In partnership with :

Transcription

1 In partnership with :

2 ACKNOWLEDGEMENTS Community Business thanks Heidricks & Struggles for their sponsorship of this Women on Boards Hong Kong 2017 report, the eighth of its kind for Hong Kong. In addition, Community Business acknowledges the contribution of David M. Webb s Webb-site.com, which provides an extensive database of information on companies listed on the Hang Seng Index. This was a valuable tool for validating and updating information obtained from the public domain. Authors: Contributors: Designer: Reviewers: Fern Ngai, Florence Chan and Matthew Yu, Community Business Steve Mullinjer, Karen Fifer, Alain Deniau, Lily Siu and Karen Lau, Heidrick & Struggles, Nishant Gupta Molly Chan, Community Business Fern Ngai, Kate Vernon and Daniela Chang, Community Business DISCLAIMER All information in this document is provided for general information only and is not in the nature of advice. It should not be relied upon for any purpose and Community Business Limited (CBL) makes no warranty or representation and gives no assurance as to its accuracy, completeness or suitability for any purpose. Inclusion of information about a company, programme or individual in this publication does not indicate CBL s endorsement. Where cited, you should refer to the primary sources for more information. This report does not necessarily reflect the view of CBL member companies or the sponsors of this report. CBL reserves the right to make alterations to any of its documents without notice. COPYRIGHT 2017 Community Business Limited. All rights reserved. Reproduction and dissemination of this document (in whole or in part) is not allowed without prior written permission of CBL and due acknowledgement of authorship. If use of this document (in whole or in part) will generate income for the license, prior written permission to that effect must be obtained from CBL. To obtain permission, write to ip@communitybusiness.org.

3 CONTENTS FOREWORD 2 EXECUTIVE SUMMARY 4 INTRODUCTION 7 WOMEN ON BOARDS LEAGUE TABLE: HANG SENG INDEX PART 1: OBSERVATIONS & ANALYSIS General Composition of HSI Boards Profile of HSI Companies Performance of All Companies New HSI Director Appointments to Women Top Performing Companies on HSI (Top 10) HSI Companies with All-Male Boards Female Executive Directorships Women Holding Multiple Directorships Analysis of Age and Tenure Women on Boards Five-year Performance Analysis Glacial Pace of Change An International Comparison Asian Women on International Boards 34 PART 2: CONCLUSION AND RECOMMENDATIONS 38 CALL TO ACTION 40 APPENDIx 41 Women on Boards Five-year Trend 41 REFERENCES

4 FOREWORD Community Business is delighted to share this Women on Boards Hong Kong 2017 report. We appreciate the support of Heidrick & Struggles for both sponsoring and providing important international insights into the issue of gender diversity on public company boards. We are now in our eighth year of producing research on women on Hong Kong boards which was originally based on the UK s reputable Female FTSE Board Report published every year since 1999 by the Cranfield School of Management. We are grateful for their partnership and support when we published our inaugural report in In conducting this year s research, we have been inspired by interviews with selected chairpersons and board directors who generously shared their insights with us. Globally, the call for more diverse corporate boards continues to gain momentum. Board diversity is increasingly being recognised as essential to sound decision-making, more informed risk management, and stronger corporate governance. This has been reinforced by a growing body of international research linking women on boards and in senior management to better corporate performance. Over the last eight years, we have seen nominal improvement in the progression of women at board level in Hong Kong s top public companies. The representation of women has made painstakingly slow improvement from the initial finding of 8.9% in 2009 to 12.4% in 2017, a difference of only 3.5% in 8 years. Frustratingly, change continues to be driven by only a few enlightened companies and the majority of companies are doing little, if anything, to focus on this issue. However, there have been some small successes this year, more Hang Seng Index companies have achieved 20% or higher female representation on their boards, and there has been a further decline in all-male boards. These are positive steps in the right direction. Board diversity may still struggle to make it onto the agenda for much of the business community in Hong Kong, however there is a clear drive for greater awareness and progress that is here to stay. We applaud the collective efforts of Hong Kong Exchanges and Clearing, the 30% Club, leading executive search firms and the media that continue to work with us in our determination for greater gender diversity in the boardroom. We hope that our continued and concerted joint efforts will lead to a positive change in mindsets, attitudes and ultimately behaviours and actions. We at Community Business will continue to champion this important cause by conducting research, stimulating dialogue, increasing understanding, and ultimately, inspire meaningful action by all. Fern Ngai Chief Executive Officer Community Business 2

5 FOREWORD We are delighted to have the opportunity to co-launch Women on Boards Hong Kong 2017 with Community Business. We would like to thank them for allowing us to support their long-term commitment to promoting workplace diversity in Hong Kong and making a positive impact on the local community. As a leadership advisory firm, diversity and inclusion issues are at the heart of what we do, and Heidrick & Struggles is committed to advocating and improving inclusion and diversity both internally and externally. We publish regular board-level papers and management publications to encourage broader discussion around diversity of thinking, board composition and governance. In addition, many of our offices have signed a voluntary code of conduct in support of our commitment to the 30% Club s objectives. We know that as an executive search firm, we have an important role to play in guiding boards and senior management to make more effective and inclusive leadership hiring decisions. Boards with a good mix of nationalities, age groups, gender and cultural backgrounds help companies deliver outstanding value to their increasingly global customers, employees, stakeholders and shareholders. Research suggests that a balanced, diversified workforce adds value to a company s bottom line, leads to better decision-making, leadership and governance, as well as improves an organisation s overall competencies. At Heidrick & Struggles, we leverage the power of diversity in our senior-level searches and board effectiveness programmes. By presenting our clients with a balanced mix of potential candidates, we hope to help further enhance their general competitiveness. Despite the importance of gender diversity at board level, progress has been slow in Hong Kong and Asia Pacific compared to other regions. Two ongoing issues are whether capable female leaders are being promoted to board positions, and if there is a big enough pool of senior female leaders who are board-ready. Interestingly, our observations show that capable Asian women are taking up directorships on international boards, providing unique Asian perspectives to support organizations global strategies (see chapter 1.13). With this report, we hope to continue raising awareness about diversity among leading corporations in Hong Kong and the Asia Pacific region, and provide insights into how boards today can evolve to new heights by embracing diversity. We hope you enjoy this report! Steve Mullinjer Regional Leader Heidrick & Struggles, Asia Pacific 3

6 EXECUTIVE SUMMARY In this Women on Boards Hong Kong 2017 report, Community Business examines the representation of women on the boards of Hong Kong s leading companies. As in previous years, this study provides a detailed analysis of the performance of Hong Kong s top 50 companies as listed on the Hang Seng Index (HSI), tracking trends since 2009 when this research was first conducted. In addition, this year, the scope of the research has been extended to include a review of the last five years to assess in more depth whether companies on the HSI are truly making a concerted effort to increase gender diversity on their boards. Good News After a disappointing year in 2015 where the percentage of women on HSI boards stagnated at 11.1%, there has been a modest increase in the representation of women to 12.4%, with 78 women out of 628 directorships in total. This is an increase of seven additional female directorships in Directorships For the first time one-fifth of companies have at least 20% women on their boards For the first time since our campaign started in 2009, 10 companies, or one-fifth of the HSI companies, have reached 20% or more female representation on their boards. This is an important milestone in light of the recent target set by the 30% Club Hong Kong to increase the percentage of women directors on all HSI company boards to 20% by 2020 and the long-term goal of 30%. Further reduction in all-male boards This year, the number of HSI boards with zero women has dropped from 16 to 11, continuing the general downward trend since However this drop has been helped by the fact that two companies with all-male boards are no longer constituents of the HSI. Figure 2: Trend of All-Male HSI Boards ( ) 33.3% (14) 41.7% (20) 38.0% (19) 25.0% (12) 20.0% (10) % and (number) of companies with all-male boards 32.0% (16) 28.0% (14) 18.0% (9) 14.0% (7) 32.0% (16) 14.0% (7) % and (number) of companies which have never had female directors Decline in number of boards which have never had female directors 22.0% (11) % (4) Each year, we also report on the number of HSI companies which have never appointed women to their boards. It is positive to note that in 2017, the number has reduced from seven to four, continuing the positive downward trend since 2012 which had as many as 12 companies that have never had women on their boards. Both of these sets of findings are in line with the 30% Club Hong Kong target of zero all-male HSI boards by the end of However, there is still some way to go to achieve this target within the next two years and it will require a significant step up in appointments of women to these boards. Figure 1: Percentage of Women on HSI Boards ( ) 8.9% 52/ % 57/ % 61/ % 64/ % 73/ % 71/ % 78/

