Over the past few years, the corporate governance landscape in Singapore has evolved progressively, with board diversity being recognised as a critical lever for better decision-making. Mechanisms such as the nine-year rule and voluntary disclosures of diversity targets have encouraged boards to be more deliberate about their board refresh strategies.
In an era of rapid globalisation, socio-political shifts and technological advancement, the importance of diversity in the boardroom cannot be overstated. The recently launched 2025 Board Diversity Index sheds new light on the diversity landscape of Singapore-listed companies.
Developed by WTW in partnership with the Singapore Institute of Directors (SID) and James Cook University Singapore Campus (JCU), in consultation with the Singapore Exchange (SGX) and with support from the Accounting and Corporate Regulatory Authority, the Index provides an updated analysis of board diversity across 553 companies with primary listing on SGX. Spanning Large-Cap, Mid-Cap, Small-Cap, REIT and Business Trusts, and Catalist-listed entities, the index assessed diversity against eight different attributes. These are: gender, age, board tenure, independence, culture, domain knowledge, international experience and industry expertise.
This year’s study shows that considerable progress is made compared to the last one conducted in 2020 by WTW, with notable gains in areas like gender diversity and board independence. It also celebrated 43 listed companies which have exhibited exemplar diversity standards across four or more of the attributes.
However, there is still room for improvement, particularly for related small-cap and Catalist companies, notwithstanding the limitations they face due to smaller board sizes.
In today’s volatile global environment, companies need boards and leadership teams that reflect a broad spectrum of experiences, perspectives and capabilities to navigate complex challenges and seize emerging opportunities. As a global hub with deep international connections, Singapore must continue to embrace diversity as a core tenet of corporate governance to maintain its competitive edge and attract investors seeking sustainable and innovative businesses.
Beyond demographic metrics, boards must cultivate cognitive diversity, the inclusion of diverse thought, perspectives and experiences. One of the limitations of the Index is that it only measures publicly disclosed physical and experiential attributes of diversity. However, other preconditions of cognitive diversity, such as social upbringing, educational background, leadership styles, and decision-making approaches, are equally critical.
A strong culture of inclusion, where different voices are represented and respected, is a strong enabler of cognitive diversity. Boards must create environments where diverse voices are not only heard but also respected and valued.
An inclusive boardroom culture ensures open dialogue and active participation, enabling directors from different backgrounds to contribute effectively. Companies must also integrate women directors into meaningful leadership roles by appointing them to key committees and eventually as Chairs. This ensures their perspectives are not sidelined but actively shape strategic decisions.
While some markets, such as the US, have seen a pullback from diversity, equity and inclusion (DEI) goals amidst shifting political and social dynamics, the imperative for board diversity in Singapore remains strong. Board diversity should not be seen as just a moral obligation nor as a compliance checkbox, it should be viewed as a business necessity.
Companies will do well not to conflate diversity with preferential treatment. Diversity is about cognitive diversity of thought and experience to help better decision-making. To do this, all directors, including women directors, must be appointed on merit and have an equal voice in the boardroom.
There is no prescriptive form of diversity and each board should do the right thing to support their company's objectives. As the business environment grows increasingly complex, the ability to harness diverse perspectives will be critical to long-term success.
As Verna Myers, a renowned diversity advocate, aptly said, “Diversity is being invited to the party; inclusion is being asked to dance.” By fostering both cognitive diversity and an inclusive board culture, Singapore companies can create environments where all directors contribute meaningfully, driving better decisions and sustainable growth.
This article was first published by The Business Times on 25 March 2025.
