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Advancing up the business ladder: more women on boards

More women than ever before serve as their firms’ directors or highest-ranking executives, indicating that Thai public companies have made strides in promoting gender diversity in the boardroom and at all levels of management.

As diversity is thought to contribute to improved decision-making and outcomes, the number of women serving on corporate boards is rising worldwide. Despite some doubts regarding the advantages of their presence, the majority of lawmakers and company owners support Sustainable Development Goal 5 of the United Nations: Achieve gender equality and empower all women and girls to contribute to making the world a better place.

By requiring the appointment of at least one woman to their boards, many Thai corporations fulfill their role in this initiative. 87.3% of 731 businesses have at least one female director on their boards by the end of 2020, according to data conducted by the Stock Exchange of Thailand. Comparatively, women had at least one board position in 79.4% of locally listed businesses in 2015.

The Securities and Exchange Commission (SEC) plans to expand female participation on corporate boards to at least 30 percent this year, first for 30 percent of all listed businesses. As a result, listed companies with no female directors on their boards may need to intensify their efforts.

Soon, all organizations will be subject to this obligation.

Due to the reasonableness of the SEC’s goals, it was discovered that by the end of 2020, 24 percent of all publicly traded businesses have more than 30 percent female representation on their boards. These corporations have appointed 1,224 female directors, or 22.23 percent of the total 5,506 directors. The ratio rose slightly from 22.09 percent at the end of 2019 to 22.13 percent. Some female directors served multiple companies, as they occupied 1,475 director seats, or 21.02 percent of a total of 7,017 director seats, compared to 20.72 percent in the previous year.

In addition, several women have been appointed as “independent directors.” 56.2 percent of all publicly traded businesses had at least one female independent director at the end of 2020, up from 47.8 percent in 2015, and 57 companies, or 8.4 percent, were led by women by the end of 2020, compared to 47 companies, or 6.8 percent, a year earlier. 13.8 percent of the chief executives of 101 organizations were women in 2020, a result that was even more significant.

Diversity among men and women in business boardrooms and top positions is a global phenomena. Some nations enforce a quota system in order to boost the number of women in leadership positions. It is thought that the quota would have positive externalities because female leaders will serve as role models, inspire others, and encourage more women to seek education, employment, and leadership potential.

In addition, gender parity will foster an inclusive workplace culture, provide businesses with access to a larger talent pool, and ultimately increase the bottom line.

The article is based on SET Note Vol. 3/2022: Female Directors on Boards.

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march, 2024