Women on Boards 2019 Q2

In our first quarterly update to the data, we are disappointed to report a significant decrease in the overall percentage of women on the boards of Hong Kong’s Hang Seng Index companies, from 13.9% at the beginning of the year to 13.1% as of 1 April 2019.

We attribute this drop mainly to the fact that during the first 3 months of this year, there were no female appointments to HSI boards, while 14 appointments were made to men.  This was exacerbated by the addition of Techtronic Industries Company (which has an all-male board) to the HSI in March 2019, as well as the removal from the HSI of China Resources Power, which has two female directors.

This uninspiring start to the year prompts us to reiterate our message that having a gender diverse board is not about optics but about solidifying your business. A board made up of different, even conflicting, perspectives and life experiences encourage a culture of questioning and robust discussion. This will not only help to mitigate risks and strengthen governance but ensure a higher probability of business success, which is backed by a growing body of research. In these volatile and disruptive times, companies should demand a strong, diverse board that futureproofs their existence.

Unfortunately, we have seen a decrease in the representation of women across all of our diversity markers in Q2 of 2019. Companies with at least one female director have decreased by two in three months, as have companies with female executive directors; companies with multiple female directors have dropped from 22 to 21; and companies with all-male boards have increased by two to total twelve.

The League Table provides a high-level snapshot of the overall ranking of company performance – as assessed by the percentage of women on their boards. We report some dramatic movement to the top ten in Q2 2019, particularly Hang Seng Band dropping from first to joint second position (due to an additional male appointment in March 2019); The Bank of China dropping from sixth to ninth; and Sino Land moving to 32^nd from 45^th  due to the loss of a female member of their board in February 2019.

The number of all-male boards in Hong Kong increased by two in the period January – 1 April 2019. Techtronic Industries Company joined the HSI in Q1 2019 (and does not have any female representation on its board) and Sino Land Company Limited lost Alice Mo Lin Ip from its board of directors.

Of the six female directors appointed in 2018, only four were new appointments (the remaining two were role changes: Leonie Ki from Executive Director to Non-Executive Director at New World Development; and Yang Huiyan from Country Garden Holdings, who was promoted from Vice-Chair to Co-Chair). Only one woman (Lai Hong Yee of Want Want China Holdings) was a brand-new appointment as she has not previously been appointed to any other Hong Kong listed corporate boards. This finding indicates that companies are reluctant to appoint women who have not had previous board experience, which further limits the expansion of the talent pipeline of senior women who could be considered for board roles.

It is important to ensure that the pipeline of female talent is not only nurtured from within (with companies supporting the advancement of women to senior positions), but also tapped when it comes to nominating board candidates. Companies should ensure that their pool of potential board members is meritocratic and diverse. Broad perspectives based on relevant experience are invaluable around the boardroom table in these VUCA times. The 30% Club Hong Kong, in partnership with The Women’s Foundation, has established the Boardroom series for Women Leaders which aims to tackle this perceived lack of female talent at the board level and offer opportunities for women to ensure their path to the boardroom is not hindered by a gendered disadvantage.

There are no new women to profile in this quarter as no female appointments were made.

There have been some small victories for countries around the globe. Most notably, Singapore and India have overtaken Hong Kong in the rankings for the first time, reporting 15.2% (Singapore) and 14.0% (India) women on their boards. Regionally, Malaysia reports the highest numbers, with 23.2% recorded. Both India and Malaysia have government quotas in place which may go some way to explaining their acceleration in recent years. Singapore, via the government-backed Council for Board Diversity*, has enacted a multi-pronged campaign involving naming-and-shaming, engaging with board decision makers, maintaining a list of female candidates, and showcasing through data the impact on corporate performance. Inspired by this galvanised action, vocal support from male champions at the board level has increased dramatically. All of these factors have led to rapid progress in Singapore, with female board appointments reaching a record high of 24.0% during 2018.

• Previously named ‘Diversity Action Committee’ and starting in January 2019, its scope has expanded to also include statutory boards and non-profit organisations.