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Rising to the 30% Challenge

August 30, 2017


THE CASE FOR MALAYSIA

An innovative nation is built through a diverse and inclusive society

Optimize talent and


skills to contribute
High-Income
to the nation

Quality
Participate in of Life Serve as a
the economy to catalyst to
benefit from the nurture future
Inclusiveness Sustainability
wealth of the generations
country
Half of Malaysians are female. It
makes sense for them to stay in
the workplace …
… for talent pool to be
build upon

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Female Talent is Key to Promote Economic Growth and
Inclusiveness in Malaysia

Tan Sri Zarinah Anwar Tan Sri Dr Zeti Akhtar Tan Sri Dr Jemilah Tan Sri Datin Paduka Siti
Mahmood Sadiah Sheikh Bakir

Tan Sri Rebecca Aireen Omar Rohana Rozhan Professor Datuk Tan Sri Michelle
Sta Maria Dr. Asma Ismail Yeoh
Women on Boards Led to Better Performance

Source: http://www.mckinsey.com/locations/paris/home/womenmatter/pdfs/Women_matter_oct2007_english.pdf
Diverse Sets of Skills Add Values to Boards

“In a self-reported survey of 9,000 leaders and


managers in US, showed women utilizing the
leadership behaviors of people development,
expectation and rewards, role model, inspiration,
and participative decision-making more often than
men”

McKinsey 2008

“A study of 2,360 companies from 2005 to 2012


showed that companies with one or more women
on their boards have delivered higher returns on
equity, lower gearing, better growth and higher
price-to-book value multiples. Diversity on board
indicated better risk management process.”

Credit Suisse Research Institute

Source: WORLD DEVELOPMENT REPORT 2012, GENDER QUOTAS AND FEMALE LEADERSHIP, Pande, Rohini, and Deanna Ford, 2011
A Closer Look on Malaysia, There are Fewer Female
Representatives at Board Level and Top Management
120%

100%
8.6%
24%
80% 38% 35%
45%

60%

91.4%
40% 76%
62% 65%
55%
20%

0%
Overall Gender *Board Level Top Management Senior & mid Other Levels**
Composition management
Male Female

Source: TalentCorp-PwC Diversity in the Workplace Survey (Sept 2013)


• Board data based on MSWG 2013 Key Corporate Governance Statistics of PLCs in Malaysia
• ** Based on DOS Labour Force Statistics 2013
Malaysia’s Women Labor Force Participation Rate (LFPR) In
Comparison with Other Countries

Male
Female
Malaysia’s FLPR is below the Level Expected Given Its Level of
Development

Female Labor
Force
Participation (%)

Income per Capita

Source: Towards Gender Equality in East Asia and the Pacific, World Bank 2012
Women’s LFPR is double peaked in Japan and Korea … But is single
peaked in Malaysia

Participation rate, percent


80

70

60

50

40

30 Japan (2008)

20 Korea (2007)

Malaysia (2010)
10

0
15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64

Source: ILO Laborsta, CEIC


Married Women
MARRIED WOMENare
ARELess Likely
LESS to Work
LIKELY TO WORK

Labor force participation of women by marital status, percent

100 97.3
91.7
90 88.0
82.4
78.4
80
69.5
70

60 57.1
48.9
50 Male, (age 20-55)
40 Female, (age 20-55)

30

20

10

0
Never married Married Widowed Divorced,
separated

Source: Department of Statistics, Labour Force Survey, 2010


… Housework is the Main Factor for Women Being out of the
Workforce

Reasons for not seeking work

Women Men

Housework 2%
Schooling

27.5% Going for further 17.7%


studies
67.1% Retired 64.4%
Others

Source: Labour Force Survey


Why do Women Leave?

Why Do Women Find it Difficult to Re-enter the Workforce?

