Women on Corporate Board of Director Essay
Women on Corporate Board of Director
In this decade, we have seen an increase in women’s participation in the board of director. Previously, we can see around the world, every board of director of a single company led by men only. But, over the time, women are slowly absorbed into the board of director and they play a great role as well as a good impact in the improvement of the company.
A new study suggested that, putting women on boards of directors is a good way to make companies more profitable and better governed. It is because a woman is more likely to take a collaborative approach to decision-making and reach a broader consensus with buy in from all players.
Men, on the other hand, are more likely to use rules, regulations and traditional ways of doing business or getting along. “It’s the ‘Mom effect.’ Men are less prone to lose their temper or be alpha males when a lady joins the board,” say McMaster business school Professor Chris Bart. And having one or more women on a board translates into higher sales, better returns for shareholders and fewer corporate bankruptcies.
Most countries put the quota at least at a certain minimum level of participation of women in the board of directors. There are also countries that do not put a quota of men and women’s involvement in the board of directors. Countries like the United States and Singapore do not put any gender quota for women on boards or in senior management positions. On the other hand, countries like Malaysia put a minimum quota for representation of women on boards.
Prime Minister Datuk Seri Najib Tun Razak announced that the Malaysian Cabinet approved legislation where corporate companies must achieve at least 30 percent representation of women in decision-making positions in the private sector, to promote gender equality. Some countries like Norway have even introduced formal laws requiring female representation on corporate boards.
2.0Board of Directors
In every organization, board of directors plays a significant roles and responsibilities to ensure the company is achieving their strategy and goals. Directors’ duty in any tasks is very critical such as solve the problem, make a decision, plan a strategy and potential project. Their contribution to the company can help he company to achieve the highest value in any aspects. Therefore, this part will briefly explain about director and board structure, role and responsibility of directors, and the legal requirement in company’s board’s directory (Amendment Act 2007). 2.1Director and Board Structure
The board of directors leads and controls a company and hence an effective board is fundamental to the success of the company. The board is the link between managers and investors, and is essential to good corporate governance and investor relations. The duty of the board is responsible to determine the company’s aims and the strategies, plans, and policies to achieve those aims. The high performance board must achieve three core objectives.
The core objectives are providing superior strategic guidance to ensure the company’s growth and prosperity, ensure accountability of the company to its stakeholder, including shareholders, employees, customers, suppliers, regulators and the community, then, ensure that highly qualified executive team is managing the company. Actually, for more understanding about the women and board of directors, we would like to explain the definition of board of directors.
According to financial dictionary, board of directors means:- “A board of directors is a team of people elected by a corporation’s shareholders to represent the shareholders’ interests and ensure that the company’s management acts on their behalf. The head of the board of directors is the chairman or chairperson of the board” So, a woman on the board of directors is involving the women in managing the company through the position on board. The situation that women occupied the board also known as gender diversity on the board.
The board should include a balanced gender of men and women to achieve the effective board. Nevertheless, in reality now, that has statistical evidence of the unequal progress of women and men in achieving board-level positions, both on the UK and across the world. Lack of the occupy women on board not due solely to an absence of knowledge. On the contrary, women have been “over-achieving” in terms of education and qualifications more generally. OECD data (2011) now show that women and girls outperform men and boys at every stage in the education system, including postgraduate education.
2.2Role Boards of Directors
A board of directors is the most important body in every organization. Every organization has boards of directors consisting of a few people who are eligible to drive the organization to achieve what they want. People who are on the board of directors were among those who are believed by the company’s shareholders. They are usually a volunteer who is trustees of the corporation who represent and responsible to the company’s clients, to the community, to funders, to the government and to taxpayers as a whole.
They were given a high confidence entrusted to run the company well based on knowledge and values that they have. Attributes such as trustworthiness, hardworking, confident, able to make decisions with accurate, honest, intelligent, high integrity and others should have in every individual who is a part of the board of directors.
On individual attributes like these that can lead an organization to achieve the set goals as well as to enhance the company’s competitive advantage in the global market. Each individual in the boards of directors will not act on its own, but act in their group. Individuals on the boards have no power except that which is expressed by a majority vote of the boards as a whole.
Communities always ask what job boards of directors are because their work rarely seen by the naked eye and difficult to construe. But when there is a problem, they will be the spotlight and the center of attention to solve the problem. Although the boards of directors in charge of keeping the company in the best possible, but there are still a few of directors of companies which own the fraud. Certainly this was true of the Enron, Worldcom, and Parmalat scandals. The directors of Enron and Worldcom, in particular, were held liable for the fraud that occurred: Enron directors had to pay $168 million to investor plaintiffs, of which $13 million was out of pocket (not covered by insurance); and Worldcom directors had to pay $36 million, of which $18 million was out of pocket.
The existence of boards of directors in an organization has its own role and responsibilities. Boards of directors are responsible for creating the organization’s mission, which is the purpose for which it was formed, and values statements, for writing and monitoring the organization’s strategic plan to accomplish its mission, hiring, evaluating, supporting, and sometimes firing the executive director, insuring the fiscal integrity of the organization’s operations and records, representing the ideas, culture, needs, and desires of the community it serves, and developing policies and procedures that assure that employees are treated fairly and within the law.
Below are some of the roles and responsibilities of boards of directors.
2.2.1To Hire, Support, Assessment and Fired the Executive Director. Boards of directors are responsible for finding and recruiting executive director. They need to ensure that appointed executive director has the skills, knowledge, experience, and capability to become leaders in their daily activities. The board should be prepared to give support to the executive director if she or he request for a help, and to see that executive is adequately compensated and that their authority over staff is assured. Assessment can be seen as having two components, one is monitoring of what the executive does and the other is determining the intrinsic ability of the executive.
The monitoring of executive actions can, in part, be seen as part of a board’s obligation to be vigilant against executive malfeasance. Yet, being realistic, it is difficult to see a board actually being in a position to detect executive malfeasance directly, at best, a board would seem dependent on the actions of outside auditors, regulators, and, in some instances, the news media. Indirectly, a board might guard against executive malfeasance through its choice of auditor, its oversight over reporting requirements, and its control over accounting practices.
The board should evaluate the executive director’s performance on an annual basis and provide them with measurable performance goals for the next evaluation period. If they are performing well, they are deserved to be recognized. But, when their performance is judged inadequate and they do not improve even have been supervised, the board is responsible for terminating them.
2.2.2Establish a Policy and Procedure Based Government System. Only the board of directors can establish policies for the corporation. A policy is a rule that follows a standard process by which to measure whether or not the rule has been followed. The rules that the board establishes for the company should be policy based. In other words, the board develops policies to guide its own actions and the actions of the manager. The policies should be broadly and not rigidly defined as to allow the board and manager leniency in achieving the goals of the business.
The board creates the policies and procedures for the governance of the board. The board takes the necessary steps to ensure that the members of the board are knowledgeable about the association, including its policies, culture and norms, the profession, the higher education enterprise which it serves, and the roles, responsibilities and performance of the board. The board nurtures the development of board members as a cohesive working group, and regularly monitors its performance as a board.
2.2.3Develop a Strategic Plan for the Organization.
When an agency is just starting up, and usually at five-year intervals, it develops a strategic plan that predicts, reasonable estimates, and anticipates what the agency will “look-like” financially, programmatically, institutionally, and so on, by the end of a five year period. In this strategic plan, must have steps to be taken to achieve the goals of the organization. After that there should be a specific individual or team to carry out the steps that have been set.
Then require them to carry out the task within the stipulated time only. Boards of directors most often include the executive director, staff, and community members in its strategic planning process and assign responsibility for attaining step success to staff. Consultants are often hired to help boards develop strategic plans and strategic plans are used to educate funders, clients, and other constituencies about what the agency will need from them, and why. Boards of Directors often use the strategic plan as one measurement tool in evaluating the performance of the executive director.
2.2.4Fiduciary Responsibility to Assure the Integrity of its Financial Reports. The board of directors is entirely responsible for how trustworthy, honestly, accurately, and adequately the company handles the money it receives from any source. The board must ensure that its members avoid fraud scandal in the company as has happened in the Enron, Worldcom and Parmalat.
In the event of a connection with the company’s financial problems, how money is used, how the money is protected from any problems and others, boards are responsible for solving the problem. The board is also responsible for assuring that the company has enough money to carry out any plans the board has agreed to complete.
