Hong Kong is seeing more women on boards – but it needs to do better (Nick Marsh's recent article in Britain in Hong Kong Magazine)
According to the latest ‘Women on Boards Hong Kong 2018’ report by Community Business, the number of women on boards of HSI companies increased by just 11% over the last year, to 13.8%. An improvement, but still miles off the stated goal of the 30% Club, to achieve 20% by 2020 and zero all male boards by the end of 2018.
Why we should all be worried:
Hong Kong’s standing as a progressive financial centre is critical to the success of the city, to attract top organisations not just to list, but to invest in R&D and infrastructure etc., which is all predicated on Hong Kong being seen as the place to be.
As an international financial centre, Hong Kong must be compared with others. Currently, the stats for women on boards in the USA stands at 21.2%, the UK at 27.7% and Australia at 26.1% - all three countries have increased their numbers substantially over the last 7 years through concerted effort.
Asia is behind the curve on diversity, and now Hong Kong is in danger of falling behind Asia. Hong Kong can claim to be just ahead of India and Singapore. However, at the current rate, both markets will overtake Hong Kong by next year, leaving just Japan (at 3%) trailing Hong Kong, and China (at 8.4%).
Women on Boards Hong Kong 2018 - beyond the headlines:
The good news;
The number of companies with at least one woman on the board has increased
The number of women with more than one board directorship also increased, as has the number of first time directors
Positively, 18.7% of all newly appointed NED appointments were women, so the rate of change is increasing.
Some companies reduced the number of directors on their boards, therefore changing the percentage weighting of the representation of women in doing so
Shockingly, 20% of boards still don’t have even one woman on their board
However, more good news is the pipeline (the number of executive directors who could take up a board post in the future) has increased. Just over a third of all HSI firms have a female executive as part of their leadership team (still pretty disappointing). Only one in 10 of the actual number of all executive directors are women (which is very poor). So much more to do on the pipeline!
How Hong Kong can move forward:
Being perceived as negligent on this matter, an issue high on the global agenda currently, would portray our great city as backward, when we should be front and centre in leading the way, showcasing the amazing array of female talent that calls Hong Kong home. And let’s be crystal clear, there is a fantastic pool of top talent here.
What needs to be done:
Chairmen need to review their board composition. Do you have a proactive diversity policy? Do you ensure your board shortlists are balanced? Do you use external parties to help you find new, qualified and interesting candidates outside your known world? Are potential iNEDs or existing iNEDs overboarded (i.e. they have too many pre-existing commitments)?
Chairmen and CEOs need to review the existing pipeline of executive talent at N-1, N-2 levels (i.e. those reporting to the board and their direct reports). Are those people in function roles or GM roles (GM experience is solid ground for those wishing to pursue future CEO/board roles)? What can you do to consider transversal moves to better prepare leaders of the future? Encourage your top women to challenge and stretch themselves.
Actions for Women – Be bold, make yourself known, share that you are keen on career growth, seek development and put yourself forward for opportunities. Gain a mentor, sponsor, coach, and network, network, network. Invest in yourself through continuous learning. If you are already in a senior position, mentor your female colleagues - act as a role model and pave the way for them.
Actions for Hong Kong Exchanges and Clearing (HKEx) – Take a stance and be forward thinking. The current proposals regarding diversity will bring Hong Kong into line with the UK and elsewhere, although we must be mindful that those jurisdictions are not going to stand still. Put in place the new rules CP A.5.5 and CP A.5.6. Review the ‘no term limits’ rule to ensure the boards are refreshed and offer opportunities for emerging talent.
The time to #PressforProgress is now. Let’s shine a light on the superb female talent in this great city and give them the opportunity to play a role in moving Hong Kong’s business community forward.
Access the original article in Britain in Hong Kong Magazine (Issue 54 - pages 38-39).