HKEX takes stock of its first female leader
- Bonnie Chan will need a little more luck than the Hong Kong bourse’s current CEO when she takes over in May next year
It’s about time Hong Kong Exchanges and Clearing (HKEX) was led by a female chief executive. Bonnie Chan Yiting will also be the first internal promotion to lead Asia’s third-largest stock market. HKEX is practising what it preaches.
Last year, it imposed a gender diversity rule by requiring a formal end of all-male boards among publicly traded companies by the end of 2024. A third of HKEX board members are currently women.
The appointment of Chan, who will take over in May next year, comes at a challenging time for HKEX as IPO activities, total market capitalisation and stock market transactions have all dwindled to their lowest in many years. The reasons are complex, with high interest rates and the strong US market the biggest magnets sucking capital away from Asia.
There are also geopolitical tensions and the Chinese economic downturn to worry about.
She will need better luck than incumbent Nicolas Aguzin. Some have unfairly blamed the HKEX chief executive for the stock market’s slump.
Aguzin was placed in an almost no-win position. His tenure starting in May 2021 coincided with the Covid-19 pandemic.
Then, 10 months after he took over, interest rates in the United States and Hong Kong began rising, and they kept increasing by five full percentage points until the US Federal Reserve took its pre-holiday pause last month. The Hang Seng Index has fallen by almost a fifth since that first rate rise.
The job of the CEO is not to guarantee a bull market, but to ensure the proper functioning of the capital market, and put in place rules to protect investors, and to deter and punish fraud and wrongdoing.
Investor protection will be one of the first areas to concern Chan.
HKEX names Bonnie Chan as its first woman CEO, to succeed Aguzin
Critics such as the Asian Corporate Governance Association claim HKEX has been putting corporate interest ahead of investor protection to attract IPOs. It marked Hong Kong down to sixth place in its 2023 regional corporate governance survey, arguing that investor protection had been weakened.
Hong Kong has eased many rules and liberalised the listing regime to make itself a more attractive place to raise capital. It will be up to Chan to recalibrate the rules where appropriate to balance the ease of IPOs with investor protection.
