Far to go before Hong Kong breaks glass ceiling
More needs to be done to bring women on to company boards, despite HKEx's new rules
Two months after Hong Kong Exchanges and Clearing introduced a new requirement for companies to have more women directors, there have been some positive changes. But the glass ceiling is still firmly in place.
In September the exchange implemented a new rule which requires companies to ensure they have a more diverse board composition in terms of gender, knowledge, age and background. If they fail to implement the policy, they will need to explain why to HKEx.
Fund company BlackRock reviewed 35 blue chip companies and found that 13 per cent of directors are women. This is slightly up from the average before the policy was announced in December last year, when only 10 per cent of directors were female. HKEx itself has made an improvement on this front. Last year, it was among the 40 per cent of companies with an all-male board. Since April, it has added one female director - former Hang Seng Bank chief executive Margaret Leung Ko May-yee.
Statistics show that Hong Kong still lags behind other parts of the world, with US boards made up of 17 per cent women and Britain 19 per cent. Seven European countries have quotas requiring female directors to represent about 25 per cent to 40 per cent of a board.
More should obviously be done in Hong Kong. While White Collar is not a big fan of quotas, it would be good for companies to set some sort of target. HSBC said it has a target of women taking 25 per cent of its board seats by 2015
BlackRock research shows very few companies have disclosed their policies on how they will appoint more women directors. The study showed only two - HKEx and VTech Holdings - have disclosed their nomination process to ensure a diversity of board candidates.
Only six companies - HSBC, Hang Seng Bank, Henderson Land, Hutchison, MTR Corp and HKEx - have disclosed their board diversity policies on their website. Hong Kong companies still do not seem to take the issue seriously enough to tell the public how they would achieve a more diverse board.
Mary Schapiro, former chairman of the US Securities and Exchange Commission, is among the regulators who encouraged companies to have a diverse board. She believes more directors of different gender and backgrounds would help companies' performance. Schapiro was the first woman to chair the US regulator.
She told the author of this column that her personal experience has shown that if more women are on boards, they will feel more free to voice their views. She is now a director of GE, where there are five women on the 18-member board.
Women are important customers nowadays. If companies' boards do not have sufficient women, they will not be able to understand their customers. HKEx itself should take the lead as it only has one woman out of its 13 directors. The bourse should be a role model to encourage other firms to adopt best practices.