Is it time for Hong Kong to impose gender quotas on boards?

Given Hong Kong’s relatively slow progress in board diversity over the past few years, Community Business is asking whether it’s time for gender quotas. The non-profit’s latest report has revealed that women make up less than one-fifth of new board director appointments in Hong Kong. Although this rate is still low compared to other countries, it’s a record high for the country since 2009.

The latest new appointments have contributed to a slight increase in the overall percentage of women on boards from 13.4% to 13.7% in Q3, restoring female representation at the same level recorded at the beginning of this year. There are six new female directors at five companies this quarter, confirmed Community Business. They include: Tan Sin Yin, Jessica at Ping An Insurance, Wen Dongfen at CNOOC, Huang Shaomei of Echo and Chiu Wai Han, Jenny at New World Development, Chow Woo Mo Fong Susan at Hong Kong Exchanges and Clearing, and Eileen Murray at HSBC.

WIDENING GENDER GAP

Despite the slight increase in female representation on boards, the number of companies with multiple female directors or with female executive directors remains at the same level, confirmed Community Business.

This implies a widening gap between Hang Seng Index (HSI) companies: those already with at least one female director are appointing more women, whereas many of those without any are stagnant, if not regressing. In fact, the number of companies with all-male boards increased from 11 to 12 this quarter. They now account for almost a quarter of HSI boards. 

STRONGER PUSH FOR GENDER DIVERSITY

“Based on six years of gender reporting among Australian companies, a recent study found that companies with a female CEO increased their market value by 5%, worth nearly $80 million to an ASX200 company on average,” stated the non-profit. “Hong Kong should therefore set a higher bar on board gender diversity.”

It believes that imposing a mandated quota could speed up progress. “Admittedly, this measure is no panacea as it may undermine meritocratic appointments. But as we continue to see stagnation despite years of advocacy, a stronger push might just be what the city needs.,” noted Community Business. “In recent years, we have seen a small minority of enlightened Hong Kong listed companies take concrete actions to rectify their gender-homogeneous board makeup. However, the majority have resisted or paid mere lip-service to the issue by appointing a token woman, before returning to business as usual and a candidate pool taken from ‘the old boys club’.”

Given Hong Kong’s painfully slow progress in board diversity over the past years, Community business has organised an event to discuss whether is it time for gender quotas on boards in Hong Kong on 24 September. Click here for more information about the event.