Gender diversity in the Malaysian workplace is improving. Does Najib deserve the credit?
By Oliver Ward
At the end of July, Malaysian Prime Minister Najib Razak positioned himself as a women’s rights champion in Malaysia. He announced that as of January 2018, public listed companies would be publicly named and shamed if they had no women on the board.
“Unfortunately, we still have 17 ‘Top 100’ public listed companies that have no women at all on their board.” He added, “This is just not good enough and I call on these companies to immediately address this lack of diversity.”
He also suggested that he may withhold government contracts from companies without female board members. His 2020 target is for females to make up at least 30% of the boards in all publicly listed companies.
Malaysia is making progress in female labour inclusion
Najib cited the country’s progress in bringing more women into the labour pool. Under his direction, more than 700,000 more women have entered the workforce. The female labour participation rate is also increasing annually. In 2016, 54.3% of women worked in either full-time or part-time employment.
Source: Leaderonomics, Department of Statistics
This increase in female participation has added around 0.3% to Malaysia’s GDP since 2009. It is not just female labour participation that is on the up; there are also more women in decision-making roles.
Source: Leaderonomics, TSD
Women make up just under 14% of board members in Malaysia, a higher percentage than many of their regional neighbours.
Source: Deloitte
While there are signs of progress, it may be premature to brand Najib a supporter of women’s rights.
Najib is a wolf in sheep’s clothing
These indicators of progress for women in the workplace are encouraging, but Najib himself has not exactly been a pioneer for gender equality since he came to power. In 2012, he dismissed calls for reform from women’s rights groups, stating gender equality had been present “from the start”. He added that women were excelling in the workplace “to the extent that men are said to be an endangered species”.
Even today, men make up 86% of board members and 71.6% of decision-making positions, neither of which suggests they are “an endangered species”. At the time of the comments, Malaysia ranked 95th out of 135 countries in the World Economic Forum’s Global Gender Gap Index. It has since dropped to 106th.
Its drop in the Global Gender Gap Index is largely due to limited female political empowerment. If Najib is serious about increasing gender diversity and female representation in positions of power, he should set the example. His cabinet has just three female ministers. This appallingly low figure indicates that Najib governs with a cabinet whereby only 10% are women, far less than the 30% target he has set for publicly listed company boardrooms.
Even on government councils to empower women, Najib is reluctant to appoint females in leadership roles. He recently made himself the chairman of the MyWIN Academy Advisory Council, an organisation designed to empower women and promote women in leadership positions.
Will a policy of naming and shaming help gender equality?
Framing the problem of gender diversity in the form of quotas and targets could do more harm than good. Women in the upper echelons of companies should not be there because they have to be, but because they help the business.
In 2015, McKinsey reported that gender-diverse companies perform 15% better than their counterparts. As Malaysia seeks to shift to a higher value economy, the government would do better to highlight the economic benefits of a diverse board, not publicly shame companies into compliance.
DAP (Democratic Action Party) member of the Penang City Council, Syerleena Abdul Rashid said, “there might be little motivation to continue nurturing gender parity in a natural manner.” She added, “When this happens, you breed a system in which society may unconsciously imprint the notion that women cannot succeed on their own”.
Zuraida Kamaruddin, Ampang MP, also fears that the policy will generate animosity for women in boardrooms rather than encourage competition and mutual respect.
Businesses themselves are pushing for gender equality in a healthier way than the government
The 30% Club is a private sector initiative determined to bring more women onto the boards of publicly listed companies. Unlike the government initiative, the 30% Club seeks to inspire debate and promote the benefits of gender diversity.
Since 2015, the group has received the backing of Bursa Malaysia, and its members include the chairman of Petronas, Sunway Group, Shell Malaysia, and the managing director of IBM Malaysia.
Companies like Sunway, Maybank and Shell have also significantly improved their flexible work arrangements (FWA) schemes. Many women join the workforce in their twenties but leave it in their late twenties and early thirties to start a family. As more employers adopt FWA arrangements, more women will stay in the labour pool in their thirties and still have the flexibility to start a family.
The timing of Najib’s speech was no accident. National Women’s Day took place at the end of August and Najib seized the opportunity to appeal to female voters.
At 14%, women already make up a higher percentage on public listed company boards than they do in Najib’s cabinet. He ended his speech in July with the mantra, “when women succeed, we all succeed”. Maybe he should adopt this policy within his own cabinet to ensure his own success in next year’s polls.
