Women on Boards Hong Kong 2019: Q3

2 July 2019

Our Q3 analysis provides a glimmer of hope as we see the overall percentage of women on the boards of Hong Kong’s Hang Seng Index companies creep up to 13.5% from 13.1% in April. When analysing the representation further however, we see that this marginal increase can be attributed to a decrease in the total number of directorships available on the HSI (14 – from 612 to 598). In actual numbers, female representation on the HSI increased by only one from 80 to 81 between Q2 and Q3.

While the Q3 update provides some positive news in the increase of our headline figure, the progress made has been minimal.  In fact, for the first half of this year, there have only been three women appointed to Hang Seng Index boards, while 42 men have been appointed in the same period.  This rate of female appointments is very low, and if it continues for the rest of this year, 2019 is at risk of equaling 2018, in which only six female directors were appointed all year. This stagnation is in sharp contrast to the global trend and puts Hong Kong even further behind other markets in the region. In addition to the markets covered by our regional snapshot, a recent ASEAN report shows that other Asian markets have overtaken Hong Kong in terms of women on boards, with Indonesia (14.9%), Thailand (20.4) and Vietnam (15.4%) all tracking higher.

We must reiterate our message that having a gender diverse board is not about optics, but about solidifying your business. A board made up of different, even conflicting, perspectives and life experiences encourages a culture of questioning and robust discussion. This will not only help to mitigate risks and strengthen governance but ensure a higher probability of business success, which is backed by a growing body of research. In these volatile and disruptive times, companies should demand a strong, diverse board that futureproofs their existence.

2 July 2019

At the beginning of Q3, almost all of our diversity indicators paint a similar picture to previous analyses last quarter: companies with at least one female director and companies with one female director have remained stagnant at 38 (76.0%) and 21 (42.0%) respectively. Similarly, companies with a female CEO remain unchanged at one (Louisa Cheang, Hang Seng Bank), and companies with all-male boards have disappointingly remained at 12, the same as in Q2.  

The number of female executive directorships is the only diversity indicator that has moved – however unfortunately, this has seen a reduction from 17 to 15 between Q2 and Q3, dropping the percentage from 34.0% to 30.0%.

2 July 2019

The companies comprising the top five of our Women on Boards League Table remain unchanged between Q2 and Q3 however, the top three shifted and we find the number one position held by Hang Seng Bank, with 38.5% female representation at the board level. Positions two and three are held by Sino Biopharmaceutical and HSBC, with 36.4% and 35.7% of their boards made up of women.

Over the last three months, Sino Land made the most marked increase in the League Table, rising 15 places to 30^th. Notable in this move was the appointment to its board of its Finance Director Velencia Lee, who is a first-time board director of a listed company.  

Mengniu Dairy Company dropped 18 places over the last quarter to 45^th due to the loss of a female board member, which put them into the ‘all-male board’ category.

2 July 2019

The metrics on all-male boards remain the same for our Q3 update. Twelve companies (26.0%) of those listed on the Hang Seng Index do not have any women on their boards, with seven of those (14.0%) having never had female representation on their board since becoming listed.

Encouragingly, Sino Land moved out of the all-male category this quarter, however the loss of a female board member at Mengniu Dairy Company kept the net number of all-male boards at twelve.

From January 2018 to January 2019, the number of all-male boards was at an all-time low of 10, so this year’s increased level at 12 is disappointing and demonstrates that the distinction of having an all-male board is not enough to motivate these companies to build a gender-diverse board. 

2 July 2019

The three new appointments this quarter were made to Velencia Lee (Sino Land Company), Kathleen Chieh Huey Gan (Hang Seng Bank) and Mary Xuezheng Ma (Hong Kong Exchanges and Clearing). It is notable that the appointment of Kathleen Chieh Huey Gan factored in Hang Seng Bank’s move in the League Table from third to first.

Velencia Lee is the only female appointee who is a first-time board member, showing that unfortunately, the female pipeline of new and upcoming talent is not being effectively tapped when searching for appropriate board candidates. 

There have been some small victories for countries around the globe. Most notably, Singapore and India have overtaken Hong Kong in the rankings for the first time, reporting 15.2% (Singapore) and 14.0% (India) women on their boards. Regionally, Malaysia reports the highest numbers, with 23.2% recorded. Both India and Malaysia have government quotas in place which may go some way to explaining their acceleration in recent years. Singapore, via the government-backed Council for Board Diversity*, has enacted a multi-pronged campaign involving naming-and-shaming, engaging with board decision makers, maintaining a list of female candidates, and showcasing through data the impact on corporate performance. Inspired by this galvanised action, vocal support from male champions at the board level has increased dramatically. All of these factors have led to rapid progress in Singapore, with female board appointments reaching a record high of 24.0% during 2018.

• Previously named ‘Diversity Action Committee’ and starting in January 2019, its scope has expanded to also include statutory boards and non-profit organisations.