2.3Legal Requirement in Company’s Board Director
Generally, the role of law is to control the human from any crimes and keep the rights everyone. Malaysia also emphasizes the perfect law such as provide the law of director’s duties and develop an efficiency and effectiveness of legal requirements of business corporations in Malaysia. Malaysia is a country which is growing rapidly with the development and establishment of new companies dramatically, has a great impact on changes and amendments related to the company law.
For the example, Companies Act 1965 plays an important role in ensuring the business system conducted in tandem with law enforcement. In case occurs the reform of the law, now commonly known as the Companies (Amendment) Act 2007 (Act A1299) that has enacted on 15 August 2007. This new reformation of the act provides amendments, substitutions and new provisions which these matters are important to be implemented because it create efficiency and effectiveness in business legal system. Actually, that has many sections under Companies Act 1965, to care the position of the board of director.
For the example, under Section 132 of the Companies Act 1965, it indicates that the director shall at all-time act honestly and use reasonable diligence in the discharge of the duties of his office. Nevertheless, this section has a little weakness in Malaysian court practice because this section has shown little enthusiasm to utilize this provision as a guide to decide which this matters relating to director’s duties due to the direct care and skill. However, after the amendment have been made, the content of Act A1299 has been substituted and explained that a director of the company shall at all times exercise his power for a proper purpose and in good faith in the best interest of the company.
It is shown that under Section 132 (1) is limiting the use of the power and makes specific reference to act as a director. Compare to the old Section 132, a director just needs to act honesty and diligence to their job but they can apply some private act for their purpose and advantage due to the power as a director. But the Act A1299 clarify that director only can exercise his power for a proper purpose for the company wealth, not for their individual purpose. It clearly shows the improvement occurred in the law of director. In addition, a change in the Act A1299 is based on Section 132 (2) about the prohibition against ‘use’ of the company’s property, etc.
The original of this section state that director shall not make improper use of any information by using position as a director for their own purpose and advantages whether it is directly or indirectly that can give bad effect to the company. A reform has been done because there is no specific or no detailed reference to the expropriation of any opportunity of the company by the director. It only mentioned of any misuse of the information for a director’s personal purpose.
The reforming occur with Act A1299 replacing the Section 132(2) with the Section 132 (2) Act A1299, and stated that the prohibition against improper use by the director or officer of the company’s property, any information, position, corporate opportunities or competing with the company. Besides that, a director or officer of the company shall not use the company property without the consent or ratification of general meetings. These amendments clearly show that prohibition against directors or officers are more details and specifics.
These reforms give new strength in business legal requirement compared to the law before amendment which is less comprehensive against the prohibition to the director or officer in using company’s property without permission by the business authorities. Then, at the common law, the general meeting may to some extent release director from their fiduciary duty, but there are limits to the exercise of the power. Unfair treatment by the general meeting members to the director who is offended in the company will lead the company to the unpredictable futures that can detriment the company even though the new Act A1299 of Section (2) is applicable.
Therefore, as steps to protect the company and its minority member, the legal authorities should have made it clear that a ratification or consent referred to Section 132 (2) will be ineffective unless it is achieved without the votes of those who are under offender influences or who has a personal interest for own negative purpose in the company. The vote made in general meeting is necessary to ensure that there is no fraud on the minority and fraud on the company. It is important that a resolution to ratify offenses should be passed by the disinterested members free from any influence of the wrongdoers.
Next, corporate business agrees that Section 132 (1) should be amended which a director have a minimum benchmark for their qualification. The director of the company shall exercise reasonable care, skill and diligence with the knowledge and experience. Additionally, the directors also need to fulfill the requirement or standard as a director which is based on knowledge, skill and experience. This new statutory statement of the core standard of director is now adopted, but the evolutionary process may be slow and take many years to develop.
According to the new provision of Section 132 (1E) Act 1299, it states that a director who was appointed by virtue of his position in the company by the qualified authorities, the director need to act in the best interest of the company and in the event of any conflict towards his duty, and his duty to his nominator. Nominee directors are directors who are nominated by a majority shareholder.
This type of director might be put in a difficult position when his duty to the company and his obligation to his nominator are in conflict. Therefore, the director must be finding a manner in how to avoid this conflict from occurring in their daily task. The directors should wisely in using the times in doing their job as a director and being responsible for their job.
Then, directors also have rights and responsibilities in respect of the delegation of their power and delegated by the board in some management function cannot be avoided. Act A1299 amends the original Act by inserting a new subsection (1F) to Section 132 which is explained that the director may delegate any power of the board of directors to any committee to the board of director, officer, employer or any person and person and where the director have delegated any power, and the directors are responsible for the exercise of the power by the delegation.
However, the directors are liable even though they have taken available steps to prevent misconduct by the delegate. According to the new provision under subsection (1G), directors are not responsible under subsection (1F) if they believed based on reasonable cause which is director would use the power delegated in conformity with the duties of the director. Furthermore, directors also need to ensure that the exercise of the functions delegated unless the situation explained that supervision might be reasonably excused.
These new provisions will serve to promote effective and systematic business corporation. Afterward, due to the Section131 (1) of the old Act, it imposes the duty on every director, whether directly or indirectly, interested in a contract or proposed contract with the company to expose his interest at a meeting of the directors. Failure to comply this section is a criminal offense and penalty of imprisonment for seven years and fine of RM150, 000 will be imposed.
Nevertheless, this deficiency was compensated with the addition of a new subsection of (7A) and (7B). Addition of Section 131 (7A) Act A1299 is dealing with the interest of a spouse or child of a director. This new provision explained that the interest of the spouse and the child of a director of the company in the shares or debentures in the company shall be treated as an interest in the contract or proposed contract. While Section 131 (7B) Act A1299 is explaining about civil remedy provided.
This new subsection creates a happy situation for the company which may elect to adopt a favorable contract. This new provision also puts a restrains on the company’s right to rescind the contract by creating an exception which is applicable. According to Section 131A of the Companies Act 1965, it explained about voting and participation at a board meeting of a director who is interested in a contract or a contract proposal. However, the improvement has been made by the new provision of Act A1299 which is the addition of a new section 131A to bar an interested director from voting and participating at board meetings.
The new section allows the interested director to be present at the bomeeting, thereforefore he cannot participate in the discussion or chat in a resolution adapting to contract. Civil and criminal punishment will be imposed for a breach of the Section 131A. Lastly, the function and power of the board was explained in Section 131B of the Companies Act. The amendment has been made and the purpose of the new subsection (1) is to give statutory recognition and statutory force to the commonly accepted rules that the board primary function is to manage or oversee the conduct of the company’s undertaking.
This new provision was a clear statement to the board as its responsibilities and clear direction to the courts of the amount of function and duties of the board. On the other hand, this new subsection (2) recognizing the board’s power of management and supervision of the business and affairs of the company. For this reason, it will become a reminder to the director and outsiders that the powers of management are still subject to any modification, exception or limitation contained in the Act or the memorandum or articles or association of the company.
3.0Findings: Women and Board of Director
Nowadays, many gender issues arise in every sector likes economy, business, politics, social environment, entertainment, etc. Obviously, gender issues which involve women always stated that women are only creates and provides disadvantages rather than benefits. But, the truth is women also have many benefits in term of capabilities, skill, and strength the provided value to the organization as well.
Thus, this part will illustrate the gender differences and board tasks, gender differences in leadership style, appointment of woman as a corporate board of director, benefit of women as board of director, the capabilities of women as board of directors, the current issues of women and BOD (example of the United Kingdom), the impact of woman in corporate boards, and woman on the corporate board of director: an issue of Malaysian Corporate Governance perspective.
3.1Gender Differences and Board Tasks
Boards with a higher ratio of women directors may have differential impacts on the performance of distinct board tasks. Board operational control tasks refer to the board’s responsibility to supervise managerial decisions regarding investments, cash flow, dividends, financial statements, and so forth, that is decisions concerning the firm financial and accounting situation requiring strong quantitative background knowledge and skills.
Strategic control, on the other hand, refers to monitoring managerial decisions regarding firm strategy as well as organizational practices and policies such as safety, health, and environment, and, accordingly, assumes more analytical and visionary skills.
