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Megatrends like climate change, technological disruption and trade tensions are fundamentally altering our world. There's been a major shift in how and where value pools are created, changing how we feed ourselves, move around, build things and power things. Industries are working together in ecosystems in new ways, propelling value in motion. Businesses are faced with addressing immediate challenges while simultaneously reinventing themselves to survive and thrive in the long term.
The creation of value in motion means that the role and composition of corporate boards becomes ever more crucial. Diverse perspectives are essential, and enhancing gender diversity within boardrooms can effectively enrich discussions, bring varied experiences, and improve decision-making.
While boards in Malaysia are now more gender diverse than ever before, a critical question remains: Why haven't more companies fully embraced the transformative potential of diverse boards, given the continued underrepresentation of women on company boards in the country?
In this extension of PwC Malaysia’s Corporate Directors Survey 2024, we explore why scepticism around gender diversity on boards persists. To support data from the Corporate Directors Survey, we organised a debate as part of a Board Agenda Series, in collaboration with the 30% Club Malaysia and supported by the Securities Commission Malaysia. With these perspectives, we identify barriers and opportunities for advancing diversity in today’s boardroom.
Key highlights
1. Validating diversity’s impact
68% of directors in our survey believe board diversity brings positive outcomes like unique perspectives and better culture. A quarter say that it has enhanced company performance.
Boards are certainly looking for greater ways to extract value from their board composition. 44% of directors believe that stronger linkage between diversity initiatives and business outcomes will most effectively encourage board to be more gender diverse.
Board effectiveness evaluations can offer valuable insights into how diverse boards impact decision-making processes and other performance outcomes. Companies must assess influence and visibility within the board and monitor inclusion indicators, such as board attrition, to ensure diverse voices are genuinely heard.
Source: PwC Malaysia’s Corporate Directors Survey 2024
“Diversity brings impact to boards, but tokenism dilutes this over time. So, we need to bring a shift in how diversity on boards is viewed—from compliance to value.”
Discussions from ‘Board Agenda Series: Diversity in debate’ 2. Meeting demands of the present
Most directors (85%) believe technical expertise remains the most important factor in achieving diversity of thought in the boardroom. When asked about which technical skills are most important, directors highlight digital and industry expertise.
However, women comprise only 35% of Malaysia's digital economy workforce, underscoring significant gender gaps. This pool further narrows due to difficulties in moving from entry-level to C-suite roles.
“The initial days of board diversity was very much target and drive. But we're beginning to see that you need to look at individual capabilities, talent, strengths and place them in the right roles for you to really see impact.”
Discussions from ‘Board Agenda Series: Diversity in debate’
Source: PwC Malaysia’s Corporate Directors Survey 2024
While boards race to pad the ranks with the necessary technical skills, they should also consider how broader criteria can allow for richer representation. Incorporating unique values and soft skills can drive better board effectiveness, helping them remain adaptable to future challenges.
3. Perceptions of the talent pipeline
65% of directors say they actively seek out women candidates for board positions, but nearly half (46%) identify a lack of qualified candidates as a key challenge to having a diverse board. And while they recognise the importance in getting more women on boards, our survey shows that their organisations are not as likely to invest in strategies that boost the talent pipeline, such as gender targets and mentorship programmes.
Source: PwC Malaysia’s Corporate Directors Survey 2024
“To that point of lack of qualified candidates—maybe we need to redefine what is a qualified candidate”
Discussions from ‘Board Agenda Series: Diversity in debate’ Boards that genuinely want to make progress on gender diversity need to go beyond the optics of appointment and examine the biases that may be embedded in how ‘qualified’ is defined. If technical expertise remains the priority, then the responsibility lies with boards to ensure that they're exploring different avenues in sourcing talent and that women are given equitable access to these opportunities.
Three strategic actions for gender-inclusive boards
Implement strategies to improve inclusion in boardroom:
What steps are we taking to promote a boardroom culture that values inclusion? Do we have a chair who is truly committed to fostering an inclusive environment?
Highlight the synergy between skills and gender diversity:
Do we have the right mix of experiences, skills, and backgrounds to position ourselves to succeed in light of the complexities of today? How do we ensure our board composition reflects a balance between varied competencies and gender representation?
Cultivate talent pipelines intentionally:
As a board, are we exploring avenues to source talent—outside of conventional networks? How are we identifying and addressing barriers that might prevent certain individuals from reaching board or senior leadership positions?
About the survey
PwC Malaysia’s Corporate Directors Survey analyses the views of company directors from across Malaysia on a variety of corporate governance issues. We collected responses from 90 directors across diverse industries through surveys and interviews between 6 September to 18 December 2024.
The respondents represent a cross-section of companies from different industries, 72% of which have a market capitalisation of more than RM1 billion. 52% of the respondents were men and 45% were women.
We express our sincere gratitude to all survey participants who have contributed valuable insights to our study, and to the Minority Shareholders Watch Group for supporting in the survey distribution.
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