It seems obvious that women are significantly underrepresented on the boards of Hong Kong companies. According to the 2015 Women on Boards Report, published by Community Business, out of 655 board directors of blue-chip companies in Hong Kong, only 73 of them are women, representing only 11 percent. The corresponding percentage of female directors in the United States is
19 percent. Fern Ngai, CEO of Community Business, believes that there are still cultural and structural barriers that bar women from key decision-making positions. Although Germany just passed a law in 2015 requiring public companies to give 30 percent of board seats to women, Ngai does not believe in mandatory quotas for female directors. She claims that what really matters is the shift in mindset to seek greater gender diversity. Is there a large enough supply of board-ready women to serve as directors? As a matter of fact, 33 percent of senior management positions are held by women in Hong
Kong—the third-highest in the Asia Pacific region. These female senior managers will have the potential to become directors. This is why the 30% Club Hong Kong has been formed. It is an outreach arm of The Women’s Foundation, one of Hong Kong’s leading non-profit-making organizations dedicated to the advancement of women’s social status. The purpose of the Club is to raise awareness among business leaders of the importance of gender diversity through empirical research, community programs, as well as advocacy. The target is to increase the percentage of female directors to at least 30 percent. The club has been endorsed by the Equal Opportunities Commission of Hong Kong. However, changing the dominance of male directors in Hong Kong is not easy. According to Jenny To, Talent Management and Communications Director at Pernod Ricard Asia in Hong Kong, the main challenge is to change the mindset of existing board members to accept diversity. A spokesperson for the 30% Club said that companies with more women on their boards perform better than those with fewer women directors. This is supported by the Credit Suisse Research Institute’s report in 2013 that
the net income growth of firms with women directors averaged 14 percent from 2007 to 2012, compared with only 10 percent for companies with no female board members. Wendy Yung, Executive Director of Hysan Development Company, notes that directors from diverse backgrounds could bring more collective insight and enrich constructive board decision-making. Progression of board diversity remains hopeful and the 30 percent Club will continue to support sustainable business-led voluntary change to improve the current gender imbalance on corporate boards.
Questions
2-12. Given that women participate in the labor force in roughly the same proportion as men, why do
you think women occupy so few seats on boards of directors?
2-13. Do you agree with the quotas established in many countries? Why or why not?
2-14. Beyond legal remedies, what do you think can be done to increase women’s representation on
boards of directors?
Sources: 30% Club HK, “Introduction to the 30% Club Hong Kong,” http://30percentclub.org
.hk/media/pdfs/Introduction-to-the-30-percent-club.pdf; “More Women Needed on Board,”
South China Morning Post, http://www.scmp.com/article/996437/more-women-neededboard; 30% Club HK, Office Web site, http://30percentclub.org.hk/; PricewaterhouseCoopers, http://30percentclub.org.hk/“Annual Corporate Directors Survey: The Gender Edition,” May 2015,
http://www.pwc.com/us/en/corporate-governance/publications/assets/pwc-acds-2014-the- genderedition.pdf; Grant Thornton, “Corporate Governance Review,” 2012, http://www.grant-thornton.co.uk/ Global/Publication_pdf/Corporate_Governance_Review_2012.pdf; Chartered Secretaries, “ Diversity on the Boards of Hong Kong Main Board Listed Companies,” https://www.hkics.org.hk/media/publication/attachment/PUBLICATION_A_2333_Board%20Diversity_Full%20Report.pdf; Hong Kong Exchanges and Clearing Limited, Consultation Paper: Board Diversity, September 2012, https://www.hkex.com.hk/eng/newsconsul/mktconsul/Documents/cp201209.pdf; George
W. Russell, “Balancing the Boards,” http://app1.hkicpa.org.hk/ APLUS/2013/03/pdf/14-19-
Diversity.pdf; Luo Weiteng, “More Women Board Directors Fuels Company Growth in HK,”
China Daily, http://www.chinadaily.com.cn/hkedition/2015-03/04/ content_19714310.htm;
Claire Cain Miller, “Women on Boards: Where the U.S. Ranks,” The New York Times, www.nytimes
.com/2015/03/11/upshot/women-on-boards-where-the-us-ranks.html?_r=0.
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