7 Not So Good News Despite a slight increase in the percentage of women on HSI boards in the past year and a reduction in the number of all-male boards, progress remains very slow. This raises the question of whether gender diversity is on the agenda of HSI companies and in addition to looking at their boards, what active steps companies are taking internally to create an enabling environment for women to advance to senior positions. No change in number of women in top companies The actual number of female directors in the top 10 companies with the highest representation of women on their boards has remained stagnant at 37 since Rate of new appointments to women failing to accelerate Throughout the last year, there were 80 new appointments to the boards of HSI companies, of which a minority of only nine (11.3%) were women. This pales in comparison to the appointment of 71 (88.7%) men during the same period. A further examination of this year s data is also not encouraging: Progress is driven primarily by the actions of a few. Only four out of 50 companies have made concrete progress to raise the representation of females on their boards by appointing additional women. Over two-thirds of HSI companies show no improvement in the representation of women on their boards. The rate of female executive directors has continued to stall over the past eight years, with the total number having only grown by four since we began our research in An executive director is a member of the board who is also an employee of the company. This is a significant metric as it indicates the extent to which the corporate environment and culture is supportive of women, enabling them to successfully rise up to the top of the organisation, including board level. A company s executive committee can be seen as a talent pool for the appointment of executive directors who have an in-depth understanding of the business and who could contribute to decision-making at the board level. There has been an increase in women holding multiple directorships which has risen to an all-time high since we began our research in The majority of women on HSI boards (56 women) hold only one directorship while eight women hold the remaining 22 directorships. This compares to six women holding multiple directorships in Most of these eight women are also directors of non-hsi listed boards and/or international boards, and some hold full time roles in the corporate sector. Notwithstanding the question of bandwidth for these women, companies do not appear to be tapping into the wider talent pool of potential female directors, including those who currently hold only one directorship and women who have not yet served on any corporate board. Performance on a five-year horizon Until this year, our annual Women on Boards research has based its findings on a snapshot of the 50 HSI boards as at 2 January each year, providing a year-on-year comparison. On an individual company level, we know that a company s percentage of female directors can be affected by a number of factors, including mergers and acquisitions, fluctuation in board size, as well as timing and number of female appointments. This year, we have expanded our research to include an analysis of the performance of individual companies over a five-year span, with the aim of uncovering whether they are truly making a concerted effort to increase the representation of women on their boards. To gain a more holistic view, and to look beyond the numbers, we also reviewed qualitative information such as the published board diversity policies of each company as well as programmes and initiatives that support the advancement of women within the company. In addition, we had the opportunity to interview a number of chairpersons and board directors for invaluable insights. Looking at the last five years, four HSI companies stand out as being highly committed to increasing the gender diversity of their boards and to making meaningful efforts within their companies to support the advancement of women to senior roles. In alphabetical order, they are CLP Holdings, HSBC Holdings Plc, Link Real Estate Investment Trust (REIT), and MTR Corporation. We have also acknowledged the performance of a number of other companies, although information on their internal efforts to drive gender diversity is not available from public sources. 5

8 Hong Kong continues to lag behind global counterparts From 2013, the Hong Kong Stock Exchange has progressively introduced measures to strengthen Hong Kong s Corporate Governance Code, Listing Rules, and ESG Reporting requirements to be more in line with international best practice. This includes introducing requirements for a board diversity policy and gender disclosures. These are all positive changes to improve corporate governance and increase transparency. Unfortunately, they do not seem to be effective in substantially moving the needle for women on boards in Hong Kong. While Hong Kong performs better than most of its Asian counterparts, it is falling further behind other developed markets which have been experiencing substantial increases of women on boards, in most cases without the use of mandated quotas. Outside of Hong Kong, these improvements can be attributed to continued international attention on the subject of women on boards and efforts by governments to step up regulatory changes such as stricter corporate governance polices, reporting requirements, and in some cases, the introduction of quotas. Key stakeholders who have been keeping the focus on the topic include the 30% Club which now has a presence in 10 countries globally, organisations that are building up lists of director candidates such as DiversityDirectory Asia Pacific, executive search firms, and institutions offering directorship development programmes. While progress is disappointingly slow on Hong Kong s listed boards, it is interesting to note that there seems to be a growing trend for international boards to appoint Asian women, including Hong Kong women, to their boards. These companies clearly see Asia as a critical growth market and are keen to find directors with first-hand knowledge and experience in Asia. To Conclude Analysis of the latest numbers of women on the HSI boards provides a mixed picture. While there are certainly signs of improvement, closer examination reveals that this is the result of the actions of a few companies and that the majority of companies are still doing very little, if anything, to increase the number of women on their boards. It appears that Hong Kong s business leaders still fail to appreciate the business case and are ignoring the global attention on this topic and the international and local calls for action. The findings clearly show that there continues to be both cultural and structural barriers facing women denying them full participation in Hong Kong s economic growth and excluding them from key decision-making positions. Community Business is recognised as a thought leader on diversity and inclusion in Asia and a champion of greater diversity not only in the boardroom but at all levels of organisations. We contend that for companies to navigate and be successful in today s complex global business environment, they need to build strong boards comprising of diverse individuals who can bring a variety of skills and represent different perspectives. Gender is a fundamental and critical aspect of diversity that cannot be overlooked not least because it is a very tangible measure by which companies can assess the extent to which their boards are diverse. Companies which fail to address gender diversity, or simply allow it to evolve over time as a by-product of broader diversity measures, run the risk of losing relevance to their key stakeholders, including customers, employees, and investors. Ultimately, this will impact a company s long term performance. With all this in mind, this year s findings further reinforce the need to continue our focus on Hong Kong s boards as it is clear that our work is far from done. 6

9 IntroduCtion Community Business has long championed the role of women in the corporate arena in Asia. From the publication of one of our earliest reports, Women Leaders in Hong Kong 1 in 2005 to our successful series of the Gender Diversity Benchmark for Asia 2 in 2009, 2011 and 2014 respectively, Community Business has presented the case that women have an essential contribution to make to business but remain under-represented at senior levels of their organisations. In September 2009, Community Business partnered with Cranfield School of Management in the UK to produce the inaugural Women on Boards: Hang Seng Index 2009 report, sponsored by Standard Chartered. This was followed in September 2010 by the publication of the Standard Chartered Bank: Women on Corporate Boards India 2010 report, and the annual Women on Boards Hong Kong report since In 2013, Community Business published the how to guide Improving Governance through Board Diversity and the research report Board Diversity in Hong Kong Directors Perspectives These publications have been widely referenced as a means of initiating and progressing the dialogue around the benefits of greater gender diversity on boards in Asia as well as a wider discussion about the advancement of women in the region. We are now into our eighth year of putting the spotlight on the subject of women on boards in Hong Kong. With a lack of female representation at senior levels, companies are not only denying their organisations valuable talent, but also limiting their ability to reflect the needs and interests of their customers and shareholders and therefore restricting their financial performance. This is why our continued efforts to raise awareness and call to action to the companies that still have no women on their boards, is all the more important. Another new consideration has been the introduction of targets for Hong Kong HSI companies to collectively reach 20% women on their boards by 2020, working toward a long-term goal of 30%, and to reduce the number of all-male boards to zero by the end of These goals were announced by the 30% Club Hong Kong in October 2016, following similar moves by the USA, the UK and Australia in setting and promoting goals for companies to work towards. Methodology As in previous studies, this research looks at the representation of women on the boards of companies listed on the HSI. The HSI is a free float-adjusted market capitalisation-weighted stock market index in Hong Kong. It includes the largest and most liquid stocks listed on the Main Board of the Hong Kong Stock Exchange. It is used to record and monitor daily changes in the largest companies of the Hong Kong stock market and is the main indicator of the overall market performance in Hong Kong. As at 2 January 2017, there were 50 HSI constituent stocks in total. In this research we examine gender diversity on the boards of Hong Kong s leading companies by looking at the following: 1. Analysis of HSI: This looks at the representation of women on the boards of the 50 companies listed on the HSI. 2. Analysis of five-year performance of HSI companies: We looked at the performance of individual HSI companies on a longer time horizon along with some qualitative information to determine whether they are indeed making a concerted effort to increase the gender diversity of their boards. 3. Interviews with directors and chairpersons: We invited a cross section of Directors and Chairpersons to share their insights on board diversity and views on the topic of women on boards. In collating the data for this research, Community Business has adopted a consistent methodology to previous years. Data was collected from David M. Webb s proprietary database on Webb-site.com with a data cut-off of 2 January 2017 and analysed by Community Business. It should be noted that the data does not reflect changes either pre-announced or otherwise, after that date. The period of data collection, ie. when examining appointments made or actions taken in the last year, specifically refers to the period 3 January 2016 to 2 January 2017 inclusive. To analyse the five-year performance of the HSI companies, we collected data from the companies directly and through publicly available sources, including corporate website, annual reports, and news articles. 7

10 Changes Since the Previous Report This report presents the current picture of women on the boards of the top companies in Hong Kong as listed on the HSI. The aim is to raise awareness of gender diversity at board level as a business issue and encourage business leaders to think about the compositions of their boards so that they may more accurately reflect the marketplaces and stakeholders that they serve. Up to now, our annual Women on Boards report has based its findings on a snapshot of the 50 HSI boards as at 2 January each year, with a year-on-year comparison. On an individual company level, we know that a company s percentage of female directors can be affected by a number of reasons, including mergers and acquisitions and fluctuation in board size, as well as the timing and number of appointments to women. This year, we have expanded our research to include an analysis of the performance of individual companies over a five-year span, with the aim of uncovering whether they are truly making a concerted effort to increase the women on their boards. To gain a more holistic view, in addition to the numbers, we also looked at qualitative information such as the published board diversity policies of each company as well as programmes and initiatives that support the advancement of women within the company. Another change to the report is the inclusion of sound bites and highlights from interviews with a number of key figures that include local and international directors and chairpersons providing insights into their views on board diversity, the business case, and their thoughts about the current and future state of gender diversity in senior leadership in Hong Kong. 8

