Boosting gender diversity at board level should be a top priority throughout Asia

Author: Kate Whitehead | Date: 20 Apr 2016

Nine out of ten new board appointments in Hong Kong last year were men

In Hong Kong, nine out of 10 new board appointments over the last year were men. Many of them were chosen from small personal networks.
 
Gender balance on boards in Asia is lagging behind Europe and North America and steps to close the gap and get more women on boards have seen limited success.
 
To help boost the diversity on boards, the global executive search and leadership consulting firm Harvey Nash and the University of Hong Kong Business School have joined forces to launch the fifth annual Women’s Directorship Programme. It will be held over two three-day sessions in May and September.
 
“The programme is set out to help women get the right skills to serve on corporate boards,” says Kirti Lad, the Hong Kong director of Harvey Nash and co-founder of the programme.
 
In addition to covering the broad topics one would expect to see in a corporate governance programme, such as the roles and responsibilities of board committees, strategic leadership and how to deal with the complexities of ethics and morality from a business context in Asia, the women will also learn about conflict resolution and how to get your point across and influence people when you are a minority.
 
Before setting up the Hong Kong office in 2012, Lad had a long history with Harvey Nash in the UK where diversity is a focus for many companies and there are training programmes for women. She found a very different setup in Asia.
 
“We discovered there were very few programmes women could put themselves on unless they were internal training programmes. There was nothing available for international, senior women and certainly nothing to help women get board-ready,” says Lad.
 
But why is Asia so far behind the curve when it comes to women on boards? Lad says it’s partly due to a different setup. In Hong Kong and Singapore a lot of listed companies are still family owned and run, so the corporate structures are quite different from those in London. Aggravating this issue is the reluctance to use third-party advisors when it comes to searching for new board candidates.
 
“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.
 
Despite three years of work pushing for more women on boards and wider recognition of the issue, Lad says there has been just a 1.5 percent increase in Hong Kong. And in Singapore there has been just a two per cent rise.
 
“It’s a real problem; we are not making anywhere near the level of progress that our counterparts are in other parts of the world,” says Lad.
 
It’s an issue in India and Japan as well, where women make up less than five per cent of board members. Last year India introduced a compulsory quota system for listed organisations, but this strategy backfired when the chairmen of these organisations brought in female relatives to occupy those positions, women who were not qualified or able to add value.
 
The push for more women on boards isn’t just about gender equality – it also makes sound business sense. Numerous studies by respected consulting firms such as McKinsey and Catalyst that show that companies with diverse boards and management teams perform better.
 
According to figures by Credit Suisse, the share prices of large companies with more than US$10 billion capital that had female directors outperformed those without female directors by 26 per cent over seven years. And small to medium-sized companies with female directors on their boards outperformed others over the same period by 17 per cent.
 
“There is a lot of work to be done. Partly it's the process, partly it's the mindset shift that needs to happen, and partly it’s the women themselves,” says Lad.