Diversity on the board of directors must go beyond "a gender quota" and should reflect numerous "dimensions of diversity," a senior regulator at Singapore Exchange Regulation (SGX RegCo) has said.

"A diverse board is about the director representing a different point of view," said Boon Gin Tan, chief executive of SGX RegCo, at the recent Singapore Institute of Directors Nominating and Risk Committee seminar in Singapore. "In other words, it is both about recruitment as well as representation."

"A quota only solves the recruitment problem," said Tan in his latest LinkedIn post, summarising the need to distinguish between recruitment and representation when it comes to board diversity.

A gender quota increases the perception that gender is overweight compared to other dimensions of diversity, such as industry experience and domain expertise, Tan said. "[While] a female director may have been appointed at the expense of a better-qualified man, which may impact her ability to credibly represent a different view," Tan said.

Board diversity is often measured by a simple performance indicator, such as percentage representation, according to Cherine Fok, partner of environmental, social and governance (ESG) consulting at KPMG in Singapore.

"However, beyond the numbers, businesses should strategically focus on the broader implications of diversity indicators, linking them to meritocratic principles within their operations," Fok said.

For example, analysing diversity data at the top may provide insights into organisational dynamics such as hiring, advancement and attrition, viewing these as levers for driving change that will support sustainable business performance, Fok said.

Qualitative aspects such as psychological safety would also weigh in heavily - such as ensuring that every voice at the board table is heard and considered, as well as access to leadership positions are equally available to all, the partner said.

Code of corporate governance

SGX RegCo's diversity policies combine a nine-year cap on independent director tenures and mandatory remuneration disclosure for each director and chief executive officer.

"[We] have seen increases in both the number of first-time directors and female directors," Tan said. "More importantly, female directors are taking up more leadership positions in board committees, such as the nominating committee and remuneration committee."

Tan said he believes this is a more sustainable model that addresses the recruitment and representation of women on the board. SGX RegCo will keep monitoring the data to see if a quota is indeed required, Tan said.