11 Nicholas Allen CHAIRPERSON Link Real Estate Investment Trust What are your aspirations and vision for the diversity of Link REIT s board? As a Chairman, my approach to gender diversity is to focus on the number of female directors not the percentage thereof. We currently have four female directors and I believe this brings a stimulating level of diversity to board discussions and points-of-view. I would be very happy to increase in the number of female directors over time of course provided our needs as to specific skill sets and experience are also met. How important is board diversity to you and Link REIT? It certainly is key to the effectiveness of our board. We live in a fast changing environment, where having a broad based view is highly critical to coming up with sensible new stances and facilitating teamwork. Compared to what boards used to face 20 years ago, today s issues are not all black and white, for example, how the company addresses Sustainable Development Goals, CSR and sustainability where measurements are not conventional. By taking into account all the possibilities, a diverse board allows us to come to appropriate decisions. I believe one of the reasons why Link REIT s board is more diverse is that we have a programme of engaging executive search firms to source our directors. We enter into multi-year relationships with executive search firms which means that we do not engage them for a particular directorship each time we look for a director but have their ongoing input as to what skills we need - what skills are required now and for the future. This enables a pathway to set a clear standard for diversity. Another point to add is that our Nomination Committee process is as a consequence possibly more vigorous than in any other organisations I ve seen, which helps with driving board diversity. Why are there still so few women on the boards of Hong Kong listed companies? Perhaps unlike other jurisdictions in Hong Kong, there doesn t seem to be much stigma or embarrassment if a board lacks gender diversity. In addition in Hong Kong, the nets in which people fish to find new board directors tend to be more male dominated. This is further exacerbated by the small size of the potential population that exists here. Different industries tackle this issue in different ways. For example, some organisations look at their intake of candidates which enables gender diversity to be more manageable. Women make up more than half of the graduates who join professional services, such as accounting, which represents a large pool of female talent. The question is, how do we develop a pipeline to get these women to eventually take on more senior roles. Looking to the future, although there is a large pool of female talent in Hong Kong, it is important to note that there is also the need to look beyond Hong Kong as well. For example, CLP appointed a female director from India because her knowledge and expertise was relevant to the company s business in India and at the same time to introduce an international perspective. The 30% Club Hong Kong has set a target of 20% by In your opinion, how achievable is this in Hong Kong? It certainly is doable, but it really depends on how actual appointments are facilitated. There is a clear appetite for director diversity, however, this depends on whether there is a sufficient pool that is visible and being looked at. What is your advice for increasing board diversity? Headline measures are important and once the targets have been set, it is important for there to be measurements in place, along with visible presentation of the hard data. For appointing female directors, I think it is important to look at both the non-executive directors and executive directors. My advice to those starting the journey to increasing the diversity of their board would be to use executive search firms who can provide an impartial and clearly focused look at candidates. Without the engagement of executive search firms, it would be a struggle to do a thorough and inclusive consideration of a wider pool of candidates and it would be a struggle to make real change. 9

12 WOMEN ON BOARDS LEAGUE TABLE: HANG SENG INDEX Rank YOY % of Women Board Size No. of Women Stock Code Company Female Directors Chairperson 1 q 30.8% Link Real Estate Investment Trust 領展房地產投資信託基金 2 p 30.0% China Resources Power Holdings Company Ltd 華潤電力控股有限公司 2 q 30.0% HSBC Holdings Plc 滙豐控股有限公司 4 N.A. 28.6% AAC Technologies Holdings Inc. 瑞聲科技控股有限公司 5 N.A. 25.0% Cheung Kong Infrastructure Holdings Ltd 長江基建集團 6 q 23.5% Hang Seng Bank Ltd 恒生銀行有限公司 % Clp Holdings Ltd 中電控股有限公司 7 q 21.4% Cheung Kong Property Holdings Ltd 長江實業地產有限公司 9 q 21.1% MTR Corporation Ltd 香港鐵路有限公司 10 p 20.0% CK Hutchison HOLDINGS Ltd 長江和記實業有限公司 11 q 18.8% CITIC Ltd 中國中信股份有限公司 12 q 16.7% The Wharf (Holdings) Ltd 九龍倉集團有限公司 12 q 16.7% Bank Of Communications Co Ltd 交通銀行股份有限公司 14 p 15.4% Swire Pacific Ltd 太古股份有限公司 14 q 15.4% Hong Kong Exchanges And Clearing Ltd 香港交易及結算所有限公司 % New World Development Company Ltd 新世界發展有限公司 16 q 14.3% China Construction Bank Corporation 中國建設銀行股份有限公司 16 p 14.3% Industrial And Commercial Bank Of China Ltd 中國工商銀行股份有限公司 19 q 12.5% Galaxy Entertainment Group Ltd 銀河娛樂集團有限公司 19 q 12.5% Li & Fung Ltd 利豐有限公司 19 p 12.5% China Overseas Land & Investment Ltd 中國海外發展有限公司 19 p 12.5% China Unicom (Hong Kong) Ltd 中國聯合網絡通信 ( 香港 ) 股份有限公司 19 p 12.5% Sands China Ltd 金沙中國有限公司 Tan, May Siew Boi 陳秀梅 Tan, Poh Lee 陳寶莉 Tse, Nancy Sau Ling 謝秀玲 Young, Elaine Carole Leung, Elsie Oi Sie 梁愛詩 Wang, Xiao Bin 王小彬 ** Zhou, Junqing 周俊卿 ** Casey, Kathleen Louise Cha Shih, Laura May Lun 史美倫 Lee, Irene Yun Lien 利蘊蓮 Lomax, Janis Rachel 駱美思 Miller, Heidi van der Meer Mohr, Pauline Chang, Carmen I Hua 周一華 Wu, Ingrid Chunyuan 吳春媛 Chen, Tsien Hua 陳建華 *** Kwok Lee, Eva 郭李綺華 Lee Wong, Angelina Pui Ling 李王佩玲 Sng, Sow Mei (aka Phoon Sui Moy, aka Poon Sow Mei) 孫潘秀美 Chiang, Lai Yuen 蔣麗苑 (aka 蔣麗婉 ) Lee, Irene Yun Lien 利蘊蓮 Lee, Rose Wai Mun 李慧敏 ** Legg, Sarah Catherine 李瑞霞 Law Fan, Fanny Chiu Fun 羅范椒芬 Lee, Irene Yun Lien 利蘊蓮 Mody, Zia Hung, Katherine Siu Lin 洪小蓮 Pau, Ezra Yee Wan 鮑綺雲 ** Woo, Grace Chia Ching 吳佳慶 ** Chan Wong, Pamela Shui 陳黃穗 Chan Yuen, Dorothy Tak Fai 陳阮德徽 Li Li, Lucia Ka Lai 李李嘉麗 Yeung Ho, Ingrid Poi Yan 楊何蓓茵 Chow Woo, Susan Mo Fong 周胡慕芳 Lee, Rose Wai Mun 李慧敏 Tam Wong, Rosanna Yick Ming 譚王䓪鳴 Shih, Edith 施熙德 *** Lee, Boo Jin 李富眞 Li, Qingping 李慶萍 ** Yan, Shuqin 嚴淑琴 * Lee, Doreen Yuk Fong 李玉芳 ** Leng, Yen Thean 凌緣庭 ** Li, Jian 李健 Wong, Helen Pik Kuen 黃碧娟 * Yu, Yali 于亞利 ** Lee, Rose Wai Mun 李慧敏 Yang, Marjorie Mun Tak 楊敏德 Fung, Anita Yuen Mei 馮婉眉 Leung Ko, Margaret May Yee 梁高美懿 Cheng, Sonia Chi Man 鄭志雯 ** Ki, Leonie Man Fung 紀文鳳 ** Hao, Aiqun 郝愛群 Fung, Anita Yuen Mei 馮婉眉 * Ge, Rongrong 葛蓉蓉 Wang, Xiaoya 汪小亞 Tang Lui, Paddy Wai Yu 呂慧瑜 ** Leung Ko, Margaret May Yee 梁高美懿 Fan Hsu, Rita Lai Tai 范徐麗泰 Law Fan, Fanny Chiu Fun 羅范椒芬 Chiang, Rachel Yun 張昀 Allen, Nicholas Charles 聶雅倫 Zhou, Junqing 周俊卿 Flint, Douglas Jardine 范智廉 Koh, Boon Hwee 許文輝 Li, Victor Tzar Kuoi 李澤鉅 Ch'ien, Raymond Kuo Fung 錢果豐 Kadoorie, Michael David 米高嘉道理 Li, Ka Shing 李嘉誠 Ma, Frederick Si Hang 馬時亨 Li, Ka Shing 李嘉誠 Chang, Zhenming 常振明 Ng, Stephen Tin Hoi 吳天海 Niu, Ximing 牛錫明 Slosar, John Robert 史樂山 Chow, Chung Kong 周松崗 Cheng, Henry Kar Shun 鄭家純 Wang, Hongzhang 王洪章 Yi, Huiman 易會滿 Lui, Che Woo 呂志和 Fung,William Kwok Lun 馮國綸 Xiao, Xiao 肖肖 Wang, Xiaochu 王曉初 Adelson, Sheldon Gary 10