While operational control tasks are more routine and ex-post, strategic control tasks are ex-ante, more complex and creative, and require a broader range of perspectives. Prior research suggests that women are particularly valued as board members for their ability to provide strategic input and generate more productive discourse. The productive discourse involves presentation of different perspectives and points of view, which ultimately may result in the generation of more numerous alternatives and higher quality decision-making related to organizational strategies and practices.
In addition, the unique role of women on boards is often reflected in their participative management style and in higher sensitivity compared to their male colleagues. This ability, combined with women’s attention to and consideration of the needs of others, may lead to women’s active involvement in issues of a strategic nature that concern the firm and its stakeholders. Hence, women may be particularly sensitive to – and may exercise influence on – decisions pertaining to certain organizational practices, such as corporate social responsibility and environmental politics.
Accordingly, women directors may contribute substantially to the board control tasks for issues of a strategic nature. Thus, it can be expected that boards with a higher ratio of women directors may be more effective in performing strategic control tasks. 3.2Gender Differences in Leadership Style
Group effectiveness theories postulate that the nature of the tasks performed is an important moderator between team composition and effectiveness. This argument implies that a board with a certain composition may be better at performing one task than the other as the two distinct sets of board tasks require different skills for their effective performance. Similarly, research on gender differences suggests that women may behave differently than men and be more effective in the performance of certain tasks over others.
This applies gender-based differences in leadership theories in the context of gender diversity on corporate boards in order to offer new insights as to how gender diversity might influence board processes, dynamics, and task performance. The literatures on gender-based differences assert that women and men are different in their leadership behavior. Aspects of gender differences that are important to understanding leadership pertain to agentic and communal attributes. Agentic characteristics, which are ascribed more strongly to men than women, include being assertive, ambitious, aggressive, independent, self-confident, daring, and competitive.
In a work setting, agents’ behavior might include speaking assertively, competing for attention, influencing others and making problem-focused suggestions. Communal characteristics, which more strongly ascribe to women than men, describe primarily a concern with the welfare of other people and being affectionate, helpful, kind, sympathetic, interpersonally sensitive, nurturing, and gentle.
In work situations, communal behavior might include speaking tentatively, not drawing attention to oneself, accepting others’ positions, supporting and soothing others, and contributing to the solution of relational and interpersonal problems.
In a synthesis of prior research on managers, found that women tend to be more democratic and participative and less autocratic and directly compared to male leaders. Research has further established that female leaders, compared with male leaders, are less hierarchical, more cooperative and collaborative, and more oriented towards enhancing the others’ self-worth. On the other hand, social scientists typically claim that in management positions such differences are minimized.
It is believed that women who pursue the non-traditional career of manager reject feminine stereotypes and have needs, values, and leadership styles similar to those of men who pursue managerial careers. Consistent with the structural interpretation of organizational behavior, scholars predict that men and women who occupy the same leadership role will behave very similarly. However, others argue that gender differences continue to exert some influence, in such a way that men and women in the same organizational roles may behave somewhat differently.
Accordingly, reviews of prior research reveal that whereas there are no overall differences in effectiveness between women and men leaders, there are some gender related differences for some behavior and skills in some situations. Hence, these gender differences may not affect the general effectiveness of the board but the performance of certain board tasks.
3.3Appointment of Woman as Corporate Board of Director
In recent decades, corporate governance and board of director has become an interesting conversation in the corporate business world. Many parties especially the stakeholders of the corporation are pressuring the business to improve their management skills and governance. While many corporate companies are trying to find more efficient and competent directors, the traditional way is no longer adequate to be used to meet the need for board members to search the qualified other board member.
Nominating committees and search firms are enlarging their scope of their search for qualified directors and dipping into new pools of candidates, including women. Nowadays, a woman’s contributor in corporate governance gives a lot of development and changes for the corporation by providing an outstanding idea, good decision makers, and supports for their employees and so on. Some of the procedures and policy of the company in selecting the directors is only based on selection of male directors and women are not allowed to be a board of directors’ member.
According to Zena Burgess and Phyllis Tharenou, in order to create change in the representation and status of women on company boards will require changes in the policy and procedures of companies recruiting directors. They also have identified a range of strategies for companies to appoint women on boards.
3.3.1Redefinition of the pool of eligible directors
Redefinition of the directors that who are qualified and suitable for the role as directors of the company is very essential in order to ensure that the company is able to attain the goals within the strategy as prescribed by the top management to maximize the value of their shareholders.
Mates (2000) have argued for a change in the definition of eligibility of appointment to allow for women who have other senior management experience to be considered and the women who should be considered may not already hold a board appointment. Experience in management show that ability of the person to solve the problems with minimum time, have a communication and thinking skills, and have a good decision making.
The experienced women in a management team have a wide perspective of the company strategy, companies’ future and long term goals, and have high involvement in the company’s profit-based activities. For example, the company performance shows that turnover is more sensitive to stock return performance in firms with relatively more women on boards.
Then, Mattis (2000) also mentioned that broadening of the candidate pool would provide increased opportunities for women. Broadening the candidate pool is depending on the board members’ decision in the organization and sometimes, it also depends on the amount of seat vacancy left by the former directors. However, it has become a good opportunity for women to be a board of director’s member in the organization based on the policy and procedures of directors of the corporation.
3.3.2Internal company promotion
The success of the company sometimes is due to the top management outstanding decision and performance. A senior manager in the organization usually plays a big role in their company in order to achieve profitability. Outstanding performance and outcomes by the senior manager could be used to
measure the quality or benchmark for the manager before they are being promoted by the top. By providing career ladders for the workers in the organization to gain core business experience within the company, women manager can be developed, promoted and appointed to be a board of director.
In order to appreciate and gratitude to the efforts shown by the manager for the organization, women within the company may become suitable appointments to their own company board. By appointing existing workers to become a board of director, they are already experiencing about the whole company’s structure, operation, culture, knowledge, employees and employers’ role and so on. Furthermore, women directors also contribute unique skills, knowledge, and experience to their boards.
3.3.3Objectification of the selection process
Selection of the new board of directors is a critical process for the organization. The recruitment of the newcomers in boardroom determined the company’s future due to the big role of the board of director in organizing. The selecting process can be formal or informal. For example, the selection process for company directors tends to be informal through the personal recommendation and networking, rather than relying on objective criteria or a standardize process.
Personal recommendation or suggestion might be coming from internal employee or employers who are know that the person have an ability, skills, and qualification to be a board of director. On the other hand, the suggestion of somebody might be due to the relation between the proposer and the person appointed. In today’s world, networking with other people is very important in order to gain benefits from the relationship. Networking also can give many positive reasons such as the relationship between the boards of directors in the organization and board of directors from other company.
If the board of director in another company have resigned or has been fired, the networking relationship can help that director to be appointed in the new organization. But the informal selecting process is more prone in selecting a male as a corporate board of director. Through a formal selection process formal guideline such as executive search companies, advertising agencies, media advertising and others, the selection is very costly and time consuming rather than informal process.
But these processes become guidelines for nominating committees to help avoid a tendency to select people that are similar to the current board of directors. The formal selecting process creates a big opportunity for the qualified person not only from internal company, but also in external company especially for women. Nowadays, the world has a lot of educated and women experience in management and directing field. By identifying different minorities’ amount in women directors, they also could have an impact on the level of firm innovation. Thus, women should also be given the opportunity to participate in the board of directors of a company.
3.3.4Board subcommittee involvement
The issues of gender diversity also arise in a corporate board of director. Even though sometimes both of male and female directors are aligned in their opinion, reason and outlook on many aspects, but gender diversity in positive point of view has been seen become a reason on why women and men have different skills, ability and strength. For example, a woman is good at communication skills, marketing and sales, dealing and persuasive skills, negotiation ability, good social interaction, very understanding, and etc.
While a man is better at decision makers and problem solving skill, emotional stability, higher job involvement, and so on. Thus, from this situation, by appointing women as a board of director, they can be allocated and involve in the essential areas of the company such as corporate social responsibility, sales and marketing, public affairs, financial aspect, and other’s suitable field rather than men. The role of women in board of director can create competitive advantages to the organization by maximizing their advantages or benefits.
