How firms gain from women directors

White Collar has always supported listed companies appointing more women to their boards. Now, a Credit Suisse study has shown that companies with more women directors can achieve higher profits. The Credit Suisse Research Institute studied 2,400 companies in the United States, Europe, Asia and Latin America, including 93 in Hong Kong, from 2005 to last year.

Overall, it showed that there were more women on board nowadays, with 59 per cent of constituent companies in the MSCI All Country World Index having at least one woman on board at the end of last year, compared with 41 per cent in 2005.

The increase was partly due to law changes in seven countries that mandated female board representation and eight nations that set non-mandatory targets.

Hong Kong, where the government has not intervened in this issue, is below international standards. About 51.6 per cent of companies had at least one woman on board at the end of last year, compared with 28.8 per cent in 2005.

Figures from the Hong Kong Institute of Directors showed only about one in 10 directors in the city were female. Put simply, Hong Kong-listed companies are still dominated by men.

This is something for Secretary for Financial Services and the Treasury Professor Chan Ka-keung to look into. If brokers have had to cut their lunch short to match international standards for market trading hours, why haven't companies been made to follow international targets for female representation on board?

More women on board may help Hong Kong companies make more money. The Credit Suisse study found that companies with more women on board outperformed those that did not have. If gender diversity on the board can lead to companies performing better, it makes sense for Professor Chan to consider doing more to encourage companies to appoint more female directors.