NewQuota system to close gender gap on Hong Kong corporate boards may do more harm than good

Three years after Hong Kong Exchanges and Clearing (HKEx) adopted a rule change to promote gender diversity on corporate boards, there has been limited progress with women accounting for little more than one in every 10 of the top positions.

About 11.3 per cent of the directors of Hang Seng Index constituent companies were female, up from 9.6 per cent last year, according to a recent survey by non-profit organisation Community Business. But the rise was propelled by only "a handful of companies", and nearly three quarters of firms have made little progress in tackling the gender imbalance issue since 2009, the organisation noted.

"A concerted and multi-pronged effort by different sectors in Hong Kong in recent years has not brought about a faster pace of change, even with momentum globally on this issue," the report said.

A separate study by Community Business found that women make up 45.7 per cent of middle level staff in Hong Kong, but occupy fewer than one third of senior management roles.

"The biggest challenge is getting chairmen to think about the benefits of having women on boards," said Nick Marsh, managing director with executive search firm Harvey Nash, Asia Pacific. While women's representation in Hong Kong boardrooms continues to lag behind that of the US and most European countries, some of the city's Asian neighbours such have been taking steps to catch up.

India’s stock exchange last year imposed a quota of one female director on the board of every listed firm, which has helped Indian companies overtake their Hong Kong counterparts in the number of women taking board seats for the first time in history. That has raised a question whether HKEx should  follow India’s lead and implement a similar quota system.