Organizations are encouraged to make a fuller use of the skills and abilities of their woman directors in corporate governance in order to attain organizations’ mission, vision, and objectives. It is argued that increasing women’s directors’ visibility in core board governance roles will lead to enhanced recognition of the value of women directors. Therefore, gender diversity is important for organizational success, but many boards lack awareness of best practices in this area and uncertain about how to integrate diversity and inclusiveness initiatives into their organization’s long-term strategy.
3.3.5Diversity and good business
Nowadays, most of the countries support the gender equality in every aspect including in corporate board of directors. The increased amount of women participation and contribution in corporate business shown that role of the women in the organization are widely accepted.
The establishment of Women Corporate Directors (WCD) bodies shows that the essential contribution of women in the corporate business world cannot be disputed. Women Corporate Directors (WD) is the only global membership organization and community of women corporate directors and the mission is to continue to expand the WCD community through leadership, diversity, education, and best practices in corporate governance.
In Australian as an example, the increased number of women on the board of director shows that woman in the corporate business field give many significant value to the economy as well. The percentage of women on boards of Australian Security Exchange (ASX) of 200 companies and the proportion of women comprising new appointment increased significantly in 2010, 2011, and 2012.
Figure 1: Percentage of female directorships on ASX 200 boards
From the figure above, it shows that the participation of women in Australia in corporate board of directors has increased every year. Therefore, the company CEO and top management should encourage supporting and acknowledging the importance of women as a business source due to their benefits and capabilities, and strive to enhance women’s opportunities in management and decision making aspect on the director’s board.
3.4Benefit of Women as Board of Director
In recent years, there has been increasing pressure from both society and investors to appoint women directors on corporate boards of directors. The low number of female board appointments is really a symptom of a problem, not a cause. In a certain country, a man is gaining attention and given the opportunities more than women to be a board of directors especially in Asia.
But it can be assumed, that a lot of issues related to women serving on corporate board of directors cannot be derived by their gender only because women has been seen as contributing positively to the board’s functioning and process. There are several benefits to the corporations from an increase in women directors. According to Douglas M. Branson, the benefits are a positive role model to other women, boardroom diversity and function, and leads in purchasing power in the economy.
3.4.1Positive role model to other women
Women as board of director in the organization can become a positive role model to other women outside. They know that if the some corporate woman director can achieve a high level of management and directory field, why she should not be like that.
Many successful women in the world in management field become a role model of the world’s female because of its role, responsibility, spirit, ability, skills, insights, wisdom, socially engaged, etc. of the organization as well as to the economic sector in the country. For internal company also, female directors as a role model of the company’s employee can influence and improve female employee in term of their performance, outcomes, work culture, motivation and boost companies’ image.
For example, the percentage of women in Financial Times Stock Exchange (FTSE) 100 companies have risen slowly from 6.9% to 12.5% over the last decade and this percentage of women directors seems to be correlated with demographic and geographic factors. It is indicated that most of the female boards of directors are most influence of the women in their region and place. The improvement of the women in the boardroom in the organization even only a small percentage in certain countries, shows that success women can become a positive role model to other women.
3.4.2Boardroom diversity and function
Male and female have a different ability, skills, strength and others. These criteria can create an innovative and creative environment, diverse function and role, have different ideas, insights, or opinion, variation of perspective between man and women, which all these benefits can create competitive advantages to the company with other competitors. On the other hand, the diversity also is able to develop and sustain the performance of the company.
Obviously, the function of the board of directors is the most important things because it determines the direction of the organization aligned with the organization’s goals. Most of the board committees recognized that by appointing the directors of different ages, different kinds of educational backgrounds and work experience, different functional expertise, they tend to attain a lot of benefits in the boards function due to the gender diversity.
There are several benefits to appoint more women on boards. When Fortune-500 companies were ranked by the number of women directors on their board, those in the highest quartile in 2009 reported a 42% greater return on sales and 53% higher return on equity. Moreover, a woman also is very concern about the long-term achievement and priorities. Experts also believe that the companies with women as a board of directors managing the risk efficiently because women are very concern about some aspects in the company’s performance such as keeping the customer satisfaction, employee involvement and welfare, value of their shareholder, corporate social responsibility and public affairs.
For example, based on the new study in Canada, women who sit on corporate boards are more open to new ideas than their male counterparts and their skill often translate into better decisions and financial success for the company. The survey also found that 624 board directors polled in Canada, women are more likely to adapt cooperation, collaboration and consensus building when dealing with complex decision.
Rather than male directors which are most often made decision by using rules, regulation and traditional ways of doing business. Thus, it is indicated that women’s contribution in a boardroom can cause big positive impact to the organization as well.
3.4.3Leads in purchasing power in the economy
In today’s economic world, a woman is dominating the purchasing power in all over the country because a woman is holding the majority ratio in the world. Based on the research in the United States and Europe, women drive 70% of purchase decision by consumers in the European Union and 80% of them in the United States.
As a household who is managing the house, women are more likely to make a decision in buying something and aware about what is lacking, so they will only insure in deciding to buy which the product they buy give big value to them. In terms of women’s role in the boardroom, due to the purchasing power that they have, they are very alert whether investment make by the company provide a lot of benefits and good returns with less risky or not.
Women on boards also will ensure that the company is aware to avoid waste such as reduce waste of resources, energy (labor) and money waste, waste of time and so on. The presence of women in a corporation’s board also would filter out to and sway potential purchasers that only provide a minimum value to the company.
3.5The Capabilities of Women as Board of Director
Nowadays, that has many research were made to measure the capabilities when a company take many women on the board of directors. It is because women have their ability and talent to develop and keep the company to achieve the mission and vision. The business case for gender diversity on board has four key dimensions that are improving performance, accessing the widest talent pool, being more responsive to the market, and achieving better corporate governance. Improving performance is one of the benefits when the women occupy on the board.
Improving performance in the case is explained on how the appointment of women directors can improve a company’s performance. Female directors enhance board independence. Women take their non-executive director roles more seriously, preparing more conscientiously for meetings Women tend to take seriously about the preparation of the meeting and also often ask more questions without just nodded only. It is better and will get the perfect meeting and avoid the empty meeting. From the meeting, all of the plans were made and the framework also complied. At the same time, all the issues arising also were discussed in the meeting.
If the meeting filled the benefits discussion, so the performances of the company also arise. Besides that, women have become the new majority in the highly qualified talent pool. For the example, in Europe and the USA, women account for approximately six out of every ten university graduates and in the UK women represent almost half of the labor force. Take it benefits is very significant because failure of any business or economy to maximize the talents of its entire people will result in below-par performance. According to British culture in their company, talent pool is very important to remain competitive and respond to rapidly changing expectations and market demands.
On the other hand, more than half of the students graduating from Europe’s universities are women, the system including suitable candidates of both sexes ensure that board members are selected among the best distribution of both men and women. Increase intelligent women appeared at this moment. So, it is clear that all the company should take more women on board to make the company more competitive and rapid. Then, the benefit is being more responsive to the market. Naturally, the attitude of women is very sensitive to around situations than men. So, this attitude also applied in their career.
Having women on boards, who in many cases would represent the users and customers of the companies’ products, could improve understanding of customer needs, leading to more informed decision making. The sensitive and more responsive will cause the company always alert with the change. The company can generate the maximum profits with ways to fulfill the demand from consumers. At the same times, the company also can reduce their cost when women on board very alert about the alternative or other way to minimize the cost. On the other hand, the benefit has achieved better corporate finance.
From the Canadian study known as the title “Not just the right thing, but the bright thing” found that board with three or more women on them showed very different governance behavior to those with all male board. Actually, the balanced gender on the board determined more likely to identify criteria for measuring strategy, monitor its implementation, follow conflict of interest guidelines and adhere to a code of conduct.
They were more likely to ensure better communication and focus on additional non-financial performance measures, such as employee and customer satisfaction, diversity and corporate social responsibility. They were also more likely to have new director induction programs and closer monitoring of board accountability and authority. So, on board of directors should have the balanced gender, for the company will be balanced and not appear the severe conflict.
3.5.1The better decision making
Normally, making a decision is divided into three types of reasoning. The reasons are personal interest reasoning, normative reasoning and complex moral reasoning. The personal interest reasoning type is the decision maker is motivated by ego, selfishness and the desire to avoid the problem. The normative reasoning type is the decision maker tries to avoid “rocking the boat” by adhering to the rules, norms or laws.
