less than 30 per cent, it should disclose the action it has or will be taking to achieve 30 per cent or more and the timeframe to achieve this.
“A reasonable timeframe is one that is three years or less. The board should also review the participation of women in senior management to ensure there is a healthy talent pipeline,” it said.
The MCCG 2021 also requires the participation of women in decision-making positions should not be focused on board positions alone but should also be broadened to include members of senior management as the same benefits apply.
“Thus, the board should establish gender diversity policies to support the participation of women on the board, as well as senior management.
“The SC’s review of corporate governance disclosures shows that gender diversity policies and disclosures relating thereto remain poor and vague,” it added.
The SC said boilerplate and generic statements are often used to describe the board’s approach on diversity.
“Hence, disclosing aspirational statements such as ‘achieving a culture of inclusivity’, while worthwhile, are unlikely to be effective in improving gender diversity unless they are supported by concrete action numerical targets and a mechanism to track performance against these targets,” it said.
The MCCG was first introduced in 2000 and it was then reviewed and updated in 2007, 2012, 2017 and 2021 to ensure that it remains relevant and is aligned with globally recognised best practices and standards.
The first batch of companies to begin reporting on the adoption of the revised MCCG will be those with the financial year ending Dec 31, 2021.