Najib: Diversity good for business and nation

Najib: Diversity good for business and nation

KUALA LUMPUR - All listed companies will be required to establish and disclose in their annual report their diversity policies to ensure better age, gender and ethnic repre sentation at the board and management levels.

Prime Minister Datuk Seri Najib Razak said diversity at work is good for business and good for the nation.

"I strongly believe diversity is Malaysia's source of strength, Malaysia's market differentiator," he said in bhis speech before a closed- door dialogue with the corporate sector organised by the Economic Planning Unit (EPU) and the Securities Commission Malaysia (SC) here yesterday.

Currently, listed companies are only required to disclose in the annual reports their gender diversity policies, par ticularly in the context of board selection.

Globally, companies that establish diversity policies have been able to attract and retain investment from a wider range of sources.

"Around the world, sovereign wealth and pension funds have spearheaded the sustainability agenda by choosing more and more to invest in sustainable companies and instruments as these investments not only expand the di versity but also provide financial as well as social returns," Najib said.

"(If) well managed, diversity drives performance and strengthens governance. Hence, like sustainability, diversity at work is good for business and good for the nation," he added.

The closed-door event was attended by 50 corporate leaders representing the country's leading public listed companies (PLCs) and government-linked investment com panies (GLICs).

Citing TalentCorp-PwC's Diversity in the Workplace Survey (2013) released yesterday, the Prime Minister said Malaysia had made good progress in achieving the overall diversity of the workforce, but greater efforts were needed at the leadership and top management levels.

Najib said Malaysia's female labour force participation rate had increased from 49.5 per cent to 52.4 per cent for 2013, putting the country very much on track to achieve the target of 55 per cent by 2015.

Although female participation in the workforce has risen, women representation in top management is still lacking.

"There is a need for greater efforts to improve diversity at top management, with a representation of only 24 per cent women, 18 per cent aged 40 year old and below, and only 34 per cent Bumiputra," he said.

In comparison, the public sector has exceeded its policy target of 30 per cent, with women now comprising 33 per cent of top positions.

The same survey suggests that overall diversity is com mendable, but greater efforts are needed to address low diversity especially at the top management level.

According to the survey, Chinese make up the majority of the total workforce at top management of listed companies with 54 per cent, the Bumiputeras 34 per cent while the remaining 12 per cent are represented by Indians and the others.

On the overall ethnic composition, the Bumiputeras make up the majority of the total workforce with 66 per cent, Chinese 17 per cent, Indians seven per cent, while the others make up the remaining 10 per cent.

"The government is committed towards further enhancing diversity in the public sector, particularly in terms of the representation of women and non-Bumiputeras, in lead ership positions," he said.

"However, the agenda of inclusiveness is beyond just the government, it is a national agenda to be championed by all. I therefore look to leading listed companies to show lead ership in championing inclusiveness, especially in promoting greater diversity in the management levels of corporate Malaysia, to better reflect the demographics of Malaysia's population.

Najib said during the 2014 Budget presentation, he an nounced that ValueCap will allocate RM1 billion for sus tainable and responsible investing.

In due course, he said the government related funds will emulate, in terms of providing a greater focus on sus tainability for investments.

"This is to ensure that the government helps catalyse and support efforts by leading Malaysian corporates to embrace the objectives of the New Economic Model of sustainability and inclusiveness," he said.

In order to accelerate the pace of sustainable and re sponsvie investments, the Prime Minister said the financial industry's role can be expanded to provide a facilitative ecosystem.

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