Publicly listed companies in Hong Kong, including blue chips, reported only a marginal improvement in the poor representation of women on their boards last year. And with new rules taking effect from January 1, they are greater pressure from fund managers to dismantle all-boys clubs. The 64 constituent members of the benchmark Hang Seng Index had only 110 women board members accounting for 14.6 per cent of the total last year, according to data compiled by sustainability data and technology firm Miotech. That compared with 13 per cent in 2020 and 12.6 per cent in 2019. The picture was no different at the more than 2,500 Hong Kong-listed firms. Only 14.9 per cent of the board members were women last year, a tiny increase from 14.4 per cent in 2020 and 13.8 per cent in 2019. “The region has significantly lagged behind the US, Europe on board diversity, said Fay Wu, global head of research at Miotech. “Women’s board representation came in below 15 per cent among the firms that make up the Hang Seng Index, mainland China’s CSI 300 Index and Taiwan’s Taiex index.” Among constituents of the MSCI ACWI global stock index, women held 34 per cent of director seats at UK-domiciled firms in 2020, compared to 28.2 per cent in the US, 19.5 per cent in Singapore, 10.7 per cent in Japan and 4.9 per cent in South Korea. One third of firms listed in the city had all-male boards in 2020, according to Hong Kong Exchanges and Clearing (HKEX). They include telecoms giant China Mobile, food delivery platform Meituan, battery and electric vehicle maker BYD and smartphone maker Xiaomi. Starting January 1, listed firms with single-gender boards have three years to introduce board gender diversity . They have to set targets and timelines at the board level from this year, and disclose gender ratios and diversity plans across the workforce. The exchange also requires the companies to undertake an annual policy review. Global asset managers are also turning up the heat on Hong Kong firms this year. BlackRock , the world’s largest fund manager with US$10 trillion of assets, will vote against the re-election of the director responsible for board nomination for all Hong Kong-listed firms with no female board representation, said Zoe Lau, a vice-president for Asia-Pacific investment stewardship. Fidelity International, with US$738 billion of assets under management, will vote against members of boards if they do not have at least 30 per cent female board representation for companies in developed markets and 15 per cent in emerging markets. “The HKEX’s new requirement on board gender diversity is incredibly positive because it acts as a circuit breaker to break the mind set of hiring from the same pool of talent who are friends of friends and existing board members,” said Gabriel Wilson-Otto, sustainability investing director at Fidelity. Hong Kong exchange wants to end all-male boardrooms State Street Global Advisors’ “fearless girl” campaign launched in 2017 to drive board gender diversity is slowly bearing fruit. After drawing attention to 1,486 listed companies with all-male boards globally, 862 had added at least one female director as of February 2021. “A lot of academic evidence has pointed out that diversity in thoughts leads to more innovation, less cronyism, less groupthink and creates better business outcomes,” said Ben Colton, global head of asset stewardship at State Street. Groupthink refers to the desire for harmony and conformity in groups that can result in irrational decision-making. A 2019 study of more than 1,000 companies in 15 nations by consultancy McKinsey found significant correlation between gender and ethnic diversity and profitability among large companies. The analysis found that companies in the top quartile for gender diversity on executive teams were 25 per cent more likely to have above-average profitability than companies in the bottom quartile, up from 21 per cent in 2017 and 15 per cent in 2014. While top management of these companies – mostly in heavy industries – generally agree with the need to change, they typically cite a smaller pool of female talent within their industries as a barrier, said David Smith, senior investment director at abrdn. “However, often what we are looking for is not industry-specific skills, but transferrable skills and different perspectives gleaned from different geographical, industry or functional experiences,” he said.