The complex moral reasoning type is the decision maker acknowledges and considers the rights of others in the pursuit of fairness by using a social cooperation and consensus building approach that is consistency applied in a non-arbitrary fashion. Putting women on the board of directors is the better way to make the governance to become profitable and effective by helping in decision making.
Men and women on board of director such two strong lines that have the difference of superiority and should be generated and to combine both of them to make the excellent management on board of directors. Consequently, the governance of the companies becomes smooth and will get many of advantages at the variety of parts than the other companies that not included the women on the board.
The reasons of the statement are because a woman is more likely to take a collaborative approach to decision-making and reach a broader consensus with buy in from all players. It is one of the reasons that showed the advantages if the women joined on the board of directors. Decision making is the most important thing that brings the company whether toward effectiveness or default. So, the character of the women more tend to make collaboration with all of the players in the companies caused the decision making become perfect.
The generated idea of the varieties of the players is open to many brilliant ideas and good experiences from some bodies and they will get the accurate decision making. Secondly, women’s abilities to make fair decisions when competing interests are at stake make them better corporate leaders. The statement is clearly that the women as a corporate leader more democratic when they are more thinking about the other players in the companies. Actually, fair decision perfectly is not the easy matter to do it but tend to make the fairest decision will cause all of the players will be satisfied to the company.
Nevertheless, fair decision is important to all players and will be encouraging them to more competitive with each other’s. For example, the increase of the salary be measured by dedication in work not through propping the chief. A survey of more than 600 board directors showed that women are more likely to consider the rights of others and to take a cooperative approach to decision-making.
This approach translates into better performance for their companies. In addition the women directors are more prepared to rock the boat than their counterparts. Usually, the male directors are more egoistic characteristic. This character will be affected by the result and the company will face the big problem and may be to become bankrupt. The rock the boat is very important when one the company faces the critical situation. The women’ s directors are less constrained by the strained situation and miraculously likes having a power of women to make from the critical situation to become settle down smoothly.
Actually, the power is from the rock the boat and they can think and act perfectly to settle down the problem. In addition McQueen also said about the attitude of the majority of women on the board of directors. “Women seem to be predisposed to be more inquisitive and to see more possible solutions. At the board level where directors are compelled to act in the best interest of the corporation while taking the viewpoints of multiple stakeholders into account, this quality makes them more effective corporate directors”. Generally, the involved with women on the board of directors will be the good effect of management and administration of the company.
The roles of the directors are important to make sure all of the operations in the company become quality and successful. So, the combined between male and female on the board will get the strong cooperation to lead the company achieve the objective and mission. Each of them has the different characteristic that complements each other to bring the company toward the bright vision.
3.6The Current Issues of Women and Board of Director
Women on board of directors not only a necessity but it is the important thing to enhance the performance of the company. All the rapid country puts the qualified women on the board because their ability, talent, attitude, brilliant and others. In addition, energy and spirit that showed by women on career has many proven on the world stage. Besides that, the reliability of women in the conduct and success the task is very better than men. Take serious the plan and consistent to settle the task is the women’s success key.
So, no wonder if women also have the top placing on board at the reputable company in the world. The Europe regions are emphasized about the involvement women on the board of directors. In the UK, unitary board applied, which means that the board consists of held directorships, executive directorships (EDs) and non-executive directors (NEDs). The executive director works in full-time at the company, with executive roles in the daily running of the business and often promoted from within the company.
Then, the non-executive directors are not full-time employees of the company and are concerned with the corporate governance of the board, sometimes described as ‘critical friends’. The role of the EDs and NEDs also are attending monthly board meetings, engaging in any preparatory work required, plus that of any committees to which they belong. The aspiration is that NEDs will be independent, which means have not been full time employees of the company and they do not have significant shareholdings in the company.
The primary function of both concerned with monitoring performance to enhance shareholder value, strategy development and the allocation of resources, and conflict resolution within the board. The board also includes a number of committees, at a minimum the Audit Committee, the Remuneration Committee and the Nominations Committees, which provide “checks and balances” for board’s activity.
A research was performed in the UK in the top company by Cranfield School of Management. Since 1999, the involvement of women shows the slow and modest progress that has been made over the last 12 years. The table below shows the relation of the type of female position between the years.
| 1999| 2004| 2008| 2009| 2010|
Female held directorships| 6.2 %| 9.4%| 11.7%| 12.2%| 12.5%| Female executive directorships | 2.02%| 4.1%| 4.8%| 5.2%| 5.5%| Female non-executive directors| 10.82%| 13.6%| 14.9%| 15.2%| 15.6%|
Table 1: Relation of the type of female position
Nevertheless, women now occupy just 242 of the 2742 board seats of FTSE 350 companies. Across the 250, the percentage of females held directorships now stand at just 7.8%, which equates to 154 compared to 1812 male directorships. Out of a total of 1,076 FTSE 100 directorships, 323 are executive appointments and 753 non-executive directorships. 941 of these positions are held by men and only 135 are held by 116 women. In addition, 1 in 5 (21%) FTSE 100 companies and over half, 131, (52.4%) of FTSE 250 companies still have no women on their boards.
From the table, we can determine that the participation of the women on the board of directors is still less. But the important thing is the percentage of the involvement is increasing year by year until now. Now, women also can do the same work likes the men even more from that it’s already there. All of the problem can be solved by the hard effort. Talents also can be made by education, training and other ways to make productive women on the board. Hence, all of the companies should take more women to join the board and also keep the women from any discrimination or crimes.
3.6.1International comparison of women on boards
In the world, position women on the board of directors started at the long time ago. Started from the small company until big company, we determined the women on board. The table 2 below shows International Comparison of Woman on Boards on March 2009. The statistical review shows by country, region, sector and market.
Table 2: International Comparison of Woman on Boards
Based on the table, determined that the percentage of participation women on boards around the world is 8.9%. Norway achieves the highest percentage, 35.9 % of women on boards. The lowest achievement is from Morocco, 0% of women on boards. Focus on Asia the percentage is 4.7% and the highest percentage in Asia is from the Philippines, 23%. The lowest percentage is from South Korea, 1%. Malaysia, the percentage of participation is 4.6% of women on boards.
Figure 1: Factor Women under Represented on Board of Directors; High Level Themes (Source: Women on Boards) The graph above shows the causes of women under represented on the board of directors. The source of graph derives from a research in UK in March 2009. Generally, this phenomenon occurs because of many factors whether problem from the company or attitudes. For the example in the UK, attitudes in the workplace and work environment are the top causes it is 30%. The attitude problem was referred with bias, prejudice or stereotypical behavior.
The lowest cause is from compensation or benefits. The other factors are career advancement, promotion, and miscellaneous. All of the factors were contributed to the loss of participation women on boards in term the high level themes. Thus, the result of the research was determined by the variety of respondents. The explanation of collecting data is:- “This was cited by 8% of men and 10% of women. 13% of responses from listed companies cited this as did 28% of respondents from the investment community. A second theme around the work environment was also cited by 30% of respondents.
Other themes that emerged from the responses included career advancement, cited by 22% of respondents due to issues such as too few opportunities for advancement or professional development or a lack of encouragement or support. Finally, 18% of respondents described issues around recruitment, including the likelihood of men recruiting men, or of people recruiting in their own image.”
Figure 2: Factor Women under Represented on Board of Directors; Detailed Themes (Source: Women on Boards)
The graph above shows the detailed themes of causes women under represented on the board of directors. Drilling down at the more detailed level into responses, determined the barriers causing women under represented. The barriers are issues with maintaining work or life balance and the male culture or women have poor networks. The issues with maintaining work or life balance is cause maternity leave. According the graph, the highest barrier is 20% of the issues with maintaining work life balance.
The second highest is 17% of the male culture or women have poor networks. The maternity issues or leave is 12%, traditional bias is 9% and the lack of opportunities and men tend to recruit men are 7%. Both on the graph are explained about the reason of women under represented whether in high level themes or detailed themes. The impacts from this phenomena caused influence the behavior, company performance, brand image, career advancement, employee satisfaction, work environment and miscellaneous.
3.7Impact of Woman in Corporate Board of Director
Female representation in corporate decision making is an important issue for policymakers. For example, the Norwegian government requires that boards of directors of publicly held firms be comprised of at least 40 per cent women, and the Spanish government has committed to 40 per cent by 2015.
