THE government has made it mandatory for all public listed companies (PLCs) on Bursa Malaysia to have at least one woman director.

       Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz, in his Budget 2022 presentation, announces that all large-cap companies must have one female director by September 2022, and all other listed companies by January 2023.

       Tengku Zafrul says women’s contribution to society as a whole cannot be denied and must be revered and strengthened.

       There are 947 listed companies on Bursa Malaysia.

       “The participation of women on board stands at 17.2% for all PLCs, with four companies in the top 100 listed companies with no women board members as at end-2020,’’ PwC Malaysia chief strategic operations officer and assurance partner Pauline Ho says.

       The move by the government is commendable and something that the business sector needs.

       It helps address the urgent need for companies to manage their environmental, social and governance (ESG) risks and opportunities, including a new recommendation for boards to comprise 30% women directors, Ho says.

       “There is an urgent need for Malaysian PLCs to address their board gender diversity for a more effective leadership and oversight to drive better business decisions,’’ Ho adds.

       Institute of Corporate Directors Malaysia (ICDM) chief executive officer Michele Kythe Lim says boards with at least one-third women representation correlates with 38% higher median return on equity than boards with no women representation.

       “To ensure resilience and sustainability of businesses, it is crucial for companies to have a balanced board composition.

       “Look beyond traditional competencies such as audit, accounting and finance, governance, regulatory, risk and compliance to include new expertise that will help meet today’s fast-evolving business landscape,’’ Lim says.

       She adds that the skills least present but most needed on boards are digital technology, innovation, sustainability, human resources, communications and public relations as well as marketing and branding.

       Maybank Kim Eng Group CEO and chair of 30% Club Malaysia Ami Moris says diverse and inclusive boards bring about better ideas, effective problem solving and, ultimately, greater chances of success.

       She says with ESG being a measurable benchmark across organisations, diversified, inclusive and strong scoring ESG companies are likely to be more attractive to today’s lenders, investors and consumers, who have become more purpose-driven and sustainability-conscious.

       “We hope this announcement (by the government) encourages the remaining companies to recognise the business value of a diverse boardroom, starting with gender diversity, and compel them to action,’’ Moris says.

       Lim says of ICDM registry of 690 directors, 32% are women. Of this, 11% are first-time women director talents with diverse skill sets such as sustainability, change management and digitalisation.