The world’s economy is facing incremental risks of stagnation, rapid and severe climate change, cyber threat, COVID-19 impact, mass protest, war, political and economic stabilities.   Such challenges have continued to affect the business sector and caused the Board structure in the past decade to emphasize more on diversity.  We are starting to witness benefits of having Board diversity in responding to ongoing challenges.  One key issue that has largely been discussed over the years is gender diversity of the Chairman.  Agencies responsible for corporate governance evaluation have issued guidance in promoting female’s roles in global, regional, and corporate levels.

Back in 2020, the Board in FTSE100 companies consisted of 25% female directors.  However, full commitment to drive gender diversity in the Chairman’s position is still needed to reflect the Board diversity.  The latest research from INSEAD 2022 indicated the necessity to accelerate the drive for Chairwoman appointment toward 35% target by 2025 and 50% target by 2027.  There are several interest groups that support and keen to promote women to assume the roles of Chairwoman, executive director, and non-executive director.  They include Women on Boards Network, IWF (International Women's Forum), MACA (Men as Change) representative) CBI, IOD, 30% Club etc.

In Thailand, there have been concrete attempts to drive gender diversity.  For instance, each listed company is encouraged to have at least one female director. The Securities and Exchange Commission (SEC) has promoted greater female roles in the Board, setting a goal for this year to drive 30% of listed companies to have at least 30% female directors in their Boards.  Over the past 2-3 years, Thai women have continuously increased their roles as directors and leadership in listed companies.  The Stock Exchange of Thailand (SET) has also encouraged gender diversity for both “Chairman” and “top executive” positions of listed companies.  According to a study on Board structure of 731 listed firms, number of Chairwoman as of end-2020 rose to 57, or 8.4% of total, from 47, or 6.9% of total, at the end of 2019.

To accommodate greater number of Chairwoman in the future, it is essential to educate Nomination Committee about the significance of gender neutrality in drafting job descriptions and that this matter should be emphasized along with thorough examination of skills, knowledges, and competencies to ensure the Chairperson and the Board can work together with utmost efficiency.  More importantly, there should also be a process to provide support and guidance in developing appropriate nomination process.

In an article “The Chair of the Future Toward 2025”, global corporate management consultant Korn Ferry mentioned necessary characters of future Chairman.  It said any Chairperson, regardless of gender, is required to have the following characters to lead the organization through ongoing challenges, work effectively with the Board, and gear toward sustainable growth. 

1.    Resilience – is needed for the leadership of Chairman.

2.    Agility – must grow and make decisive decision in more ambiguous environment.

3.    High Emotional Intelligence – ability to comprehend with various aspects and participate with different stakeholders. 

4.    Courage – able to lead the Board in difficult times amid complex and ambiguous situation while being courageous in believing in the Board’s efficiency. 

5.    Curious – with external factors.

6.    A Learning Mindset -  ability to think in different perspectives.

It requires more than skills, experiences, and characters of the Chairperson to ensure corporate survival and sustainable growth,.  Regardless of gender, Chairperson of the future must understand what is needed as well as when and how.  Chairman is like a conductor in an orchestra in the sense of leading, guiding, and gathering players while determining the rhythm, listening with discretion, and setting the sound pattern of the band.  The performance achievement of each player is the proof of the conductor’s skill.  The success of  Chairman of the future can only be achieved when they gather band players with far-sighted visions and agile minds to be able to play in more volatile, uncertain, complex, and ambiguous context.   In this regard, the IOD has prepared Guideline for Chairman which include the summary of good characteristics of the Chairman (in alignment with contents mentioned in this article) and other guidelines that the Chairman and the Board should be aware of. 

Reference:

·        Korn Ferry, The Chair of the Future Toward 2025, June 2020.

·        Deloitte, Chair of the Future: Supporting the next generation of business leaders, 2020.

·        Advance Boardroom Excellence, Diversity at the Top: The Future of Chairwoman, 2022.

·        กรุงเทพธุรกิจ, ตลท.เผย "ผู้หญิง" มีบทบาทเพิ่มขึ้น ในคณะกรรมการบริษัทจดทะเบียนไทย, 7 มิถุนายน 2022.

·        สมาคมส่งเสริมสถาบันกรรมการบริษัทไทย, แนวปฏิบัติที่ดีสำหรับประธานกรรมการ, 2022.

Waratnarn Ratchamusikpat
Senior CG Analyst – Curriculum and Facilitators
Thai Institute of Directors (IOD)