13 2017 Rank YOY % of Women Board Size No. of Women Stock Code Company Female Directors Chairperson 24 q 11.8% Ping An Insurance (Group) Company Of China Ltd 中國平安保險 ( 集團 ) 股份有限公司 25 q 11.1% China Shenhua Energy Company Ltd 中國神華能源股份有限公司 25 p 11.1% Henderson Land Development Company Ltd 恒基兆業地產有限公司 27 q 10.0% Hang Lung Properties Ltd 恒隆地產有限公司 27 q 10.0% AIA Group Ltd 友邦保險控股有限公司 29 q 9.1% Sino Land Company Ltd 信和置業有限公司 % Lenovo Group Ltd 想集團有限公司 % Belle International Holdings Ltd 百麗國際控股有限公司 29 q 9.1% China Mengniu Dairy Company Ltd 中國蒙牛乳業有限公司 % BOC Hong Kong (Holdings) Ltd 中銀香港 ( 控股 ) 有限公司 29 p 9.1% China Life Insurance Company Ltd 中國人壽保險股份有限公司 35 p 7.7% China Merchants Port Holdings Company Ltd 招商局港口控股有限公司 35 q 7.7% Hengan International Group Company Ltd 恆安國際集團有限公司 37 q 6.3% Cathay Pacific Airways Ltd 國泰航空有限公司 38 p 5.9% The Bank Of East Asia Ltd 東亞銀行有限公司 39 q 5.6% Sun Hung Kai Properties Ltd 新鴻基地産發展有限公司 40 q 0.0% Tencent Holdings Ltd 騰訊控股有限公司 40 q 0.0% CNOOC Ltd 中國海洋石油有限公司 40 q 0.0% China Mobile Ltd 中國移動有限公司 43 q 0.0% The Hong Kong And China Gas Company Ltd 香港中華煤氣有限公司 43 q 0.0% Kunlun Energy Company Ltd 昆侖能源有限公司 45 q 0.0% China Petroleum & Chemical Corporation 中國石油化工股份有限公司 46 q 0.0% Power Assets Holdings Ltd 電能實業有限公司 47 q 0.0% Petrochina Company Ltd 中國石油天然氣股份有限公司 47 q 0.0% Bank Of China Ltd 中國銀行股份有限公司 49 q 0.0% Want Want China Holdings Ltd 中國旺旺控股有限公司 49 q 0.0% China Resources Land Ltd 華潤置地有限公司 p Higher ranking than in 2016 q Lower ranking than in Same ranking as in 2016 ** Female Executive Directors * New appointees Companies with purple shading denote they are newly admitted to the Hang Seng Index Cai, Fangfang 蔡方方 ** Lin, Lijun 林麗君 Fan Hsu, Rita Lai Tai 范徐麗泰 Fung Lee, Woon King 馮李煥琼 ** Lee Wong, Angelina Pui Ling 李王佩玲 Fung, Anita Yuen Mei 馮婉眉 Teo, Swee Lian Ip, Alice Mo Lin 葉慕蓮 ** Ma, Mary Xuezheng 馬雪征 Hu, Xiaoling 胡曉玲 Wu, Wenting 吳文婷 *** Cheng, Eva 鄭汝樺 Leung, Elsie Oi Sie 梁愛詩 * Shi, Wei 時偉 *** Wong, Ada Ying Kay 黃英琦 Lee, Irene Yun Lien 利蘊蓮 Fan Hsu, Rita Lai Tai 范徐麗泰 * Leung Ko, Margaret May Yee 梁高美懿 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Ma, Mingzhe 馬明哲 Zhang, Yuzhuo 張玉卓 Lee, Shau Kee 李兆基 Chan, Ronnie Chi Chung 陳啟宗 Tse, Edmund Sze Wing 謝仕榮 Ng, Robert Chee Siong 黃志祥 Yang, Yuanqing 楊元慶 Tang, Yiu 鄧耀 Ma, Jianping 馬建平 Tian, Guoli 田國立 Yang, Mingsheng 楊明生 Li, Xiaopeng 李曉鵬 Sze, Man Bok 施文博 Slosar, John Robert 史樂山 Li, David Kwok Po 李國寶 Kwok, Raymond Ping Luen 郭炳聯 Ma, Pony Huateng 馬化騰 Yang, Hua 楊華 Shang, Bing 尚冰 Lee, Shau Kee 李兆基 Huang, Weihe 黃維和 Wang, Yupu 王玉普 Fok, Canning Kin Ning 霍建寧 Wang, Yilin 王宜林 Tian, Guoli 田國立 Tsai, Eng Meng 蔡衍明 Tang, Yong 唐勇 11

14 PART 1: OBSERVATIONS & ANALYSIS 1.1 General Composition of HSI Boards To set the context for the examination of the representation of women on boards in Hong Kong, Table A shows the number of companies listed on the HSI has remained constant at 50 since Two companies: Tingyi (Cayman Islands) Holding Corporation and China Resources Beer (Holdings) Company have left the HSI in 2016, with two new company listings on the HSI: AAC Technologies Holdings and Cheung Kong Infrastructure Holdings. Cheung Kong Infrastructure Holdings is a new company listing and should not be confused with similarly named Cheung Kong Holdings and also CK Hutchison Holdings. Both these companies joined the HSI in 2015 following a restructure that saw the delisting of Hutchison Whampoa and Cheung Kong from the Hong Kong Stock Exchange in Table A presents some high level statistics on the composition of the 50 HSI company boards. The table shows that between 2009 and 2014 the number of total directorships increased each year, but since that time there has been a gradual reduction to the current 628 directors. In line with this, the average board size increased to a peak of 13.4 in 2014, and then reduced to the current average of 12.6 directors in The table also looks at the split between Executive Director (ED), Non-Executive Director (NED) and Independent Non-Executive Director (INED) roles from 2009 to Over the last eight years, the number of executive directors has remained fairly flat while the mix of non-executive directors (independent and non-independent) has seen slight fluctuations, likely partly due to the requirement for listed companies to have at least one third of directorships to be independent which became effective from end Table A: Composition of the 50 HSI Boards ( ) No. of Companies Total Directorships Average Board Size Executive Directors 214 (36.6%) 223 (35.2%) 216 (33.3%) 226 (33.8%) 212 (32.4%) 216 (33.9%) 214 (34.1%) Non-Executive Directors (NEDs) 150 (25.6%) 164 (25.9%) 164 (25.3%) 173 (25.9%) 158 (24.1%) 148 (23.2%) 140 (22.3%) Independent NEDs 221 (37.8%) 247 (39.0%) 269 (41.4%) 269 (40.3%) 285 (43.5%) 274 (42.9%) 274 (43.6%) 12

15 1.2 Profile of HSI Companies The HSI is divided into four sub-indices: the Hang Seng Commerce & Industry Sub-Index, the Hang Seng Finance Sub-Index, the Hang Seng Properties Sub-Index and the Hang Seng Utilities Sub-Index. The distribution of the 50 companies across these sub-indices is shown in Figure 3 below. Compared to 2009, this year there is a 4% reduction in the proportion of companies from the Commerce & Industry sector. The Utilities sector has remained relatively constant as has the Finance sector, representing a quarter of all companies on the HSI. The Properties sector has risen from 14% in 2009 to 20% in Figure 3: Distribution of HSI Companies by Sub-Index ( ) % (4) 10% (5) 14% (6) 20% (10) 26% (11) 24% (12) 50% (21) 46% (23) 1.3 Performance of All Companies The following table summarises the performance of all HSI companies in terms of the gender diversity of their boards since Out of a total of 628 directorships on the HSI, 78 directorships are held by women, representing 12.4%. 628 Directorships Figure 4: Percentage of Women on HSI Boards ( ) % (5) Utilities 20% (10) Properties 24% (12) Finance 46% (23) Commerce & Industry 11.1% 11.1% 73/655 71/ % 9.4% 64/668 61/ % 8.9% 57/634 52/ % 78/ Table B: Summary of HSI Companies ( ) Companies with No. % No. % No. % No. % No. % No. % No. % At least 1 female director % % % % % % % Multiple female directors % % % % % % % All-male boards % % % % % % % Female executive directors Female non-executive directors % % % % % % % % % % % % % % Female CEOs 1 2.4% 1 2.1% 1 2.0% 1 2.0% 2 4.0% 2 4.0% 1 2.0% No. of women holding multiple directorships 4 8.5% % % % 5 7.8% % % 13

