Recently, the Prime Minister Najib Razak announced that starting next year, Public-Listed Companies (PLCs) in Malaysia without women in their board of directors will be named and shamed, and these PLCs may lose contracts and projects from the government. This move is the most recent of many efforts by the government to include more women in the decision-making process of companies in the private sector.
“I have given warning that next year, we will publish the list of PLCs that do not have women on their boards of directors. We will name and shame these companies. I can also threaten them by not giving government contracts for the really recalcitrant companies. That way, I believe there will be a dramatic change in women representation on boards of directors,” – Najib Razak, as reported by Straits Times.
However, the lack of women making decisions in companies is just part of a bigger issue regarding women in the Malaysian workplace. In the 10th Malaysia Plan, (2011-2015), the government had put forth the idea of empowering women to enhance their economic contribution. This included not only efforts to encourage more women to enter the labor force, but also to enhance the quality of their participation by increasing the number of women in decision-making positions.
The government had since tried various ways to increase the Female Labor Participation Rate (FLPR), such as promoting more flexible working arrangements and childcare facilities, providing tax incentives and opening up more opportunities for women, and their efforts had been somewhat successful.
“Through these initiatives, we have seen a steady increase in the FLPR from 47% in 2010 to 54% last year (2015). This translates to an additional 700,000 women in the labour force.” – Datuk Abdul Rahman Dahlan, a Minister from the Prime Minister’s Department, for the Star.
Among the targets set by the 10th Malaysia Plan was for women to hold at least 30% of all decision-making positions by 2015. However, as of June last year, it had been found that only 11.5% of top corporate decision makers are women, compared to the 7.7% when the Plan was first announced. The government sector, however, had exceeded the target, with 36% of women in top positions. The 30% target deadline had since been moved forward to 2020.
Looking at the outcomes, one might wonder whether the recent initiative to shame PLCs without women in their decision-making process will really empower women economically. To answer that question, Cilisos spoke to a few women and men from different backgrounds to see their perspectives on the recent initiative, and here’s what they have to say about it.
Not every woman agrees with the quota system
Nurul Farihah, an admin assistant at a publishing company, for one sees this as a chance for women to be empowered.
“As a woman, I support it as it can indirectly increase the self-esteem of other women. We can’t all have dreams of being a cosmetics millionaire. So many women with degrees nowadays end up in the kitchen. They need better options,” – Nurul Farihah
Some studies, on the other hand, showed that women in top positions may increase more than self-esteem. A study by the Institute of Study for Labor (IZA) suggested that successful women may become even more successful in a company with female leadership. Companies with more women in directorial positions are also more likely to hire women executives, American Tan Heang-Lee, a Communications Officer from the Woman’s Aid Organization (WAO), also supports the move.
“We welcome initiatives to improve women’s representation in boards, including naming and shaming companies that don’t have any women board members. Women’s voices must be included in the highest level of decision making.” – Heang Lee.
Ihsan, an IT specialist working in a Public Listed Company, does not think that it will make much of an impact in terms of the decision-making power of women in companies, as most decision-making are done through a majority vote. However, including women as board members may produce cleaner decisions, based on his experience.
“There might be some positive effects from this, as in my opinion women are more morally sound than men. They might speak up against corruption in decision-making. Men are generally more chill with it. From my experience, women in higher levels of management tend to think twice before committing a wrong. Even if the majority does decide to do something wrong in the end, at the very least some women will speak up against it.” – Ihsan
However, not everyone we spoke to agreed. There is the problem of threatening companies to have female directors, with consequences if they don’t. Nabila Aiza, a freelance tour leader, is concerned about both the function and ability of the women being chosen to become directors just for the sake of avoiding shaming.
“For me, I don’t think that’s a good move as it seems forced… It’s not suitable, because some companies might be burdened with rearranging their organizations just for the sake of putting a woman in their board of directors. The women will just be puppets there, she won’t be making any actual decisions. Just being there for the sake of filling a quota. There might also be the possibility of undeserving woman being put there not because of her abilities, but because she’s a woman.” – Nabila
Prof Madya Dr Rafidah Hanim Mokhtar, the vice-dean at USIM, felt that there is no need for quotas, and that punitive measures aren’t the best solution to this issue.
“…this would mean that they might appoint a woman just because they’re afraid to get shamed. For me, it suggests that the talents of women are not appreciated, actually. I think such a method will lead to companies having a woman in the boardroom just to not get punished. If we take a look at university admissions, we did not set a quota for genders. Women can fill up universities naturally, without a need for quotas.” – Rafidah Hanim.
Natalie, a former assistant manager at a resort, felt that the government’s move won’t tackle the real problem at all, as in this matter it was the companies themselves who chose not to place women in their higher managements.
“In the first place, we need to know first why a company wouldn’t want women in their board of directors. For me personally, in this case it’s not that women are not capable, but it’s the companies who won’t let women be in their board of directors. So even if the government does force them to take women, will it change things? I don’t think so. Because it’s the company’s decision in the first place to not take women… Women out there might listen to this and think, oh, the government is so good, what a sweet thing to do for women, but I’m not sure if there will be any impact.” – Natalie.