Around the world, other countries are considering legislation while developing economies, such as India and China, and Middle East countries (Tunisia and Jordan) are beginning to recognize the importance of developing female talent up to the board level. This shows the importance of having women on the boards. Women can give a different impact than men because they are different from the character of the man. They are easier to work with all parties and be seen better than men.
The impact of women on corporate boards is divided into several aspects of the individual, board, firm, and the environment.
3.7.1Impacts on Individual
The woman was seen as token and minority members. Women and others different to the dominant group are likely to face tokenism when they are the sole representative of their group characteristic. The dominant group tends to see women first as female, embodying the sex role stereotype, and only later as individuals. This makes it difficult for women directors to be heard, and importantly, listened to on an equal basis with other board members. Researchers found that such issues are reduced when there is more than one female director.
They refer to a critical mass, as when there were two or more women and found an impact on male colleagues, who were less likely to dismiss comments made by a woman and an impact in the boardroom, where the culture was said to have been warmer and more open to wider discussions.
The real change occurs when there are three or more women on the board and women feel more comfortable, less constrained about what the men would think, and their interactions become more positive. Importantly, diversity becomes not a “woman’s issue,” but group responsibility and the critical mass normalizes women’s presence as leaders. Besides, women directors are role models who inspire others.
Role modeling differs from mentoring where there is direct contact between partners, but many mentors are also role models. Some women directors are careful about their role modeling behaviors, so they present an accomplished self. Executives below director level, especially women, watch and learn what to do and what not to do. Women directors are an important part of others’ work identity development. Many women workers will make women directors as a source of inspiration for them ahead of others.
3.7.2Impacts on Board
The involvement of more women on the boards will improve governance performance. Three-quarters of boards with women explicitly identify criteria for measuring strategy, compared to less than half of all-male boards, and 94 per cent of boards with three or more women explicitly monitor the implementation of corporate strategy, compared to only two-thirds of all-male boards. There are similar statistics regarding conflict of interest guidelines and ensuring a code of conduct for the organization.
Furthermore, boards with two or more female directors place more importance on the use of search consultants than other boards, which is likely to reduce the influence of the old boys’ network and increase transparency of the selection. Boards with women directors are also more likely to have higher levels of board accountability, with the formal limits of authority and formal director orientation programs. Boards with three or more females are likely to ensure more effective communication among the board and its stakeholders.
In addition, such boards are significantly more active in promoting non-financial performance measures such as customer satisfaction, employee satisfaction, and gender representation, as well as considering measures of innovation and corporate social responsibility. In addition, women directors can enhance the independence of the board. Researcher’s comments that women are likely to take the role seriously, preparing conscientiously for meetings.
Women directors also frequently ask questions, meaning that decisions are less likely to be nodded through. CEOs report that women become more vocal and active as directors when there are three or more females. Besides, better corporate governance is achievable through sharing a broader and a different range of experiences and opinions. Homogenous boards tend not to recognize how similarly members think because these values are the norm for them.
Women have different experiences of the workplace, marketplace, public services and community, and therefore women directors brings a different voice to debates and decision making. Furthermore, women directors contribute unique skills, knowledge, and experience to their boards, but their feminine attributes may be masked in boardroom cultures that do not allow expressive behaviors.
This can lead to the board having female representation, but only masculine behaviors, losing the benefits of diversity. Some CEOs have to persuade female and male directors that it is okay to express intuition and emotion, and that “feminine intuition” about some proposed strategy might well be just what the board needed to hear. While this is an essentialist view of female talents, emotional intelligence of both women and men is increasingly valued at the very top.
3.7.3Impacts on Firm
Many researchers explore the impact of women directors on firm level financial performance, reporting mixed results, although more positive relationships are found in recent studies. There is certainly a relationship between the presence of women directors and higher market capitalization in Fortune 500 and FTSE 100 firms. In the FTSE 100 study, the larger the firm’s market capitalization, the greater the likelihood is for multiple women directors, however market capitalization can be seen as a proxy for size. Firms with women directors are more likely to have larger workforces, as well as larger boards.
The internal talent pool is larger, arguably providing more opportunities for challenge and growth, and more routes to the top for women than in smaller firms. Research studies have used a variety of performance measures to examine the link with board diversity, but results are mixed. A study of 200 Fortune 500 firms finds that the percentage of women on the board (averaging eight per cent in these firms in 1992) is negatively related to firm financial performance (ROE, ROA, ROI, and ROS) measured in 1993, but positively related to the proportion of women in management.
The presence of multiple female directors is associated with higher revenues, according to a study of the Fortune 500 firms, where the top 100 companies by revenue are twice as likely to have multiple women on board compared to the bottom 100 companies. Catalyst reports a positive link between gender diversity on boards and the bottom line as measured by return on investment and total return to shareholders in a sample of 353 Fortune 500 companies, with ROI is 35 per cent and TRS being 34 per cent higher in the group of firms with higher female representation in the top management team.
3.7.4Impacts on Environment
Women give impacts on the environment in term of citizens, talent and symbols in the media. Women’s presence as directors signifies that women play a full part as citizens of organizations and society. However, for them to have voice as citizens, the environment needs to be open to their influence, and in the past, the women who succeeded were pioneers or “travelers in a male world”.
More recently the trend is for “superwomen”: highly paid, working all hours, and flying around the globe. But for many, that comes at a personal cost, either not having children or outsourcing childcare. Besides, women directors are part of the talent pool for other directorships.
Executive directors may seek their first non-executive post, or plan to move into a portfolio career with several non-executive director (NED) positions. As part of the talent pool, women influence perceptions held by search consultants about the appropriateness of women for board appointments. They also influence and normalize the attitudes of chairs and CEOs that women should be part of the talent pool at all levels.
3.8Woman on Corporate Board of Director: An Issue of Malaysian Corporate Governance Perspective Over the past decades, women’s participation in the business corporate has increased and representations of women on the boards of the Malaysian corporation are improved every year. But the number of women directors in Malaysia is still relatively low, with only 7.59% of women sitting on the boards of the companies and only 48 companies had women directors in 2010.
In Malaysia, the government plays a significant role to ensure that the women are not left out in the business corporate field. The Malaysian government is striving to increase the percentage of women involve in the boardroom of the organization. Malaysia is one of the countries that acknowledge and appreciate the efforts and contribution of women in the economic sector.
The establishment of the NAM Institute for the Empowerment of Women (NIEW) is an example of the effort by the women to involve in Malaysian development and growth in every sector. This institute also creates Women Director Management System (WDMS) which this system is designed to enable and support the Women Directors Program Frameworks that has three modules, namely Registry, Sourcing and Reporting.
The Registry Module| This module contains profiles of women with potential board director qualifications. Registration is open to professional women in Malaysia who are interested to serve on boards of publicly-listed companies.| The Sourcing Module| This module supports public-listed companies in the search and selection process for qualified women directors for their boards.
These companies will be able to source for qualified women candidates by submitting their request through the system.| The Reporting Module| This module provides management reports across the Registry and Sourcing modules. It has the capability to provide reports that will track the progress and achievement of the Key Performance Indicators of the Women Directors Program.|
Table 1: The module of Women Directors Programme Frameworks
Based on the research of women participation number of boards of directors in Malaysian corporation, women serving on a sample of 28 listed companies is 6.3%, women directors on a sample of the 100 largest domestic companies by market capitalization is 7.8%.
Then, Bank Negara confirms that only 45 women or 6% were appointed as board members of financial institution as of April 2011, and 7% in insurance sector. According to a Central Bank of Malaysia analysis, only 91 women or 13% served as members of the board of directors of the board in 2010 in government-linked companies (GLC). Moreover, women accounted for 7.6% of board members representing the 200 companies listed on the Malaysian Stock Exchange in November 2010.
This research shows that the participation of women corporate board of directors in Malaysia is still relatively low even though the number indicates a small improvement in percentage of female directorship in Malaysia. On 27 June 2011, the policy that women must comprise at least 30% in decision-making positions in the corporate sector had been approved by the Cabinet and was announced by Malaysian Prime Minister, Datuk Seri Najib Tun Razak.
The organization or the company had been given five years to meet the requirement of the policy. The purpose of the establishment of this policy is to promote and action towards gender equality issue in the corporate sector. He also mentioned that the decision made by the Cabinet is not only for support towards women’s role and success, but it also encourages them to move further ahead in their career.
