Skip to Main Content

Inching Forward on Gender Diversity

Trends in Singapore corporate governance

The 2018 Singapore Spencer Stuart Board Index is a review of governance practices among the 30 constituent companies of the FTSE Straits Times Index (STI). It also offers a useful comparison against similar board index reports from other countries. Key findings from this third edition of the report are summarised below.

Key findings

  • More women on boards

    The representation of women on the boards of the top 30 Singapore firms with the largest market capitalisation has been on a modest upward trend since 2014, increasing from 8 per cent in 2014 to 12 per cent in 2018. However, only 67 per cent of STI30 boards have at least one woman director, compared to 73 per cent in 2016.

  • Average age of directors flatlines

    The average age of STI30 directors has remained about 62 years old since 2014, and a large proportion of the board members are between 56 and 75 years old.

  • Dip in proportion of independent directors

    On average, 57 per cent of directors on the boards of the STI30 are independent, down from 63 per cent in 2016 and 65 per cent in 2014.

  • Independent director tenure below 9 years

    The average tenure among independent directors of the STI30 is 5.9 years, with about a third of independent directors serving less than three years. The average tenure of nonexecutive directors of STI30 companies is 7.3 years. Seventy-six per cent of non-executive directors have a tenure of 10 years or less, compared with 81 per cent in 2016.

  • Upward trend in board retainer fees

    Board retainer fees for chairs and members across board and board committees (audit, remuneration and nominating) have been rising steadily since 2014. Directors on remuneration committees showed the greatest percentage increase (11 per cent) from 2016 to 2018.

  • Most boards perform some form of annual assessment

    A substantial majority, 90 per cent of the STI30 companies had some form of board assessment, whether executed internally by their nominating committee or an external facilitator. Interestingly, 20 per cent of STI30 companies engaged a third party to carry out their board assessment, compared to 33 per cent in 2016.

Improving board effectiveness

Many of the changes stipulated in the revised Code of Corporate Governance issued in August 2018 will require companies to not only evolve, but revolutionise their current practices. Board diversity and director independence remain critical agenda items, and the new Code aims to enable companies to make continued progress.

A table highlighting select indicators of board composition, board performance and director remuneration for the 30 companies can be viewed in the PDF.

This article was originally published in the 2019 Q1 issue of the SID Directors’ Bulletin, a publication of the Singapore Institute of Directors.

About the author
  • Malini Vaidya
    Malini Vaidya leads Spencer Stuart’s business in Asia Pacific as the region manager. Malini focuses on board and CEO succession across the region.