Vote of no-confidence a wake-up call for old boys' club in boardrooms

THE need for gender diversity in the boardroom has been debated for years, with advocates citing multiple studies that have outlined benefits such as better risk-adjusted returns. Yet, many corporate boards remain by far predominantly, if not solely, male.

But they may not be able to hide in their old boys' club for much longer. Global stewards of investor assets are using their voices and votes to advocate for more women on boards. Today, a third of the world's 30 largest asset managers have a public policy on gender diversity on boards. More are extending such voting guidelines to Singapore and Hong Kong, two of the most developed financial markets in the region they have exposure to.

Last week, State Street Global Advisors - which serves governments, institutions and financial advisors around the world and is the world's third largest asset manager with nearly US$3.12 trillion under its charge - identified six companies on the benchmark Straits Times Index that it has interest in but which do not have female board directors. These companies will be given time to diversify their boards. If not, starting this year, State Street will vote against that one director or person most responsible for the nomination process. After three years, if these companies still have not added a woman to their board, it will be voting against the full nominating committee.