People wearing face masks, amid concerns over the spread of the COVID-19 coronavirus, cross a street next to commercial buildings in Kuala Lumpur on March 16, 2020.
(SYAIFUL REDZUAN / AFP)

Malaysia’s publicly traded firms must have at least one woman director on their boards from next year, as the government seeks to ensure more female oversight in the running of companies in the Southeast Asian nation.

The proposal will take effect from Sept. 1, 2022, for large capital companies and June 1, 2023 for other listed firms, Finance Minister Zafrul Abdul Aziz said on Friday as he delivered the nation’s spending plan for next year.

The move is aimed at “recognizing the role of women in the decision-making process and strengthening leadership as well the effectiveness of the board of directors,” Malaysian Finance Minister Zafrul Abdul Aziz said

Tengku Zafrul Abdul Aziz, chief executive officer of CIMB Group Holdings Bhd., speaks during a Bloomberg Television interview at the New Dawn Investors' Conference in Kuala Lumpur, Malaysia, on Tuesday, Oct. 9, 2018. Tengku Zafrul said he is seeing a pickup in Malaysia's bond pipeline.

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The move is aimed at “recognizing the role of women in the decision-making process and strengthening leadership as well the effectiveness of the board of directors,” Zafrul said. “The contribution of women to the economy has never been in dispute, and should in fact be further reinforced.”

Governments, political parties and executive groups the world over are pushing for more women to be appointed to boards as studies show that companies with diverse boards make better decisions, among other benefits.

Still, the government’s latest effort fell short of some women’s groups’ expectations. 

“While we appreciate the fact that the government has recognized that there is a lack of women representation in decision-making positions in companies, the requirement of only one female director could be improved upon,” said Nisha Sabanayagam, executive director of All Women’s Action Society, or AWAM, a non-profit organization. The government should have set a target of 30 percent women representation instead, she said. 

“Gender diversity does not mean having the token female so that you can tick a box, but rather understanding that having a balanced gender composition can ultimately contribute to more creativity and innovation,” she said.

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Karen Lai, program director of Women’s Centre for Change, called on the government to also increase the representation of women in its administration, the Star reported on Saturday. There are only nine women ministers in Prime Minister Ismail Sabri Yaakob’s cabinet of 70 people.

Parliament and state assemblies are “lagging behind and that directly impacts citizens,” the newspaper cited her as saying. 

While women make up about 25 percent of the board composition of 100 major public companies in Malaysia, there are 252 firms — 27 percent of those listed on the Bursa exchange — that don’t have female board membership, Zafrul said.