16 One-fifth of companies have reached 20% In October 2016, in a drive to speed up gender diversity in the boardroom and urge companies to catch up with global counterparts, the 30% Club Hong Kong set a target of 20% women directors on HSI boards by This year is the first time one-fifth of companies (20%) have at least 20% female directors on their boards. Progress driven by a few companies Out of 14 HSI companies that had an increase in the percentage of women on their boards, only four actually increased the number of female directors during 2016: 1. CK Hutchison Holdings Ltd 2. China Life Insurance Company Ltd 3. China Merchants Port Holdings Company Ltd 4. The Bank of East Asia Ltd The remaining 10 companies achieved an increase in the percentage of women on their boards simply as a result of a reduction in board size in Although these organisations may have deliberately chosen to retain women over men during this period, we cannot be certain that they took specific actions to promote gender diversity on their boards. Twenty-three out of 50 HSI companies have seen no increase in the percentage of women on their boards in the last year. In addition, 11 companies saw the percentage of women on their boards drop, including: AIA Group, Bank of Communications, China Construction Bank, China Mengniu Dairy, China Shenhua Energy, CITIC, Hang Seng Bank, HSBC, Link REIT, Sino Land and Sun Hung Kai Properties. Some companies have not improved their overall performance even with the appointment of additional women to their board in This can be attributed either to an increased board size or the appointment of more men than women which has counter-balanced the positive impact of adding more women. Lastly, excluding the two new entries on the HSI, 70.8% (34 out of 48) of companies have seen no improvement in the gender diversity of their boards in the last year. Figure 5: Performance of Companies Compared to Previous Year (Excluding New HSI Entries) No. of Companies % of Total Companies Increase in % of Women % No Change in % of Women % Decrease in % of Women % No Improvement 34 Companies (70.8%) 14

17 Very few female CEOs It is disheartening to see that throughout the last eight years, there has been a glaring absence of female CEOs in the HSI companies, with only one or two at any time. Hang Seng Bank continues to be the only company on the HSI with a female CEO Rose Lee. The only other female CEO in the last eight years has been Sun Yiping at China Mengniu Dairy Company Ltd for two years in 2015 and However, in Hong Kong, the banking sector is leading the way when it comes to appointing female CEOs. Two out of three of the city s note-issuing banks, ie HSBC and Standard Chartered, have women at the helm. The majority of these banks with female CEO s are either not constituents of the HSI and therefore not on our Women on Boards Hong Kong 2017 League Table or their local entity is not listed on the Hong Kong Stock Exchange. These include, in alphabetical order by company name: Ivy Au-Yeung Australia and New Zealand Banking Group Ltd Hong Kong HSBC has given me and many other women in senior management great opportunities and a truly meritocratic environment in which to develop our careers. We are proud to provide an open, supportive and inclusive workplace where people can grow and achieve their potential. Our commitment to diversity and inclusion helps us attract, develop and retain the best employees. And it brings benefits for our customers, our business and our people. We continue to address gender representation to ensure that talented women have the opportunities and support they need to progress to senior management. Diana Cesar Chief Executive, HSBC Hong Kong Margaret Leung Maaike Steinebach Rose Lee Diana Cesar May Tan Chong Hing Bank Ltd Commonwealth Bank of Australia (Hong Kong) Hang Seng Bank Ltd HSBC Hong Kong (Subsidiary of HSBC Holdings Plc) Standard Chartered Bank (Hong Kong) Limited (will be succeeded by Mary Huen effective March 2017) Christine Ip United Overseas Bank Limited Hong Kong 15

18 Carmen Chang INDEPENDENT NON-EXECUTIVE DIRECTOR AAC Technologies Holdings Inc. How important is board diversity to you? The more different perspectives that you have, the better it is for the company, so board diversity is very important in my view. The challenge often is how to show board diversity benefits a company financially and in particular, how it directly correlates with the bottom line. Our company is very committed to gender diversity. When I was being interviewed for a director role, I felt that Ingrid (the co-founder) was very enthusiastic in getting more women onto the board and this motivated me to join their board. Why are there so few women on boards? In Asian family-run businesses, women generally may not step up to become leaders, due mainly to cultural norms. These women typically stay in the background while their husbands and sons are the official leaders of the business. This does not mean they do not hold power and capability which should be brought to the forefront. Also I feel that in Asia, there is still the issue of women being perceived differently to men - that when a woman speaks her mind, she may be seen as loud and pushy whereas men are seen as showing leadership qualities. Similarly, men are more inclined and encouraged to show their achievements and go for senior executive roles whereas women are less likely to actively promote themselves and are less likely nurtured into executive roles. This needs to change. What can be done to increase women on boards? Firstly, it is important to put pressure on the shareholders and stakeholders of the company. Secondly, to appoint more female executive directors, executive directors hold considerable power and can assert much greater influence in board decision making so I think it is important to have women who are key figures of a company such as the CEO or CFO. This is where greater change will be brought about because they can help bring more women onto the board. Hong Kong shareholders think differently to shareholders of international companies. It is interesting to note the shareholders based in Hong Kong think differently to international boards. There needs to be more pressure put on them to promote growth of women in senior leadership. I am a partner of a venture capital firm and it is important to note that there are more women in Asia leading the venture capital industry then there are in the US. What is crucial is how to build on the presence of these women once these companies become listed and enter their next stage of development. We need women to transition as their company grows. The tech industry is one in which women can fight for this. I believe the great work of organisations like Community Business helps to promote awareness and it is important to keep the dialogue going. We need mentorship and training programmes for women to progress into senior leadership. Finally, executive search firms play an active role in identifying female candidates for board roles. How do female directors add value to the board? Being a woman, I believe that there are certain unique things that women bring to a situation. For example, I am very sensitive to what consumers want to use or experience. Also in terms of the dynamics of relationships such as on the board, I bring greater sensitivity to thinking about different people s perspectives. Women can be more conscious of responsibilities such as minimising impact to the environment and I feel that applies to me as well. 16

19 Executive search firms have noticed increased demand in Asian/Hong Kong women for international board roles. What are your views on why this may be happening? I have noticed that there has been an increase in the number of MNCs that are looking to get more Asian women on their boards. It is important to note that many venture capital companies in China have more women at senior levels than in the US. These are also early stage companies that progress on to become listed public companies so we should see more women progressing to listed company board level. In the US, the focus is on searching for the right talent and the use of executive search firms is quite commonplace. I feel this is not yet the case for Asia. We need more exposure to the available female talent in Asia and to have multiple reference points for companies to think more about choosing women. In Asia, it would be good to engage these companies to discuss how they can look within their own ecosystems and networks for potential female talent. I believe that this will help increase the representation of women on Asian boards. What advice would you give to aspiring women looking to take on senior leadership roles and to get on boards? I would say that developing invaluable skills and experience is crucial. I was a lawyer for many years specialising in corporate governance, looking at conflicts of interest and dealing with both western and Asian companies. It is important to build your talent and become an invaluable asset to your company and work your way to the executive level. Also, I believe it is important to build strong professional relationships and a robust network for developing an ecosystem that you can call upon and depend on. AAC Technologies has benefited from my skillset, my wealth of experience and also from important introductions and connections I have been able to provide. 17

20 1.4 New HSI Director Appointments to Women In the last year, of the 80 new appointments made to the boards of the HSI companies, only nine were made to women, representing just 11.3% of the total. This rate of new appointments to women has decreased not only in the last year, but also since 2009, and has remained disappointingly flat during this period. When looking at the male vs female appointments over an eight year period, we find that the highest disparity was in 2013/2014 when 90.4% of men were appointed compared to 9.6% women while the largest increase in female appointments was in 2015/2016 when 15.1% women were appointed. It is worth noting that this small surge can only be credited to the restructuring of two companies leading to the stepping down and re-appointment of existing board members and was not caused by a real increase in the appointment of women. 80 New Director Appointments 71 9 Figure 6: New Appointments by Gender ( ) 12.7% (8) 11.2 (10) 10.1% (7) 11.7% (9) 9.6% (8) 11.0% (12) 15.1% (16) 11.3% (9) 87.3% (55) 88.8% (79) 89.9% (62) 88.3% (68) 90.4% (75) 89.0% (97) 84.9% (90) 88.7% (71) 12.7% (8) 11.2% (10) 10.0% (7) 11.7% (9) 9.6% (8) 11.0% (12) 15.1% (16) 11.3% (9) 2009/ / / / / / /2016 New male appointments New female appointments 2016/

21 Brand new female director appointments Five new female directors have been appointed to HSI companies in the last year, and two of them namely, Chen Tsien Hua and Yan Shuqin, are holding a directorship for the first time. Table C provides details of these five new female directors. Three of these women hold ED roles while the other two hold NED roles at the HSI companies. Also noteworthy is that these women represent a diversity of industries which indicates a good distribution of these five women among the HSI companies. Table C: New Female Directors on HSI Boards Name HSI Company / Role Other Directorships / Role First Time on HSI? First Time Having a Directorship? Chen Tsien Hua 陳建華 Helen Wong Pik Kuen 黃碧娟 Cheung Kong Infrastructure Holdings Ltd Bank of Communications Co Ltd ED N/A Yes Yes NED HSBC Bank (China) Co Ltd Vice CH Yes No Shi Wei 時偉 China Merchants Port Holdings Co Ltd ED Shenzhen Chiwan Wharf Holdings Co Ltd CH Yes No Wu Wentin 吳文婷 China Mengniu Dairy Co Ltd ED China Foods Ltd NED Yes No Yan Shuqin 嚴淑琴 CITIC Ltd NED N/A Yes Yes 19