➢ 3 out of 4 women cited family commitments


➢ Only 7% of employers have childcare support
➢ Only 30% of employers have Flexible Work Arrangements

Source: TalentCorp-ACCA study, Retailing Women in the Workforce, 2013


MALAYSIA HAS A GENDER DIVERSITY AGENDA IN THE
10TH MALAYSIA PLAN

Tenth Malaysia Plan

Increase women in key


decision making positions
by 2016
30%
Not a Quota … it is a Target

Increase female labour


participation rate by 2016 55%

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Progress is Slow for Having More Women on Boards

WOBs of listed companies

12.00%
* 10.30%
10.00%
8.60%
7.80% 7.90% 7.70% 7.90%
8.00% 7.50%

6.00%

4.00% 542 554 553 544 559 658 735


2.00%

0.00%
2008 2009 2010 2011 2012 2013 Q2 2014

2099 is the year Malaysia will achieve 30% female representation at board level
if no intervention is made (based on past trends)
Based on compound annual growth rate (CAGR) of the past 6 years
Malaysia’s Response on The 30% Challenge, Compared with
Other Countries

Mandatory
Norway Spain France Italy Germany Netherlands
(Legislative)
Gender Target

Finland Denmark Sweden

Regulatory-administered
/ Business-Led US UK Canada Australia New Zealand HK
Gender Target

Malaysia Singapore

No Gender Target
Thailand

Source: Catalyst, Increasing Gender Diversity on Boards, Aug 2014 17


Securities Commission’s Malaysian Code on Corporate
Governance Supports Boardroom Diversity

MCCG launched on 26 April 2017

PRACTICE
Large Companies
• Companies on the FTSE Bursa Malaysia top 100, or
• Companies with market capitalisation of RM2 billion and above
• 4.1 At least 50% board composition comprise Independent Directors
• 4.2 Tenure of Independent Director does not exceed 9 years
• 4.5 The Board discloses in its annual report the company’s policies
on gender diversity, its targets and measures to meet those targets.
• For Large Companies the board must have at least 30% women
directors
GUIDANCE boardroom diversity.
A diverse board can offer greater depth and breadth compared to non-
diverse boards. Director candidates should be sourced from a diverse
pool. In pursuing its gender diversity agenda, each company should
take steps to ensure that women candidates are sought in its
recruitment exercise for board and senior management positions

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DIVERSE COMPANIES ARE MORE ATTRACTIVE TO GLOBAL INVESTORS

Responsible Investment Factors

The Principles for


Responsible
Environmental Social Governance Investment (PRI):
• Climate change • Diversity • Structure • 200 global
• Resource & • Human rights • Employee
relations institutional
energy • Consumer
• Hazardous waste protection • Executive investors
• Sin stocks compensation • USD8 trillion in
• Animal welfare assets

Sustainable shareholder value and growth

• Bursa Malaysia encourages disclosure of ESG factors and is currently working


to create an ESG Index
• Diversity, as part of responsible and sustainable investments, is becoming
increasingly pertinent as the Malaysian market becomes more globalised
THE 30% CLUB – TO INCREASE WOMEN IN DECISION MAKING POSITIONS

What is it?
• A group of business leaders who are
committed to bringing more capable women on
boards because it is good for business
Why does it matter?
• A business-led approach ensures a self- The 30% Club Investor Group,
perpetuating system of development and UK:
selection of the best talent. E.g. the cross • Aberdeen Asset Management
company mentoring initiative • Aviva Investors
• AXA Investment Managers
• Significant number of global investors are • JP Morgan
advocates and/or look for gender diverse • HSBC Bank Pension Trust
boards • Newton Investment, etc
What can you do? The 30% Club US, Investor
Groups:
• By joining as an advocate of the 30% club, you
lend your name and join a global movement to • Berkshire Hathaway
promote gender diverse boards as a • PNC Financial Services
• Barclays
business imperative • Blackrock
• BNY Mellon, etc
EFFECTIVENESS OF A BUSINESS-LED APPROACH IN THE UK

FTSE 100: % women directors


1999-2016

An epiphany over the past 5 years in the UK: now seen as a business issue not a women’s issue

