Why is there a lack of women on Hong Kong boards?
Hong Kong is lagging significantly behind its international counterparts in terms of the number of women on the boards of its major companies. Nicky Burridge reports.
Female directors currently account for just 11% of board members of Hang Seng Index-listed firms, according to a recent study by research group Community Business.
The situation is significantly worse in Hong Kong than in other developed countries with women occupying 26% of board positions in the UK, 22% in Australia and 20% in the US. In Asia, both Malaysia and India have surpassed Hong Kong in terms of the proportion of women occupying senior company positions.
But while many countries have put measures in place to increase the number of women at board-level, Hong Kong has made little progress.
The new research found that there has been no overall improvement in the number of women on company boards during the past year.
There are cultural and institutional barriers that continue to prevent women from advancing to the top.
The number of blue-chip firms with all-male boards increased from 14 to 16 - nearly a third of the total - while seven companies have not had a single female director since the group first started to monitor the issue in 2009.
Fern Ngai, Chief Executive of Community Business, said: “The glacial pace of women’s inclusion on corporate boards indicates a lack of recognition of women’s talents and tremendous contribution to the economy. It is a clear signal that there are cultural and institutional barriers that continue to prevent women from advancing to the top.”
Su-Mei Thompson, Chief Executive of The Women’s Foundation, believes much of the problem is down to discrimination against women and a lack of opportunities for them to advance.
She commented: “Many companies continue to employ discriminatory and opaque recruitment and promotion processes and rely on the golf club and entrenched old boys’ networks to fill key roles.
“Both women and men also continue to subscribe to gender stereotypes about women, men and leadership aptitude which leads women to be less explicit about their ambitions.”
She added that recent research by Mercer found that, in Asia, women are less likely than men to be promoted up through an organisation.
Percentage of women on company boards, 2016
|Country||Women at board level (%)|
Source: Women On Boards Hong Kong 2016, Community Business
Compared with other regions, employers in Asia are less likely to be focused on the drivers of gender diversity, such as the active promotion and management of leave and flexibility programmes, the adoption of rigorous pay equity processes and the review of performance ratings by gender to look for unconscious bias or institutionalised barriers.
But Community Business suggests companies are missing out on significant benefits by failing to promote women to a senior level.
Fern said: “The business case for gender diverse boards is clear - better decision making, more creativity, improved risk management and corporate governance, with a growing body of evidence linking gender diversity at top levels with improved financial and non-financial performance.”
Despite the success of quota systems to increase the number of women on company boards in some countries, Fern does not think this is the way forward for Hong Kong.
She explained: “Working environments and morale are detrimentally impacted by this, while quotas can also risk viewing qualified women negatively, as token board members.”
She also added that Norway’s quota system did not succeed in altering the share of women in CEO or chairman positions, which remains at less than 5%.
The business case for gender diverse boards is clear with a growing body of evidence linking gender diversity at top levels with improved financial and non-financial performance.
“To drive faster and meaningful progress, we urge companies to voluntarily set targets that are relevant to their own business environment, just like setting key performance indicators, and maintaining scorecards as they would as a natural part of business.
“If we continue to fail to see improvement, it may well be time for stronger regulated measures to be introduced in order to break Hong Kong’s inertia,” Fern concluded.
Women on major company boards in Hong Kong 2009-16
|Number of female board members||Women at board level (%)|
Source: Women On Boards Hong Kong 2016, Community Business
Su-Mei agrees that it would be better for Hong Kong companies to set their own targets, rather than have quotas imposed on them, but she stressed that they also need to tackle inequalities in the workplace.
She said: “We need to get male managers to realise that the environment they think of as a meritocracy may not be quite as fair and equitable as they think.
“We need to encourage male managers to seek feedback from their teams about their personal management style and whether this is inadvertently preventing or discouraging female colleagues and subordinates from speaking up or advancing their careers.
“The more leaders can frame gender balance as a lever to achieve existing goals - growth, customer centricity, globalisation - the more enthusiasm gender balancing is likely to generate within the company and among men and women."
It may well be time for stronger regulated measures to be introduced in order to break Hong Kong’s inertia.
But Su-mei does believe that things are moving in the right direction, albeit at a slow pace.
“It will take a while for companies to retire existing board members and replace them - hopefully with more female directors," she said. “In general, Hong Kong companies seem much more aware than just a few years ago of the benefits of board diversity.”
Meanwhile a number of Hang Seng-listed companies are proactively taking steps to improve gender diversity at a senior level.
Both Community Business and The Women’s Foundation highlight measures taken by HSBC, which has seen the number of female board members climb from just 14% in 2009 to 37% now.
Fern added: “Over the years, the bank has set its own targets of female representation, not only at the board level, but also senior levels, as well as its talent pipeline.
“More importantly, HSBC has openly communicated its plans and timelines - being the only company among the 50 Hang Seng Index companies with a written disclosure on target and timeline for female representation in its boardroom.”
The strategies put in place have enabled the group to have already surpassed its target of having 30% of board positions occupied by women by 2020.