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Bursa chief moots mandatory diversity disclosure to nudge firms toward more Bumi hires - The Leaders Online
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Bursa chief moots mandatory diversity disclosure to nudge firms toward more Bumi hires

Bursa chief moots mandatory diversity disclosure to nudge firms toward more Bumi hires

PUTRAJAYA, March 1 — Former minister Tan Sri Abdul Wahid Omar today suggested a policy to require companies to disclose how diverse and inclusive their workforce are, a proposal the Bursa Malaysia chairman believed could nudge employers to hire more Bumiputera.

Speaking at the seventh Bumiputera Economic Congress here, Wahid mooted a mandatory DEI disclosure policy as one of six proposals to increase Bumiputera economic participation, a key target set decades ago but is yet to be met.

DEI, the initials for “diversity, equity and inclusivity,” has become a key criterion for investment in a market where investor-activists are growing in numbers. Some of the biggest blue-chip companies in the world have DEI hiring policies to accommodate people from less privileged communities.

Wahid suggested a mandatory DEI disclosure could incentivise Malaysian companies to employ more Bumiputera since a diverse workforce could draw more investments.

“If Malaysian firms are not sustainable foreign investors might not want to invest in our companies,” he said.

Bumiputera placement quotas were among key policies of a race-based affirmative action introduced in 1971 by the second prime minister, the late Tun Abdul Razak Hussein, which was aimed at raising the community’s participation in businesses and industries through discriminate hiring.

Abdul Razak’s son and sixth prime minister, Datuk Seri Najib Razak, scrapped the quota in 2009 and substituted it with a requirement to offer 50 per cent of the public shareholding spread to Bumiputera investors. Najib said the move was intended to court foreign investors who would have been deterred by the Bumiputera 30 per cent hiring quota.

But the quota system remained as a key condition for civil service employment and government-linked companies. The quota is also imposed for government procurement, companies that bid for contracts from GLCs, such as Petronas, must have at least 51 per cent Bumiputera workers.

In the last few years, pro-Bumiputera policy advocates have revived calls for the 30 per cent hiring quota to be reinstated. The government has so far ignored them.

Today, Wahid dismissed suggestions that DEI requirements are made compulsory for the private sector.

“We shouldn’t make it compulsory because some companies may have their reasons,” he said.

“We want them to disclose their DEI because when they do it could make them become more conscious about how they hire.”