As mainland firms continue to expand into Hong Kong, leading female professionals say this offers an opportunity for more women here to earn seats in the boardroom.
“Companies in China tend to learn very quickly and the ones that are expanding overseas are especially open to recruiting diverse talent,” said May Tan, a non-executive director of Standard Chartered Bank and a member of the Hong Kong Exchanges and Clearing’s listing committee. “With Hong Kong companies, on the other hand, it can be difficult for women to break into the old boys’ club network around family-owned businesses, where there is also slower board turnover.”
Women currently make up 10.7 per cent of directors of all listed companies in Hong Kong, a percentage that has not increased over the past five years, and 40 per cent of Hong Kong-listed companies have no female directors on their boards.
Meanwhile, mainland enterprises comprised 48 per cent of the 1,602 listed companies at the end of last month – up from 37 per cent five years ago – and account for 56.5 per cent of the market’s capitalisation.
Dr Judy Tsui, chair professor of accounting at Polytechnic University, said this offered new opportunities for women to expand their horizons.
When Tsui was asked to join the board of China Vanke, a leading Shenzhen-listed real estate company, she was initially surprised because she had limited experience with mainland firms.
“I asked them, are you sure you want me, an academic and a woman? They said yes, and at the first board meeting I proposed eight resolutions and they adopted all of them,” she said.
After serving a five-year term at China Vanke, Tsui is now a non-executive director of Hong Kong power company CLP Holdings.
“Mainland companies are similar to many other companies around the world, where boards are made up of people who are very similar with similar backgrounds,” she said. “But because Chinese companies are targeting global markets, they are in need of people with different experiences. Women can step up and show that they have the skills to help a business grow.”
HKEx decided last December to require all listed companies to report on their board diversity policy from September this year.
A recent study by Catalyst of Fortune 500 companies showed that on average, companies with the highest percentages of women board directors outperformed those with the least by 53 per cent when it came to higher returns on equity.
Unlike other jurisdictions like Norway and France, Hong Kong has no quotas on gender diversity. But as of the next annual report season, listed companies will need to describe their board diversity policy or explain why they do not have one.
But so far, mainland companies listed in Hong Kong still show less appreciation for the link between greater diversity and enhanced business performance than their foreign-based counterparts.
Only 19 per cent of directors of mainland-based companies thought that gender and ethnic diversity were important, according to a survey by Community Business released last week. Meanwhile, 80 per cent of foreign-based companies listed in Hong Kong thought that diversity was linked to enhanced business performance, compared with 56 per cent of mainland-based companies and 57 per cent of Hong Kong-based companies.
Tan said the survey showed there was a lot of work to be done to educate companies about the benefits of diversity.
Published in the South China Morning Post on November 25, 2013