Asia ‘falling behind’ on female leaders
Author: Georgi Gyton | Date: 12 Oct 2016
Increased awareness of the importance of gender diversity has not translated into higher numbers of women in the boardroom, say experts
Asia is lagging behind Europe and North America when it comes to gender diversity in the boardroom – and culture, not awareness, is the main reason, according to experts.
The number of female board members in Hong Kong has only marginally increased (by 1.5 per cent) over the past three years, despite a concerted effort to improve gender imbalance in the workplace. Singapore has fared little better, achieving just a 2 per cent rise over the same period.
Community Business’s annual Women on Boards Hong Kong Report, published earlier this year, showed that representation of women on the boards of Hang Seng Index companies remained stagnant at 11.1 per cent in 2015, with two-thirds of companies reporting no improvement. The number of all-male boards has actually increased, with nine out of 10 appointments over the past year being men.
While female representation is a topical issue in all corners of the globe, Hong Kong in particular is struggling to keep up with international counterparts such as the UK, where 26.1 per cent of board members are women and there is a new target for 33 per cent of the boards of the FTSE 350 to be female by 2020. Australia (21.5 per cent) and the US (20 per cent) also outperform Asian economies.
It has led organisations to call for greater efforts to increase the numbers, citing the economic value greater diversity could bring businesses. McKinsey Global Institute (MGI), part of business adviser and counsellor McKinsey & Company, puts the global opportunity of a gender-equal society at $12 trillion, for example.
Speaking at the launch of Community Business’s report, CEO Fern Ngai said it was “extremely disappointing” that no progress had been made over the past 12 months: “The glacial pace of women’s inclusion over the past seven years indicates a lack of recognition of women’s talents and tremendous contribution to the economy, and is a clear indication that there are cultural and institutional barriers that continue to prevent women from advancing to the top.”
She said it was important that Hong Kong overcame inertia on gender issues, and encouraged business leaders to take targeted action.
Su-Mei Thompson, CEO of The Women’s Foundation and founder of the 30% Club Hong Kong, believes that while there is much greater awareness among companies of the issue of gender diversity, “there is a lack of urgency when it comes to implementation”.
One initiative that has been set up to help tackle the problem is the Women’s Directorship Programme, which is designed to help women learn the skills they need to serve on corporate boards. Put together by leadership consulting firm Harvey Nash and The University of Hong Kong Business School, the fifth annual programme of sessions was announced in April.
Kirti Lad, director of Harvey Nash Hong Kong and co-founder of the programme, believes part of the reason Asia is falling behind when it comes to gender diversity is the nature of business structures. Many firms are still family owned and run, and, even when they do recruit, they rarely seek third-party advice.
“They are not doing their due diligence for the best candidates. They are just looking in their own small network – it’s the same names and those individuals are typically male,” says Lad.
It’s not just an issue in Hong Kong and Singapore. Women make up less than 5 per cent of board positions in both India and Japan. In an effort to improve the situation, India introduced a compulsory quota system for listed organisations last year, but this strategy backfired when many chairs appointed underqualified female relatives.
MGI believes the narrow representation of women at the top of the corporate hierarchy is not the only problem. If more women are to reach senior positions, they have to be more numerous in the pipeline that feeds into those positions, it says.
According to the latest data available from The World Bank, there is by no means a consistent pattern when it comes to female labour force participation across Asia. In Cambodia, for example, 79 per cent of women aged 15 years and older were actively engaged in work in 2014, compared to 27 per cent in India, 49 per cent in Japan and 59 per cent in Singapore. This compares to around 56 per cent in the UK and the US.