Business groups back diversity disclosures, warn against compulsion

 

The Malaysian Employers Federation says diversity, equity and inclusion extend beyond issues surrounding Bumiputera recruitment.

PETALING JAYA: Business groups have expressed support for a proposal that companies be asked to make diversity, equity and inclusion (DEI) disclosures, but caution against making them mandatory.

William Ng, chairman of the Small and Medium Enterprises Association, said DEI disclosures are important in a multiracial society.

However, he said they should be voluntary, especially for SMEs, due to the varying availability of a diverse workforce based on location and operational requirements.

“For example, a business operating in a certain locale with an overwhelming majority from one race may find it difficult to meet its own DEI objectives,” he told FMT.

“A business whose export market is predominantly in Indonesia may require workers who can speak in native Malay or Indonesian, while purchasing officers buying directly from China may need to speak in Mandarin.”

At the Bumiputera economic congress last week, Bursa Malaysia chairman Abdul Wahid Omar proposed that companies be mandated to disclose workforce diversity as a means of enhancing Bumiputera economic participation.

Wahid, a former minister, said a diverse workforce was capable of attracting investments, but dismissed calls for DEI disclosures to be made compulsory for the private sector.

Federation of Malaysian Manufacturers president Soh Thian Lai expressed similar sentiments, saying such disclosures must not compromise business efficiency and competitiveness.

“Employers would need to carefully evaluate the potential implications and trade-offs associated with such disclosures,” he said.

He nevertheless acknowledged the benefits of DEI disclosures, citing increasing stakeholder expectations for companies to prioritise DEI within their overall environmental, social and governance strategy.

“In disclosing information about their DEI initiatives and performance, companies can demonstrate their responsiveness to stakeholder concerns and expectations, thereby enhancing transparency and accountability,” he said.

Malaysian Employers Federation (MEF) president Syed Hussain Syed Husman also backed the idea, describing DEI as being about more than just Bumiputera recruitment.

“DEI includes gender, people with disabilities, and others. To have a report like this is fine. We should allow industries to hire based on meritocracy, and hope that all Malaysians are given fair employment opportunities,” he told FMT.

“MEF supports DEI reporting, as it will record all forms of diversity.” - FMT