FTSE 100 FTSE 250


▪ 31 companies have already reached 30% ▪ 46 companies have already reached 30%
▪ 31.4% women NEDs – focus now on exec ▪ 25.7% women NEDs – focus now on exec
roles at 9.7% roles at 5.6%
▪ 0 all-male boards ▪ 15 all-male boards, down from 131 in 2010
Sources: Professional Boards Forum BoardWatch. Data provided by BoardEx, June 2016. The Female FTSE Board Report 2016

There is an opportunity for Malaysia to accelerate the rate of growth


significantly learning from the experience in the UK
30% CLUBS WORLDWIDE
The growing global significance of advocating women on boards

30% Club Canada


June 2014 30% Club Ireland
30% Club US May 2014
April 2014
30% Club HK
Mar 2013

30% Club Australia


2015
30% Club
Malaysia,
2015

30% South Africa


Launching 2014

30% Club Malaysia joined a global movement to shift the needle for more
women on boards
30% Club UK Supporters

Ian Davis, Rolls Royce John Heaps, Yorkshire BS


Dame Helen Alexander, UBM, Port of London Authority,
Incisive Media The Earl of Derby, University of Liverpool Andrew Higginson, Wm Morrison
Mark Austen, LV= Asset Management Martin Donnelly CMG, Department for Tony Hobson, formerly Sage
Apurv Bagri, London Business School Business, Innovation & Skills Christine Hodgson, CapGemini
John Barton, Catlin Group/ EasyJet/ Next Ian Dormer, Institute of Directors Stephen Howlett, The University of Greenwich
Sir Brian Bender, London Metal Exchange Andrew Duff, Severn Trent David Hudd, Hogan Lovells
Charles Berry, Drax Group/ Weir Fiona Dunsire, Mercer Dr Franz Humer, Diageo
Sir Charles Dunstone, Dixons Carphone/ TalkTalk Dame Deirdre Hutton, Civil Aviation Authority
Sir Win Bischoff, Financial Reporting Council
Mark Bomer, BDO Ian Durant, Greggs/ Capco Lady Judge, Pension Protection Fund
Sir Leszek Borysiewicz, Cambridge University Robert Elliott, Linklaters Jane Kelly, Brunel University
Ana Botín, Santander Douglas Ferrans, formerly IMA Sir Bob Kerslake, King's College Hospital
Dame Glynis Breakwell, University of Bath Douglas Flint, HSBC Holdings plc NHS Foundation Trust
Donald Brydon, Royal Mail/ Sage Sir Ian Gibson, formerly Wm Morrison Debbie Klein, Engine Group
Robin Buchanan, PageGroup Robert Gillespie, The Boat Race Company Will Lawes, Freshfields Bruckhaus Deringer
Dame Alison Carnwath, Land Securities Richard Gnodde, Goldman Sachs Rich Laxer, GE Capital International
Sir Roger Carr, BAE Systems Karen B. Greenbaum, AESC Sir David Lees, formerly Court of Bank of
Dominic Casserley, Willis / UK Charities Aid John Griffith-Jones, Financial Conduct Authority England
Foundation Sir Gerry Grimstone, Standard Life Paul Leinster, Environment Agency
Stuart Chambers, ARM Holdings/ Rexam Sir Philip Hampton, Royal Bank of Lord Leitch, Bupa
David Childs, formerly Clifford Chance Scotland Paul Lester, Parabis Management
Michael Cole-Fontayn, BNY Mellon EMEA Charlie Mayfield, John Lewis/ UK Greg Lock, Computacenter
Simon Collins, KPMG Commission for Employment and Skills Sir Moir Lockhead, University of Aberdeen
John McFarlane, Barclays/ FirstGroup
Stephen Lovegrove, Department of Energy
Sir Nicholas Montagu, Financial Ombudsman
Service/ Queen Mary University
& Climate Change
Mike McTighe, WYG plc
Garry Coutts, University of the Highlands and Islands Julie Meyer, Ariadne Capital
Sir Nicholas Macpherson, HM Treasury
David Cruickshank, Deloitte Frank Meysman, Thomas Cook Group