22 Poh Lee Tan INDEPENDENT NON-EXECUTIVE DIRECTOR Link Real Estate Investment Trust According to our latest findings, women represent 12.4% of all board directors on the Hang Seng Index companies. What is your reaction to this? More companies are increasingly focused on the issue of gender diversity on their board due to the good work done by many organisations including Community Business. Family-run companies are less focused on this matter and some companies are reluctant to consider outsiders. I would like to focus on the positives and highlight the solid progress we are making in Hong Kong. We should really encourage more boards to embrace and implement diversity by showing the benefits and the positive impact this progress is generating. It is good to have a set of goals such as 20% by 2020, but the important thing is to focus on how we get there. Why are there still so few women on boards of companies? Although women are very talented, many of them have busy and demanding careers and families to look after. A key question is that at what point in their careers should they start to consider board positions or board level roles or directorships? How can they make themselves more board ready? Companies need to address the issue of the leaky pipeline, where women opt out well before they reach board readiness. What can be done to increase female representation on boards? From my own experience, once you get your first role, you have the opportunity to learn about the workings of a board, which can lead to more opportunities. Therefore, I would advise women to be open-minded especially if it is their first board role. Being a lawyer myself and now being on a board of a company in the real estate industry, I have found this experience interesting, rewarding and engaging. One should not see a board directorship only as a career opportunity, but also as a form of giving back to the community. I support the notion highlighted in the book Half Time Moving from Success to Significance, that people after a certain age should look at serving and giving back more to the community as this can be revitalising and can act as a catalyst for more purpose, impact and growth. It is important to have a pipeline of talented women who can advance into senior positions, women have to be just as capable and experienced as men if they are going to be considered for board roles. It is also important to look at mindset and whether women are being actively encouraged and nurtured to aspire to board roles. I see it as part of my responsibility and any senior woman s responsibility to mentor, nurture, coach and sponsor other women. In addition, male champions can make such a difference, but there are still too few male champions. It is important to spend time with potential male champions to discuss the research conducted and to engage them more broadly on this subject. What is your view on quotas? I am not a fan of quotas. Regardless of gender, you should be considered for a board position because of the skills, relationships, experience and insights that you bring to the table. Many companies look at their present board composition and then decide, what their needs are and identify the gaps. One of these needs and gaps could be the issue of diversity. Executive search firms have noticed increased demand in Asian/Hong Kong women for international board roles. What are your views on why this may be happening? It does not surprise me, as I ve been asked on a number of these opportunities when I was at Baker & McKenzie. Increasingly, multinational companies with a focus on markets in Asia are looking for relevant knowledge, contacts and experience, and are looking to recruit both male and female Asian directors. There is demand for directors from countries like Singapore, China, and Hong Kong. So women in Hong Kong should be open-minded to embrace these positions and not only to focus on board roles in Hong Kong companies. 20

23 1.5 Top Performing Companies on the HSI (Top 10) This year is the first time since we started our research in 2009 that all of the 10 top performing companies have reached at least 20% women on their boards. However, the highest performing company has 30.8% women on its board, which is lower than last year when the top performance was 36.8%. HSBC has dropped from first place, a position that it held for the last two years. This was due to the increase in its board size in 2016 from 19 to 20 and also the drop in the number of its female directors from seven to six. Table D below shows the percentage range of the top 10 performing companies in the last eight years. Up until this year, there has been a gradual improvement in the lower and upper limits of the range. However, this year the upper limit shifted downwards from 36.8% to 30.8% resulting in a smaller range between the first and 10th performing companies. Table D: Range of Female Representation of Top 10 Companies ( ) Year Top 10 Range % to 30.8% % to 36.8% % to 35.3% % to 28.6% % to 33.3% % to 31.3% % to 29.4% Figure 7: Range of Female Representation of Top 10 Companies ( ) A closer look at the top 10 performers The number of women in the top 10 companies has remained stagnant at 37. Among the top 10 companies, two became new constituents to the HSI during 2016, namely AAC Technologies Holdings and Cheung Kong Infrastructure Holdings. It is important to note that these two companies have contributed two and four women respectively to the HSI company boards thus directly increasing the percentage of female directors on the HSI. We would also like to highlight that AAC Technologies was co-founded by a woman and has debuted at fourth place on our HSI list of companies with 28.6% women on its board. Furthermore, looking at the other eight companies which were on the top 10 list in 2016: Two companies have seen no change in the percentage of women on their boards: Cheung Kong Property and MTR Corporation. Three companies have seen a reduction in the percentage of women on their boards: o As a result of an increase in board size: Link REIT and Hang Seng Bank o As a result of an increase in board size and a decrease in female directors: HSBC Three companies have recorded an increase in the percentage of women on their boards: o CK Hutchison appointed a new woman on its board. o China Resources Power Holdings and CLP reduced their respective board size while retaining the same number of female directors. 36.8% 35.3% 30.8% 2015 Top 10 % Range 2016 Top 10 % Range 2017 Top 10 % Range 20.0% 18.8% 16.7% 21

24 1.6 HSI Companies with All-Male Boards It is encouraging to see that the number of companies with all-male boards now makes up less than a quarter (11 companies, 22.0%) of the total. This is a significant drop from 2016 (16 companies, 32.0%) and represents a 10% improvement. While the number of boards with zero women has declined, this has been partly due to two companies no longer being constituents of the HSI: China Resources Beer (Holdings) and Tingyi (Cayman Islands) Holding. Also contributing to this decline is the appointment of the first female director to two all-male boards, namely, Rita Fan who joined The Bank of East Asia as an INED and Shi Wei who joined China Merchants Port Holdings as an ED. The trend of all-male boards can be found in Figure 8. It is positive to see that the number of all-male boards has shown a general decline since 2009 when we first started tracking this data. Concurrently, it shows that the number of companies that have never had women on their boards is slowly reducing from nine in 2014 to seven in 2015 and is now down to four in To meet the 30% Club Hong Kong s target of zero all-male boards by the end of 2018, all 11 existing all-male boards will have to appoint female directors within the next two years, on or before 31 December Table E: Companies with Zero Female Directors Since 2009 Company CNOOC Ltd The Hong Kong and China Gas Company Ltd PetroChina Company Ltd Tencent Holdings Ltd Industry Energy Utilities Energy Information Technology Figure 9: Analysis of All-Male HSI Boards Stock Code Company 3 The Hong Kong and China Gas Company Ltd 6 Power Assets Holdings Ltd 23 The Bank of East Asia Ltd 1 st woman appointed 135 Kunlun Energy Company Ltd 144 China Merchants Port Holdings Company Ltd 1 st woman appointed 151 Want Want China Holdings Ltd 291 China Resources Beer (Holdings) Co. No longer on HSI 322 Tingyi (Cayman Islands) Holding Corp No longer on HSI 386 China Petroleum & Chemical Corp 700 Tencent Holdings Ltd 857 PetroChina Co. Ltd 883 CNOOC Ltd 941 China Mobile Ltd 1109 China Resources Land Ltd 2628 China Life Insurance Company Ltd 3988 Bank Of China Ltd Went from 1 woman to zero in 2015, now back to 1 woman in 2016 When considering new members of the Board, the Bank gives thorough consideration to a range of factors, including an appropriate balance of skills, experience, professional qualifications and diversity. We are pleased that Dr. Rita Fan joined our Board in 2016 which marks our first female director appointment. Dr Fan s understanding of our business and her wealth of experience on public boards and her dedication to the community make her a natural fit for our Board. Dr. David K.P. Li Chairman & Chief Executive, The Bank of East Asia, Ltd. Figure 8: Trend of All-Male HSI Boards 41.7% 38.0% (20) (19) 32.0% 28.0% 32.0% (16) (14) (16) 33.3% (14) 25.0% (12) 20.0% (10) % and (number) of companies with all-male boards 18.0% (9) 14.0% 14.0% (7) (7) % and (number) of companies which have never had female directors 8.0% (4) 22.0% (11) Estimated trajectory for reaching zero by end of