He added that the five year timeline was seen as reasonable and his hope that the private sector will see this matter as a proactive measure to further strengthen the companies’ structure and future performance. Another efforts show by the Malaysian government is by formulating training programmers to the potential women for board of directors’ job. Malaysia Finance Ministry with the cooperation of Khazanah Nasional Berhad, Malaysian Alliance of Corporate Directors and Malaysian Directors Academy will formulate and provide a training program to prepare those with potential and ability for the board of directors’ job.
The role and responsibility of the government to strive in order to highlight women’s involvement in Malaysia corporate environment is very significant, so that women also can equally contribute to nation building and bring the diversity which is women can enrich the way decisions are made at the boardroom level because they think and behave differently from men.
Women play an important role in corporate boards of directors. The evidence shows that gender diversity on corporate boards contributes to more effective corporate governance through a variety of board processes, some of which do not show up as a direct influence on the firm’s bottom line, as well as through individual interactions. As well as governance outcomes, women directors contribute to important firm level outcomes as they play direct roles as leaders, mentors, and network members as well as indirect roles as symbols of opportunity for other women, and inspire them to achieve and stay with their firm.
More recognition is needed for their valuable contribution to firm value. But as the woman on corporate boards (WOCB) demographics indicate, as corporate citizens most women do not yet have an equitable share in the governance of the firms in which they enact their careers. To ensure that every organization achieve a steady and impressive performance, participation of both genders in the boards is the priority. This is because the consolidation between men and women in decision-making will have a good impact because both have different talents.
To make it happen, the government should take the initiative to put a minimum quota of women’s involvement in the boards to each organization so that it is seen more equality in order to achieve the company’s goals.
Adams, B.R. & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance, Journal of Financial Economics, pp. 292. Adams R, Hermalin B. E, Weisbach M. S. The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey. Arguden, Y. (2012). Harvard Business Review Blog Network, Why Boards Need More Women, http://blogs.hbr.org/cs/2012/06/why_boards_need_more_women.html Australian Institute of Company Directors.
Director Resource Centre, Statistic, Appointments to ASX 200 Boards, http://www.companydirectors.com.au/Director-Resource-Centre/Governance-and-Director-Issues/Board-Diversity/Statistics Balan, S. (2011). Reform of The Law Relating to Director’s Duties in Malaysia, Vol. 4 pp. 3 Balan S. (2011)Reform of The Law Relating to Director’s Duties in Malaysia, Vol. 4 pp. 4 Balan S. (2011)Reform of The Law Relating to Director’s Duties in Malaysia, Vol. 4 pp. 5 Balan S. (2011)Reform of The Law Relating to Director’s Duties in Malaysia, Vol. 4 pp. 8
Bilimoria, D. (2000). Building the business case for women corporate directors. Boland M., Hofsman D. (2013). Iowa State University. The Role of the Board of Directors. Retrieved June 16, 2013, from https://www.extension.iastate.edu/agdm/wholefarm/html/c5-71.html
Bradshaw, P. & Wicks, D. (2000). The experience of white women on corporate boards in Canada: Compliance and non-compliance to hegemonic masculinity. Branson, D.M. (2012). Initiatives to Place Women on Corporate Boards of Directors – A Global Snapshot, Why Women? The Journal of Corporation Law, Vol. 37:4, pp. 795. Brown, D., and Anastasopoulos, V. (2002) Women on Boards: Not just the Right Thing . . . But the “Bright” Thing, Report,. 341-02: The Conference Board of Canada, Ottawa.
Burgess, Z. & Tharenou, P. (2002). Women Board Directors: Characteristics of a Few, How an organization can help with the appointment of more women directors? Journal of Business Ethics,Vol. 37, pp. 42. Burke, R. (2000) Company size, board size, and the numbers of women corporate directors. Catalyst, (2004). The Bottom Line; Connecting Corporate Performance and Gender Diversity, Catalyst, New York. Davies, L. et al. (2011). Women on
Boards, pp. 8
De Anca, C. (2008) Women on corporate boards of directors in Spanish listed companies. Deloitte, (2011). Women in the Boardroom: A Global Perspective, Malaysia Country Profile. Eagly, A. H. & Johannesen-Schmidt, M. C. (2001). The leadership styles of women and men. Journal of Social Issues, 57: 781–797. Eagly, A. H. & Johnson, B. T. (1990). Gender and leadership style: A meta-analysis. Psychological Bulletin, 108: 233–256. Eagly, A. H., Johannesen-Schmidt, M. C., & van Engen, M. L. (2003).
Transformational, transactional, and laissez-faire leadership styles: A meta-analysis comparing women and men. Eagly, A. H., Karau, S. J., & Makhijani, M. G. (1995). Gender and the effectiveness of leaders: A meta-analysis. Psychological Bulletin, 117: 125–145. EduCause. (2013). Board Member Responsibilities. Retrieved June 15, 2013, from http://www.educause.edu/about/mission-and-organization/educause-board-directors/board-member-responsibilities
Epstein, M.J. & Roy, M.J (2006). ‘Measuring the Effectiveness of Corporate Boards and Directors’ in M. J. Epstein and K. O. Hanson (Eds.), The Accoutable Corporation, Praeger Publishers, Wetport, US. Erkut, S., Kramer, V. W. and Konrad, A. M. (2008), Critical mass: Does the number of women on a corporate board make a difference? Fondas, N. and S. Sassalos (2000), “A Different Voice in the Boardroom: How the Presence of Women Directors Affects Board.
Influence over Management,” Global Focus , 12: 13-22. Gerald & Kathleen Hill, (2004). Board of Director, Legal Dictionary, http://legal-dictionary.thefreedictionary.com/board+of+directors. Gist, M. E., Locke, E. A., & Taylor, M. S. (1987). Organizational Behavior: Group structure, process, and effectiveness. Journal of Management, 13: 237–257. Groysberg, B. & Bell, D. (2012). Board of Directors Survey, Board Diversity, pp. 3. Hoel, M. (2008)
The quota story: Five years of change in Norway. Huse, M. (1998). How Women Directors Challenge Existing Theories of Boards of Directors. Paper presented at the Academy of Management Conference, San Diego, CA. Ibarra, H:1993, Personal Network.
Izraeli, D. (2000) Women directors in Israel. In: Burke, R. and Mattis, M. (eds.) Women on Corporate Boards of Directors: International Challenges and Opportunities, 75–96. Kluwer Academic Publishers, Dordrecht, The Netherlands. Huse, M. Julia, T. (2013) Women make better decisions than men: How do people make decisions? http://www.degroote.mcmaster.ca/articles/women-make-better-decisions-than-men. Klausner, Michael, Bernard S. Black, and Brian R. Cheffins. (2005) “Outside Directors Liability: Have WorldCom and Enron Changed the Rules?,” Stanford Lawyer, Winter, (71), 36–39. Kramer, V.W., Konrad, A.N., & Erkut, S. (2006).
Critical Mass on Corporate Boards: Why Three or More Women Enhance Governance, Women Director in Corporate Governance, pp. 2. Malaysian Alliance of Corporate Directors (MACD). 30% of Corporate Decision-Makers Must Be Women, http://www.macd.org.my/
Malin C. A. (2009). Corporate Governance: Directors and Board Structure, pp. 164. Marshall, J. (1984) Women Managers: Travellers in a Male World, Wiley, Chichester. Mattis, M.C. (2000). Women Corporate Directors in United States, Women on Corporate Board of Directors (Kluwer Academic Publishers, The Netherlands). In Burgess, Z. & Tharenou, P. (2002) McQueen, G. (2013). Why women make better directors. International Journal of Business Governance and Ethics, 2013; 8 (1): 93 DOI:10.1504/IJBGE.2013.052743 McQueen. NAM Institute for the Empowerment of Women (NIEW). Women Director Management System (WDMS),
http://www.niew.gov.my/index.php?option=com_content&view=frontpage&Itemid=312&lang=en Nguyen, L. (2013). Women on Corporate Boards Better Decision-Makers than Male Directors: Study, Executive women, Canadian Press, http://business.financialpost.com/2013/03/25/women-on-corporate-boards-better-decision-makers-than-male-directors-study/ Regal (Hastings) Ltd v Gulliver  2 AC 134
Say, T.L. & Lee, L. (2011). Grooming more women on the board, Case for change, thestaronline, http://biz.thestar.com.my/news/story.asp?file=/2011/11/19/business/9902529 Sealy. R. & Doherty. N., (2012). Women in finance: a springboard to corporate board positions? pp.10. Sealy, R. and Singh, V. (2006) Role models, work identity, and senior women’s career progression – Why are role models important? Best Papers Proceedings of Academy of Management Annual Meeting, Atlanta, GA.