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US 30% Club Supporters

Peter Grauer, Founding US Chair and Chairman of Bloomberg


Dominic Barton, McKinsey & Co. Muhtar Kent, Coca Cola
Bob Bechek, Bain & Co Tom King, Barclays
Wayne Berson, BDO Ellen Kullman, DuPont
Michael Blair, Debevoise William P. Lauder, The Estée Lauder Companies, Inc.
Warren Buffett, Berkshire Hathaway Terry J. Lundgren, Macy’s Inc.
Patrick J. Burke, HSBC USA Bob Moritz, PWC
Ursula Burns, Xerox Brian Moynihan, Bank of America
Dominic Casserley, Willis Group Holdings Clarke Murphy, Russell Reynolds Associates
Mike Corbat, Citigroup Sheila Penrose, Jones Lang LaSalle
William S. Demchak, The PNC Financial Services Group Scott Powers, State Street Global Advisors
Richard Edelman, Edelman Punit Renjen, Deloitte
Larry Fink, BlackRock Michael Roth, Interpublic Group
Susan Gilchrist, Brunswick Group Sheryl Sandberg, Facebook
Karen B. Greenbaum, AESC George Scangos, Biogen Idec
David Greenwald, Fried Frank Adam Siegel, Freshfields
Mindy Grossman, HSN, Inc. James C. Smith, Thomson Reuters
Gerald Hassell, BNY Mellon Conrado Tenaglia, Linklaters LLP
Rick Haythornthwaite, Mastercard Kent Thiry, DaVita Healthcare Partners Inc.
Stephen R. Howe, Jr., EY Sandy Thomas, Reed Smith
Kenneth M. Jacobs, Lazard “Tiger” Tyagarajan, Genpact
Nancy Karch, Kate Spade John Veihmeyer, KPMG

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30% CLUB MALAYSIA WAS LAUNCHED ON 8TH MAY 2015
3 Advisory Founding Chairs:
May 2017
• Tan Sri Dato' Megat Zaharuddin, Chairman of Maybank
• Tan Sri Dato’ Seri Dr. Jeffrey Cheah, Chairman of Sunway 2 Co Advisory Chairs
Group • Tan Sri Mohd Sidek
• Tan Sri Zarinah Anwar, Chairman of Malaysian Venture Hassan
Capital Development Council • Datuk Mohaiyani
Shamsuddin
2 Executive Co-Founding Chairs:
• Dato’ Abdul Aziz bin Abu Bakar,CEO MINDA
• Anne Abraham, CEO LeadWomen
GOVERNMENT AS THE CATALYST

Government as the
Catalyst
Trend ofWOB
TARGET: % WOB on Malaysian PLC Boards
Statistics

Overall
12.0% 12.3% 12.6%
10.7%
8.6% 10.2%
7.5% 7.8% 7.9% 7.7% 7.9%

783 802 814


658 669 702
542 554 553 544 559

2008 2009 2010 2 0 11 2012 2013 2014 2015 2016 MAR -1 7 J UN -1 7

16.6% 17.7% 17.9%

13.2% 14.0%
Top 100 PLCs

2014 2015 Dec-16 Mar-17 Jun-17


International
TARGET: Comparison
WOB Statistics
Rising toWOB
TARGET: the 30% Challenge by 2020
Statistics

June 2017
Overall 12.6%
Women,
814 30% = 1,960
+1,158
Total seats = 6,479
Men,
5665

Top 100 17.9%


PLCs Women,
153 30% = 256
+103
Total seats = 855
Men,
702
Building the Talent Pipeline is Crucial to Achieve Target of 30% Women
at Top Decision-Making Positions

Build Enabling & Right skills for 30% women


Foundation flexible career ladder in decision making

1. Policies and Programs:


• Evolving parental leave policies for men and women
• Childcare support system
• Flexible Work Arrangements for Men & Women
• Hiring & Training Women on Career Breaks
2. Formal targets for decision-makers in the private sector legislated
3. Diversity Disclosure, Advocacy & Development Programs
4. Enabling Social and Cultural Norms
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Diversity, including gender, is a strategic business initiative:
the role of women is crucial to achieve our vision

Doing
“Action”

Being
“Character”

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THANK YOU