Gender Diversity: Are We Moving Backwards?

Last Thursday, the World Economic Forum released its 2017 Global Gender Gap Report.

Disappointingly, China's ranking has fallen for the 9th year in a row, this year coming in at 100/144 countries. Key reasons behind this were that women work longer hours in the workplace than men with nearly 50% of female respondents noting that they also engage in unpaid work at home (only 19% of men). Another area of concern is the paucity of women in positions of power, notably among China's legislators, senior officials and managers, and the overall lack of women on boards.

This last point resonates strongly with TWF and our mission to advance women leaders.

As you may remember, last month TWF and the 30% Club highlighted the low numbers of women on Hong Kong listed company boards. At 13.3% Hong Kong lags far behind other international financial centres. Economies with stronger regulations such as Australia and UK have seen marked improvements in female Board representation and are now at 26.7% and 25.4% respectively. The low numbers of women on Boards in Hong Kong is partly due to weak regulations governing Board diversity and is simply not good enough.

We called on Hong Kong Exchanges and Clearing Limited (HKEX) to lead on this issue. We asked HKEX to build stronger and deeper regulatory frameworks in Hong Kong that drive and foster Board gender diversity by requiring companies to focus specifically on gender in their Board diversity policies; to set targets for achieving gender diversity at Board and management level and to set measurable objectives to reach their goals.

Last Friday, HKEX released a Consultation Paper on the Review of the Corporate Governance Code including Board Diversity (Consultation). Whilst HKEX has heard our call for reform, the Consultation is disappointing in scope; focuses only on companies having a general Board diversity policy, includes no gender specific measures nor requires Boards to set measurable objectives to improve. In the Consultation, HKEX also proposes that information accompanying resolutions to elect directors should also include quote (paragraph 54): “.....the perspectives, skills and experience the person is expected to bring to the board and how he would contribute to diversity of the Board”.

Globally, we know there is an increased focus from institutional investors on companies improving their gender diversity. The Institutional Shareholder Services (ISS) is revising its scoring methodology for governance practices and gender diversity has been noted as a top issue. The changes will reward companies for having a higher number and percentage of women on their boards.

TWF and the 30% Club Hong Kong will be issuing our own response to the HKEX Consultation that we will share with you soon. In the meantime, we encourage all of you to read the full version of the Consultation and to respond via the questionnaire here.

Paying lip service to diversity is not enough. The value of diversity to business is no longer a question: it is a fact. When will our regulators step up to drive real change on gender diversity and deliver meaningful results for the good of Hong Kong?

Get in touch at Fiona.Nott@twfhk.org. Have a great week. 

07
11
2017

Written by

The Women's Foundation