25 Koh Boon Hwee CHAIRPERSON AAC Technologies Holdings Inc. How important is board diversity to you? It is important to extend diversity beyond just gender. Look at the way the AAC board is comprised. It is a Chinese company listed on the Hong Kong stock exchange, with one of our directors located in the Silicon Valley, and the others are based in Hong Kong and Singapore. As an international company, we want a board which is diverse not only through gender, but geographically and culturally because we do business all over the world and a board should be able to reflect this. As Chairperson, what is your role in driving the process for board diversity? Each and every board member has different personalities, some being more vocal than others, whilst some are much quieter, this does not mean they have nothing of value to add. As the Chairperson, I would personally make sure that every person has the opportunity to speak and be heard. I always encourage and try to bring about an environment where nothing is out of bounds. No matter what the idea may be, we do not exercise any sort of judgment on it because it is someone s viewpoint and a board should share diverse views within an inclusive environment. Why are there still so few women on the boards of listed companies? I think that it really depends on the industry. For example, if you look at financial services, there are large proportions of women at senior levels, both in Hong Kong and Singapore, who would be available to become directors. However, in the areas that are more traditional, such as construction/engineering industries, the proportion of women has been lower, resulting in fewer women to serve as directors. It is also important to gain an understanding of what happens with men and to see if it is any different for women. For example, looking at the big accounting firms, once the partners hit retirement age, there is a huge push for them to become directors of boards. However, are women being encouraged into these same roles? Culture plays a part. Mindsets are holding us back here in Asia and this needs changing. How can we get more women on boards? For AAC Technologies, when looking at candidates, the most important criteria are the expertise and competence of the person and with women making up half of the world, it is logical that we should have more female directors. A career takes over 30 years to build and if we look at the gender balance in education 30 or 40 years ago and compare that to now, we can find that there are a lot more female graduates today and more women on the career path. This should correlate to a change 20 or 30 years from now, where many more women will be in senior leadership and on boards. That is something I am positive about for the future. I think the trend in both Europe and US is for having only the CEO on the board with everyone else as an independent director, I see this trend growing and the reason why is the importance of oversight of responsibility. With this in mind, it will be good to look at the make-up of a company s executives and rising talents below executive level to see whether there are talented women who are potential candidates for CEO or CFO positions. If they are, we should provide a positive and inclusive environment and culture for them to progress. This can help increase women on boards in the future. The 30% Club Hong Kong has set a target of 20% by In your opinion, how achievable is this in Hong Kong? There are definitely more women that can serve as directors on international or Hong Kong listed companies and I think many of these people are still at the stage where they are active in their careers, in their businesses. I would like to see once they hit retirement age that a lot more Hong Kong and Singaporean women join boards as directors. The setting of an aspirational target is something that should be encouraged. I do not see any down-side to having one. I believe it is achievable, with more women rising through the ranks, it is only a matter of time for us to see this aspirational target realised. 23

26 1.7 Female Executive Directorships Executive directorships are an indicator of the female pipeline in a company and whether companies are creating the right environment for women to reach the top. Currently, there are 15 HSI companies with female executive directors the highest number ever which represents 30% of all 50 HSI companies. In addition, there are currently 19 female executive directors, representing 8.9% of all executive directorships on the HSI. While these are the highest number recorded since we starting examining this issue, this is only an increment of four executive directorships and two companies having female executive directors on their boards since This indicates that companies are not considering executive directorships as a way to expand the number of female directors on their boards. Figure 10: Female Executive Directorships on HSI Companies ( ) 19 (8.9%) 15 (7.0%) 15 (6.7%) 15 (6.9%) 16 (7.1%) 17 (8.0%) 17 (7.9%) 15 (30.0%) 13 (31.0%) 12 (25.0%) 12 (24.0%) 12 (24.0%) 13 (26.0%) 13 (26.0%) Female executive directorships Companies with female executive directors

27 1.8 Women Holding Multiple Directorships We continue to see an increase in the number of women holding multiple directorships. There are currently 78 directorships being held by 64 different women, and 14 directorships that are held by eight women who have other board roles on HSI companies and at least one other Hong Kong listed company, as well as other international or local companies and organisations. This is the highest number recorded since To put things further into perspective, eight women hold 22 HSI directorships and thus are accountable for 28.2% of the 78 posts held by all the women on the HSI these women are listed in Table F. Any other directorships held by these women in Hong Kong listed companies which are not HSI constituents are shown in purple. It can be seen in Table F that these women have three to six board roles on Hong Kong listed companies. It should be noted that some of these HSI appointments were made in the last year, indicating that some companies keep appointing directors from the same group of women and do not appear to be casting the net wider to identify new candidates. Other candidates that can be considered for board positions include women who may currently hold one directorship or those who have never held a corporate board director role, but have solid corporate executive experience or who serve on advisory or NGO boards. Figure 11: No of HSI Female Directorships vs. No of Women ( ) No. of Female Directorships No. of Women 25

28 Figure 12: Women Holding Multiple HSI Directorships 87.4% (56 Women) 4.7% (3 Women) 6.3% (4 Women) 1.6% (1 Woman) No. of women holding 1 HSI Directorship No. of women holding 2 HSI Directorships No. of women holding 3 HSI Directorships No. of women holding 4 HSI Directorships After developing the list of women with multiple HSI directorships (Table F) and finding that most of them also held directorships on non-hsi listed companies, we were interested to have a closer look at the 56 women holding one HSI directorship and determine how many held multiple directorships on Hong Kong listed companies beyond the HSI Table G lists these 16 women. Together, Tables F and G show the tremendous depth of board experience of the female directors on HSI companies. Table F: Women Holding Multiple HSI Directorships Name Company Year of Appointment Company Year of Appointment Angelina Pui Ling Lee Wong 李王佩玲 Anita Yuen Mei Fung 馮婉眉 Elsie Oi Sie Leung 梁愛詩 Fanny Chiu Fun Law Fan 羅范椒芬 Irene Yun Lien Lee 利蘊蓮 Cheung Kong Infrastructure Holdings Ltd 2004 Henderson Land Development Company Ltd 1996 Great Eagle Holdings Ltd 2002 TOM Group Ltd 2000 China Construction Bank Corporation 2016 Hong Kong Exchanges and Clearing Ltd 2015 Hang Lung Properties Ltd 2015 Beijing Tong Ren Tang Chinese Medicine Company Ltd 2013 China Resources Power Holdings Company Ltd 2010 China Life Insurance Company Ltd 2016 United Company Rusal Plc 2009 China Unicom (Hong Kong) Ltd 2012 DTXS Silk Road Investment Holdings Company Ltd 2015 CLP Holdings Ltd 2011 Nameson Holdings Ltd 2016 Cathay Pacific Airways Ltd 2012 HSBC Holdings Plc 2015 CLP Holdings Ltd 2010 Hysan Development Company Ltd 2011 Hang Seng Bank Ltd 2014 Noble Group Ltd 2012 Margaret May Yee Leung Ko 梁高美懿 Chong Hing Bank Ltd 2014 Li & Fung Ltd 2013 First Pacific Company Ltd 2012 Sun Hung Kai Properties Ltd 2013 Hong Kong Exchanges and Clearing Ltd 2013 Rita Lai Tai Fan Hsu 范徐麗泰 China Overseas Land & Investment Ltd 2009 COSCO Shipping Ports Ltd 2009 China Shenhua Energy Company Ltd 2010 The Bank of East Asia Ltd 2016 COSCO Shipping Holdings Company Ltd 2011 Rose Wai Mun Lee 李慧敏 CK Hutchison Holdings Ltd 2015 Swire Pacific Ltd 2012 Hang Seng Bank Ltd 2012 * Non-HSI companies on the Hong Kong Stock Exchange in purple NB: Excluded from this list are the female HSI directors who have one HSI directorship and other non-hsi directorships 26

29 Table G: Women Holding One HSI Directorship and Other Non-HSI Directorships Name Company Year of Appointment Company Year of Appointment Ada Ying Kay Wong 黃英琦 Carmen I Hua Chang 周一華 Chiang Lai Yuen 蔣麗苑 Doreen Yuk Fong Lee 李玉芳 Dorothy Tak Fai Chan Yuen 陳阮德徽 Edith Shih 施熙德 Eva Kwok Lee 郭李綺華 Hu Xiaoling 胡曉玲 Laura May Lun Cha Shih 史美倫 Leonie Man Fung Ki 紀文鳳 Li Qingping 李慶萍 Nancy Sau Ling Tse 謝秀玲 Paddy Wai Yu Tang Lui 呂慧瑜 Rachel Yun Chiang 張昀 Rosanna Yick Ming Tam Wong 譚王䓪鳴 Sonia Chi Man Cheng 鄭志雯 Hengan International Group Company Ltd 1998 Pak Fah Yeow International Ltd 2004 AAC Technologies Holdings Inc Semiconductor Manufacturing International Corporation 2014 Chen Hsong Holdings Ltd 2000 Hang Seng Bank Ltd 2010 Joyce Boutique Holdings Ltd 2003 The Wharf (Holdings) Ltd 2003 AMS Public Transport Holdings Ltd 2010 MTR Corporation Ltd 2013 CK Hutchison Holdings Ltd 2017 Hutchison Telecommunications Hong Kong Holdings Ltd 2017 Cheung Kong Infrastructure Holdings Ltd 2004 CK Life Sciences International (Holdings) Inc 2002 Belle International Holdings Ltd 2005 Dali Foods Group Company Ltd 2015 China Telecom Corporation Ltd 2008 HSBC Holdings Plc 2011 Clear Media Ltd 2004 Sa Sa International Holdings Ltd 2006 New World Development Company Ltd 2008 China CITIC Bank Corp Ltd 2014 CITIC Ltd 2015 Link Asset Management Ltd 2014 Wheelock and Company Ltd 2013 Galaxy Entertainment Group Ltd 1991 K. Wah International Holdings Ltd Goodbaby International Holdings Ltd 2000 Sands China Ltd 2009 Pacific Century Premium Developments Ltd 2015 CK Hutchison Holdings Ltd 2001 The Hongkong and Shanghai Hotels Ltd 2013 Hutchison Telecommunications Hong Kong Holdings Ltd 2009 New World China Land Ltd 2010 New World Development Company Ltd 2004 * Non-HSI companies on the Hong Kong Stock Exchange in purple On the supply side, through a number of initiatives undertaken by groups such as the 30% Club Hong Kong and the DiversityDirectory Asia Pacific to identify board candidates, the ongoing efforts by executive search firms and directorship training programmes, there is a pool of available talented women in Hong Kong and Asia who are ready for board positions. While there is much greater awareness among Hong Kong companies of board diversity as something they should be aspiring to, there is a lack of urgency when it comes to implementation. Consequently, as demonstrated by Community Business latest survey, women continue to be significantly under-represented on Hong Kong corporate boards with a few notable exceptions. Hong Kong now lags far behind the UK where the new target proposed by the 2015 Davies report is 33% for women on the boards of FTSE 350 companies by 2020, after the previous target of 25% of FTSE 100 board positions being held by women was successfully achieved. When you consider how many qualified women there are in Hong Kong, many of whom are sitting on government advisory and statutory bodies which have a target of 35% female representation, Hong Kong clearly has the female talent pool so boards should be considering how they leverage this. Su-Mei Thompson CEO, The Women s Foundation, and Founder of 30% Club Hong Kong 27

