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SINGAPORE-LISTED companies have improved in board diversity over the past five years on most fronts – such as age and gender mix – but not in cultural background and global experience, based on an index released on Monday (Jan 20).

In the 2025 Singapore Board Diversity Index, which assessed 553 companies with a primary listing on the Singapore Exchange (SGX), there were improvements in the percentage of companies that met six of its eight diversity markers, as compared to the inaugural version of the index launched in 2020.

These six markers with improvments are: age, gender, industry experience, domain expertise, board independence and the tenure of directors.

The index was developed by global advisory WTW in partnership with the Singapore Institute of Directors (SID) and the Singapore campus of James Cook University.

Besides large-cap, mid-cap and small-cap companies, the categories include real estate investment trusts and business trusts, and those on the Catalist junior bourse. The index analysed their boards as at Sep 30, 2024.

Gender diversity was one key area of improvement, with a doubling in the proportion of companies that met the criteria from 8 per cent in 2020 to 17 per cent in this year’s index.

The mix of old and new directors also improved. In 2020’s index, only 13 per cent of companies had a standard deviation in their directors’ tenures of between 3.5 and 5.5 years. This proportion improved to 17 per cent in this year’s index.

“Over the past few years, companies seem to have placed stronger emphasis on gender diversity, multi-disciplinary domain expertise and experience across diverse industries,” said Shai Ganu, WTW’s managing director and global practice leader for executive compensation and board advisory.

SGX’s move to cap independent directors’ tenure at nine years also “seems to have helped improve diversity on Singapore boards, which is heartening to see”, he said.

Room for improvement

However, the proportion of companies that met the diversity requirement for cultural background and international experience had slight decreases – by four percentage points and three percentage points, respectively.

The criteria for cultural diversity is that 33 per cent or more directors are non-Chinese. Only 14 per cent of companies met this threshold, down from 18 per cent in the 2020 index.

Likewise, only 12 per cent of companies met the criteria that 80 per cent or more directors have international experience. This was down from 15 per cent in the 2020 index.

Of the 553 companies, only 43 or about 7.8 per cent of them met the diversity standards across four or more categories. These companies included CapitaLand Investment, AEM and Far East Hospitality Trust.

SID chief executive Terence Quek said the findings “show both our progress and the challenges that remain” in board diversity.

Ganu likewise noted that “there is still room for improvement, particularly for small-cap and Catalist companies”.

“While companies should continue being deliberate in skills-based board nominations, they will be well-served by also creating an inclusive culture, where diverse opinions are allowed to thrive, which in turn can enhance quality of decision-making,” he said.

SGX RegCo chief executive Tan Boon Gin, who spoke at a panel discussion at WTW’s office on Monday, noted that “diversity outcomes are one of the most difficult things to regulate for”, as the matter is highly company-specific.

“The regulator is not really in the best position to be the one to say this is the ideal diversity mix for this company. Actually, it is the nominating committee which is in the best position,” he said, referencing the committee that takes charge of sourcing board members.

Instead of prescribing diversity quotas, SGX RegCo has opted for the nine-year tenure cap and requires companies to disclose their diversity policies and targets.

“We are creating space for new directors, and we are requiring companies to explain how these new directors are contributing to diversity. So we think that that is a much more enduring way of getting the right diversity mix,” said Tan.