Sheridan, A. and Milgate, G. (2005) Accessing board positions: A comparison of female and male board members’ views, Corporate Governance: An International Review, 13(6): 847–55. Singh, V. (2008) Transforming Boardroom Cultures, Report for UK Resource Centre for Women in Science, Engineering and Technology, Bradford. Smolkin, S. (2013) Personal Finance: Why woman top men on boards of directors, http://www.thestar.com/business/personal_finance/2013/05/22/why_woman_top_men_on_boards_of_directors.html Tacheva, S. & Huse, M. (2006). Women Directors and Board Task Performance: Mediating and Moderating Effects of Board Working Style, pp. 3. TCAM, (2009). Diversity and Gender Balance in Britain, a study by TCAM in conjunction with The Observer and as part of the Good Companies Guide, London, UK: TCAM. TD Economic, (2013).
Get on Board Corporate Canada, Greater Transparency needed for gender diversity on Canadian Board, Factor behind Canada performance, pp.3. Terjesen, S., Sealy, R. & Singh, V. (2009) Women Directors on Corporate Board: A Review and Research Agenda, On Board Skills, Knowledge and Experience, An International Review, Vol. 17, No. 3, pp. 329 The Somali Family Care Network. Boards of Directors: Functions, Roles and Responsibilities The Star.
Personal Finance: Why Woman Top Men on Boards of Directors. Retrieved June 12, 2013, from http://www.thestar.com/business/personal_finance/2013/05/22/why_woman_top_men_on_boards_of_directors.html Torchia, M., Calabro, A., & Huse, M. (2011). Women Directors on Corporate Boards: From Tokenism to Critical Mass, Journal of Business Ethics, Vol. 102, pp. 299. Women Corporate Directors (WCD). About WCD,
Women Mean Business, Raconteur Media, November 30 2010.
Yukl, G. 2002. Leadership in Organizations. Upper Saddle River, NJ: Prentice Hall. Zelechowski, D. and Bilimoria, D. (2004) Characteristics of women and men corporate inside directors in the US, Corporate Governance: An International Review, 12(3): 337–42
[ 1 ]. http://www.thestar.com/business/personal_finance/2013/05/22/why_woman_top_men_on_boards_of_directors.html [ 2 ]. Deloitte, (2011). Women in the Boardroom: A Global Perspective, Malaysia Country Profile. [ 3 ]. Malin, C. A. (2009). Corporate Governance: Directors and Board Structure, pp. 164. [ 4 ]. Epstein, M.J. & Roy, M.J. (2006), ‘Measuring the Effectiveness of Corporate Boads and Directors’, in M. J. Epstein and K. O. Hanson (eds.), The Accoutable Corporation, Praeger Publishers, Wetport, US. [ 5 ]. Gerald H. & Kathleen H., (2004).
Board of Director, Legal Dictionary, http://legal-dictionary.thefreedictionary.com/board+of+directors. [ 6 ]. Sealy, R. & Doherty, N. (2012). Women in Finance: A Springboard to Corporate Board Positions? pp.10. [ 7 ]. Klausner, Michael, Bernard S. Black, and Brian R. Cheffins. (2005) “Outside Directors Liability: Have WorldCom and Enron Changed the Rules?,” Stanford Lawyer, Winter, (71), 36–39. [ 8 ]. The Somali Family Care Network. Boards of Directors: Functions, Roles and Responsibilities. [ 9 ]. Adams R, Hermalin B. E, Weisbach M. S.
The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey. [ 10 ]. https://www.extension.iastate.edu/agdm/wholefarm/html/c5-71.html [ 11 ]. http://www.educause.edu/about/mission-and-organization/educause-board-directors/board-member-responsibilities [ 12 ]. Balan, S. (2011). Reform of The Law Relating to Director’s Duties in Malaysia, Vol. 4 pp. 3 [ 13 ]. Balan S. (2011)Reform of The Law Relating to Director’s Duties in Malaysia, Vol. 4 pp. 4 [ 14 ]. Regal (Hastings) Ltd v Gulliver  2 AC 134.
[ 15 ]. Balan S. (2011)Reform of The Law Relating to Director’s Duties in Malaysia, Vol. 4 pp. 5 [ 16 ]. Balan S. (2011)Reform of The Law Relating to Director’s Duties in Malaysia, Vol. 4 pp. 8 [ 17 ]. Bilimoria, D. (2000). Building the business case for women corporate directors. [ 18 ]. Bradshaw, P. & Wicks, D. (2000).
The experience of white women on corporate boards in Canada: Compliance and non-compliance to hegemonic masculinity. [ 19 ]. Gist, M. E., Locke, E. A., & Taylor, M. S. (1987). Organizational Behavior: Group structure, process, and effectiveness. Journal of Management, 13: 237–257. [ 20 ]. Eagly, A. H., Karau, S. J., & Makhijani, M. G. (1995).
Gender and the effectiveness of leaders: A meta-analysis. Psychological Bulletin, 117: 125–145. [ 21 ]. Eagly, A. H. & Johannesen-Schmidt, M. C. (2001). The leadership styles of women and men. Journal of Social Issues, 57: 781–797. [ 22 ]. Eagly, A. H. & Johnson, B. T. (1990). Gender and leadership style: A meta-analysis. Psychological Bulletin, 108: 233–256. [ 23 ].
Eagly, A. H., Johannesen-Schmidt, M. C., & van Engen, M. L. (2003). Transformational, transactional, and laissez-faire leadership styles: A meta-analysis comparing women and men. [ 24 ]. Yukl, G. (2002). Leadership in Organizations. Upper Saddle River, NJ: Prentice Hall. [ 25 ]. Kramer, V.W., Konrad, A.N., & Erkut, S. (2006). Critical Mass on Corporate Boards: Why Three or More Women Enhance
Governance, Women Director in Corporate Governance, pp. 2. [ 26 ]. Burgess, Z. & Tharenou, P. (2002). Women Board Directors: Characteristics of a Few, How organization can help with the appointment of more women directors? Journal of Business Ethics,Vol. 37, pp. 42. [ 27 ]. Mattis, M.C. (2000). Women Corporate Directors in United States, Women on Corporate Board of Directors (Kluwer Academic Publishers, The Netherlands). In Burgess, Z. & Tharenou, P. (2002) [ 28 ]. Adams, B.R. & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance, Journal of Financial Economics, pp. 292. [ 29 ].
Mattis, M.C. (2000). Women Corporate Directors in United States, Women on Corporate Board of Directors (Kluwer Academic Publishers, The Netherlands). In Burgess, Z. & Tharenou, P. (2002) [ 30 ]. Terjesen, S., Sealy, R. & Singh, V. (2009) Women Directors on Corporate Board: A Review and Research Agenda, On Board Skills, Knowledge and Experience, An International Review, Vol. 17, No. 3, pp. 329 [ 31 ]. Huse, M. (1998). How Women Directors Challenge Existing Theories of Boards of Directors. Paper presented at the Academy of Management Conference, San Diego, CA. Ibarra, H:1993, Personal Network. [ 32 ]. Torchia, M., Calabro, A., & Huse, M. (2011).
Women Directors on Corporate Boards: From Tokenism to Critical Mass, Journal of Business Ethics, Vol. 102, pp. 299. [ 33 ]. Mattis, M.C. (2000). Women Corporate Directors in United States, Women on Corporate Board of Directors (Kluwer Academic Publishers, The Netherlands). In Burgess, Z. & Tharenou, P. (2002) [ 34 ]. Groysberg, B. & Bell, D. (2012). Board of Directors Survey, Board Diversity, pp. 3. [ 35 ]. Women Corporate Directors (WCD). About WCD, http://www.womencorporatedirectors.com/ [ 36 ]. Australian Institute of
View as multi-pages