Corporate Board Diversity and Why It Matters
Home to more than 31 million people, Malaysia is known for its rich and diverse culture. In Malaysia’s corporate scene, diversity in the workplace is somewhat achieved. However, it is far from living its full potential. Diversity, in the context of a workplace, refers to a wide range of employees or staff of a different race, religion, gender, status, ethnicity, abilities, cultural background, sexual orientation, etc., in the place of work. The idea of corporate board diversity is an old adage. Nonetheless, it is still a hotly debated topic until today. And rightly so.
To date, Malaysia has drafted many laws to regulate diversity in the nation. One of them is Article 8 (1) of the Federal Constitution of Malaysia, which states that every person shall be equal under the law and have equal protection of the law. Despite having regulations to cultivate gender and nationality diversity, some companies still lack proper presentation. A survey conducted in 2016 has found that more than 50% of women in Malaysia felt underrepresented in leadership roles. Another research regarding races identified that preferential bias is still rampant, especially in the private sector.
Why is Corporate Board Diversity in Malaysia Important?
People from various backgrounds and characteristics coming together to work as a team is imperative to the growth of a company. Here’s why corporate board diversity in Malaysia matters:
Representation matters to underrepresented minorities because it gives them a voice and the courage that they too can succeed with their talents and qualities. It shapes the onlookers’ minds, be it investors, students, interns, or children. All of them who see a corporate board being diverse will be inspired and know that no matter where they come from, opportunities will not be denied. Plus, inclusivity brings in a new array of skills, abilities, and experiences that makes the team well rounded.
Better Decision Making
Past studies have shown a direct link between workplace diversity and decision-making. In a board, having diverse representatives allows new ideas to be pitched in from many perspectives and experiences. This leads to immense insight. Consequently, this enables a corporate board to take calculated risks and better, informed decisions.
Higher Employee Retention
Corporate diversity leads to lower turnover. Diversity makes people from all walks of life feel relevant and welcomed. If a newly joined staff were to join a homogenous crowd, he or she can’t help but feel alienated, as opposed to joining a diversified team. Having diversity is a crucial factor in making employees feel comfortable and valued in their work environment. When employees feel their workspace has a sense of belonging, they will be less likely to leave the company. As a result, employee engagement increases, and the turnover rate decreases.
Wider Talent Pool
Welcoming diversity on board attracts an influx of quality variety. When a company is open to qualified people of all backgrounds, they will have an extensive candidate pool to choose from. On the other hand, studies have suggested that job seekers are more likely to apply to companies with diverse employees. This is a win-win scenario for both job-hunters and employers.
Empowering Marginalised Workers
There are still many employees out there who are held back due to racism, sexism, ageism, and so on. Women, people of colour, ethnic minorities, and people with physical abilities experience daily discrimination in their workplace. As a result, they rarely get the same pay as others of privilege. Combating discrimination can be achieved by corporate workplaces when they choose to hire staff based on work ethics and credibility. This not only gives everyone an equal chance; it also shows that prejudice incorporates places will not be overlooked much less tolerated.
The Bottom Line
Corporate diversity in Malaysia has come a long way; however, there is still much to go. We, at 3E Accounting, strongly believe that everyone, regardless of their race or colour, age, sex, background and socioeconomic status, deserves an equal opportunity. That’s why our team works hard to help companies everywhere achieve a diverse equilibrium. 3E Accounting offers Nominee Director Services to help you find credible, competent nominee directors at a cost-effective rate.