Forced or not, it can’t be denied that this initiative, should it be done, will create more opportunities for more women to advance their careers to the director’s level.
Malaysia isn’t the first country to set quotas for women.
In 2003, Norway made history as the first country to legislate a gender quota. Some 600 companies were told to raise the number of women in their board of directors to 40% by July 2005, with the initial percentage of women directors being only 8.4% at the beginning of 2003. Should they fail to do so by 2007, they would risk losing their board certifications, which basically means they can’t do business.
In the beginning, the announcement received objections from the affected groups, with business groups saying that such a quota would be unrealistic and counterproductive. While there is a fair amount of criticism on the move, it seemed to have worked. As of last year, only Norway and Iceland succeeded in reaching the national quota objectives for female representation on boards.
Iceland was the second country to put a 40% female quota for corporate boards in 2010. In 2015, it was reported that the percentage of women in boards for Norway and Iceland was 39% and 44%, respectively. Other countries had since enforced different ways to include women in the decision-making processes of their companies. In India, its Companies’ Act 2013 made it mandatory for companies to have at least one female director on the board of listed companies.
France in 2011 passed a bill that puts forth different approaches for public and private companies. Public companies were required to have 20% female representation within three years, and it should reach 40% in six years. Private companies, on the other hand, were given nine years to reach the 40% target.
However, there is the question of whether a quota system will work in Malaysia as well, and whether it will change anything. Regardless of differing cultures and economy size, Siri Terjesen, a professor at the Kogod School of Business, American University, saw that female representation in the boardrooms will only make a difference once a certain amount is reached, and that is approximately one-third of the board, or 33%.
“If the percentage is lower than this, the effect is little more than symbolic. It is when women feel that there are several of them, that they are not sitting alone at the table, that they begin to exercise their power.” – Siri Terjesen, as quoted by Kilden, a Norwegian gender research newsletter.
Inclusiveness can mean better results, but perhaps not this way
When asked whether it’s good to include women in the decision-making process for big companies, Mas Maria had said that men and women have different ways of thinking, so having a diverse board of directors can’t be bad for a company.
“There are certain parts where men are better at, and some parts where women are better. In my opinion, sometimes men have better opinions, sometimes it’s women with the better opinions. So I think that it’s better for a company to have both men and women in their decision-making processes. Having only men or only women making decisions for a company can’t be good.” – Mas Maria
Siri Terjesen had noted a lack of quantitative research on the relation between female board members and a company’s earnings. There are, however, studies that report companies having women in their boards to have better and more productive conversations.
“Women often come onto board with more wide-ranging experience and a broader employment background than men, and studies show that they ask tougher questions and are more concerned with challenging the status quo.” – Siri Terjesen, as reported by Kilden.
However, does enforcing gender quotas on companies the best way to go? Tryve Hegnar, the leader of a Norwegian media group, had admitted that women may be just as good as men, but for governments to pressure companies into having a certain type of people in a company’s boardroom may not be a welcome thing.
”Of course, women have the same sort of knowledge and are qualified. The point is you have shareholders and they have the right to appoint who they want. If I spend $10 million on a company, I should have the right to elect the people I trust. To take the right away is not right.” – Trygve Hegnar, as quoted by New York Times.
There are other ways to increase the number of women directors in PLCs, after all. Dr Rafidah, for example, suggested using incentives to encourage companies to hire more women, such as giving companies with women directors tax rebates or a preference for government loans rather than motivating companies through punishments.
The government made more efforts for women to participate in running Malaysia’s economy, but there are a lot of issues to be resolved along the way. Through our interviews, we discovered that some women, particularly in the private sector, are sometimes discriminated against, most often due to their ability to get pregnant and have children.
“Once, I was pregnant at work, and I get tired easily. My boss said in front of all the staff ‘That’s why you get pregnant! Too much f*cking!’ He said it jokingly, but it still hurt. For married couples, being pregnant is happy news. To have this guy talk like that… It’s not good. He sees pregnant women as a liability to his team,” – Natalie
“I was once refused a job because I’m a lady. They said they already have plenty of women, and it’ll be a problem if we all get pregnant at the same time,” – Farihah
A lot of our interviewees saw their female colleagues quit their jobs to look after their children and families, and to overcome that problem they suggested more flexible working hours or the option to work from home, and one suggested that more jobs that allow these are created to increase the number of working women. However, some may argue that such jobs should pay less than full-time jobs, especially if the value contributed through those jobs are smaller. Globally, pay disparity between genders is a pressing issue, with the UN quoting that women only earn 77 cents for every dollar a man earns.
Mas Maria said that when women enter the workforce, they are often torn between their responsibility to their jobs and the responsibility to their families. Therefore, in considering equal pay and opportunities for women, perhaps policymakers can weigh what a woman can do that contributes more value to the nation; working, or child bearing.