Women still struggling to get into HK boardrooms
HKEx's bid to narrow gender gap welcomed, but forget about quotas
Women may hold up half the sky, but inside the gleaming towers of Central they are struggling to break through the glass ceiling.
Only 10 per cent of the city's directors are female, far lower than the 20 to 40 per cent seen in the Western world.
In fact, 40 per cent of Hong Kong-listed companies, including Hong Kong Exchanges and Clearing itself, have no women directors at all, while 37 per cent have only one.
To level the playing field and catch up with other finance centres, the HKEx last month issued a consultation paper proposing companies make their boards more diverse in terms of gender and age.
The paper, which matches the standards set in Britain and Australia, proposes making board diversity a matter of corporate governance, making it mandatory for companies to explain why they do not have such a policy.
Listed companies and brokers have welcomed the move but are divided on whether Hong Kong should follow the example of European countries in making it legally binding for companies to have a certain percentage of female directors.
"Women are less entrepreneurial than men in general, so we see less women running their own businesses. This explains why there are only a few female directors in listed companies," Sun Hung Kai Financial executive director Joseph Tong said.
The Women's Foundation chief executive Su-Mei Thompson has a completely different take. The reason for the imbalance lies in a combination of factors ranging from "entrenched gender bias and vestiges of male favouritism, to investors being extraordinarily passive about challenging boards on the lack of female representation and women holding themselves back".
"Investors have an important role to play in requiring companies to increase the percentage of women in decision-making roles, whether at the board or at the executive level," Thompson said. "They have been way too passive about taking companies to task about under-representation."
Michael Lindsay, president of Gordon College in the United States, has conducted extensive research on the background of chief executives and found fewer women make it to senior levels due to their domestic roles.
"The years between 25 and 40 are important for the transformation from a junior executive to a senior leader. This is also the prime years during which women bear children," Lindsay said.
"Today, men and women bear responsibility for family duties, but women still feel especially responsible for child-rearing. In fact, my study showed that even those women who employed domestic helpers and nannies felt more responsible than the men in the study for rearing children."
Some European companies have made it mandatory for companies to have a certain percentage of female board members. Norway, for example, introduced a law in 2004 making listed companies increase the percentage to 40 per cent.
Spain adopted similar legislation in 2007, to take effect in 2015, requiring all publicly traded companies with more than 250 employees to have at least 40 per cent women on their boards.
France has introduced a 20 per cent quota, to be implemented within three years, and a 40 per cent quota that will take effect in 2017. Similar laws have been enacted in Belgium, Iceland, Italy and Finland.
The HKEx has not gone as far as proposing a quota as it said in the consultation paper that there were concerns such a move may result in boards getting filled up with relatives and friends.
Thompson doesn't buy the argument.
"I think quotas should be part of the conversation," she said. "The suggestion that quotas can lead to underqualified or token appointments doesn't appear to be borne out in those jurisdictions where quotas currently apply.
"At The Women's Foundation, we believe quotas should not be the first intervention of choice but we would certainly support the temporary introduction of quotas as a jump-start if regulatory tools and guidance fail to deliver the desired results.
The chair of the Oslo Stock Exchange in Norway, where quotas were introduced in 2003, recently said 'voluntarily it would never have happened, a quota was the only path'."
Mark Konyn, chief executive of Cathay Conning Asset Management, said Europe had moved towards the quota system as the European Commission got frustrated by the slow progress by corporations in closing the gender gap.
"Female participation in the workforce has been increasing progressively for well over two decades in most developed countries and yet representation on boards and at senior levels is lagging," Konyn said.
"This suggests that there is a so-called glass ceiling or inherent biases that prevent women realising their potential and contributing at the top level."
Mike Wong, chief executive of the Chamber of Listed Companies of Hong Kong, supports the HKEx proposal to diversify boards but opposes a mandated representation at the board level.
"The current proposal from HKEx allows companies to decide how to diversify the board, and is not restricted to gender," he said.
"This allows companies more flexibility. We should focus on finding the most qualified and experienced people instead of just concentrating on gender."
Business and Professionals Federation of Hong Kong deputy chairman Edward Chow Kwong-fai agreed.
"I believe people should be appointed on merit and not gender," he said. "On the other hand, I do not mind more female directors than males as I see both as equals."
Angelina Kwan Wai, chief operating officer and executive managing director of Reorient Financial Markets, said the low number of women on boards in Hong Kong was not good for the companies.
"A recent Credit Suisse Research Institute report showed companies with at least one woman on their board achieved a 4 per cent higher average return on equity and those with more female directors did better in difficulties," Kwan said.
"Therefore we would consider the level of diversity among board members as a factor in choosing companies to invest in."