30 1.9 Analysis of Age and Tenure Age The average director s age has remained relatively consistent over the last five years. CK Hutchison is the company with the oldest board with an average age of 73.3 years old while China Mengniu Dairy has the youngest board with an average age of 52.6 years old. Table H: Average Age of Directors on HSI Boards All EDs NEDs All EDs NEDs All EDs NEDs All EDs NEDs All EDs NEDs Range All Directors Men Women Tenure The average tenure for male and female directors is 6.4 and 4.8 years respectively. Cheung Kong Property Holdings Ltd has the shortest average tenure of 1.1 years due to their recent restructure which saw the merging of Hutchison Whampoa and Cheung Kong, both previously HSI companies. The company with the second shortest average tenure is Petrochina Company Limited at 1.8 years. The Hong Kong and China Gas Company Ltd has the longest average tenure for its directors at 20.8 years. Currently there are no term limits for directors on Hong Kong listed companies. The Corporate Governance Code requires that if an INED serves more than nine years, his or her further appointment must be subjected to a separate resolution to be approved by shareholders, with justifications provided for his or her independence. Table I: Average Tenure of Directors on HSI Boards All EDs NEDs Range All EDs NEDs All EDs NEDs All EDs NEDs All EDs NEDs Range All Directors Men Women

31 1.10 Women on Boards Five-year Performance Analysis In this report, we have expanded our analysis across a five-year horizon on an individual company level to ascertain whether the top performing HSI companies have truly been making a concerted effort to increase the gender diversity of their boards. Besides quantitative data, we examined qualitative information such as the company s published board diversity policy and the environment within the company to enable women to advance to the top, as reported on their corporate website or annual report. Details can be found in the Appendix. For some companies, the increase in representation of women has been due to changes in their board size rather than by making female appointments and this is clearly illustrated in the five-year trend charts in the Appendix. When looking at the five-year trends of all 50 HSI companies, we find the majority of companies have not continued to increase the number of female directors once one or a few women have been appointed to their board which shows complacency or lack of urgency when it comes to creating a more gender-balanced board. Looking at the performance of the top 10 companies over the last five years, only four have shown a fairly consistent positive trajectory in the representation of female directors, as well as demonstrating commitment in creating an enabling workplace environment to support the advancement of women. In alphabetical order, these companies are: CLP, HSBC, Link REIT and MTR Corporation. These four companies have the following in common (refer to Appendix): A net increase in the number and percentage of female directors on its board over the last five years A board diversity policy which specifically mentions gender Commitments to gender diversity which have been communicated publicly by its senior leadership through its corporate website, social media, and other means Internal initiatives to support the development and advancement of its female talent All other 10 top performing companies have either shown a decline or fluctuation in female representation in their boards over the last five years. Hang Seng Bank reduced its female directors from five to four in 2014, and the number has remained unchanged since then. For China Resources Power Holdings, the number of women has remained constant at three for the last five years even though there have been a number of appointments made to men during this time. 29

32 1.11 Glacial Pace of Change Although progress has been made in the last year, the overall rate of change is still painstakingly slow: Assuming an increase of seven female directorships each year (as in 2016) and the total directorships remain unchanged at 628, it would take seven years to achieve 20% (i.e. by 2024) and 34 years (i.e. by 2051) for parity. Assuming an increase in the overall representation of women on boards of 1.3% each year as was experienced in 2016, it would take six years to achieve 20% (i.e. 2023) and 29 years (i.e. 2046) for parity. To achieve the target of 20% by the end of 2020 set by the 30% Club Hong Kong, there needs to be an increase of 48 female directorships over the next four years (average of additional 12 per year), assuming the total directorships remain constant at 628. Figure 13: Projections for Reaching 20% Women on HSI Boards additional 12 directorships per year % increase per year additional 7 directorships per year 12.4% Figure 14: Projections for Reaching 50% Women on HSI Boards % increase per year additional 7 directorships per year 20.0% 12.4%

33 1.12 An International Comparison Since we commenced our Women on Boards campaign back in 2009, much has happened globally when it comes to awareness and support for women on boards. We reported in our Women on Boards: Hang Seng Index 2009 report how Norway started legislating boardroom quotas in Norway has since been joined by much of Europe with Spain, France and Iceland, all setting their minimums for women on boards at 40%. Italy requires one-third and both Belgium and the Netherlands legislate a requirement of 30%. Both Israel and Quebec, Canada have had a quota requirement of 50% since 2010 and 2011 respectively. 3 In the UK, a government review sponsored by Lord Davies in 2011 set out 10 recommendations forming a blueprint for voluntary, business-led change. In 2014, history was made when Glencore Xstrata s appointment of Patrice Merrin to their board marked the end of all-male boards in the UK s top companies. In October 2016, the UK reported that with 26.8% women on its FTSE100 boards, it had already exceeded its target of 25% by 2015 and established a new voluntary target of 33% by To the young people of today, equality and diversity seem so easy. Yet as they look around various aspects of business today, they wake up to a sad reality which is not right. We owe it to the next generation to put our house in order and we as leaders in business have a huge responsibility. Hong Kong is a fabulous place to do business but it must be a fabulous place for both men and women. Boardrooms need to represent a company s customer base and employee base. Whilst Hong Kong has made progress on women on boards, it has not been fast enough nor sufficient. Hong Kong needs to be a leader and example to the rest of the world. E. Mervyn Davies- Lord Davies of Abersoch Chairperson, Corsair During the last eight years, there has been a growing body of research linking women on boards and senior management to better company performance. For example, MSCI indicated in their 2015 Women on Boards report that companies in the MSCI World Inde 5 with strong female leadership generated a Return on Equity of 10.1% per year vs. 7.4% for those without. In 2013, Thomson Reuters published a study Mining the metrics of board diversity in which 4,100 public companies were analysed globally and found a strong correlation between gender diverse boards and company performance. 6 Recent studies have also found that companies with a gender diverse board were better at managing risk, and were involved in fewer controversies, including fraud

34 International Trends Figures 15, 16 and 17 show a distinct gap between Western countries and Asian markets, in terms of current representation of women on boards and trajectory over the last eight years. Figure 17 shows that in the same timeframe of eight years, Hong Kong s progress has been relatively flat while there has been significant improvement in gender diversity in Australia, the US, and the UK, and none of these markets have mandated quotas in place. Regional Trends Excluding Malaysia, Hong Kong is ahead of other Asian markets. However, there has been a greater government focus in driving greater gender diversity in these markets and specific measures have been introduced to increase representation at board level. Significantly because of government prioritisation of women on boards, Malaysia has overtaken Hong Kong and India has caught up rapidly with Malaysia increasing representation from 9.7% to 14.6% in just four years. This reinforces the need for Hong Kong s government to do more and take a more proactive stance. India Japan The Companies Act, introduced in 2013, requires public companies with five or more directors to have at least one female board director. However, most companies are not complying with the true spirit of board diversity: o 530 of 5,711 listed firms have been fined for not having at least one woman director by 1 April o Many companies appointed family members as directors who are non-independent. Japan set an ambitious target of 30% of women in management roles by 2020 in 2003 which was subsequently reduced to 7% for national public servants and 15% for local government officials and private companies in Since April 2016, the Female Employment Promotion Legislation requires large-scale private and public sector entities (>300 employees) to disclose gender diversity targets, along with action plans. Korea Women Corporate Directors 10, a foundation inspiring visionary boards worldwide, launched their first chapter in September Malaysia Malaysia s quota of 30% by 2016 has been a key catalyst for a significant increase of women on boards from 9.7% in 2013 to 14.6% as at December Directorship training has been rolled out in the last few years to prepare women for board roles. Malaysia launched the 30% Club in May in conjunction with several government bodies. The Prime Minister delivered the keynote address at the launch, giving visibility to the issue and setting a positive example for the business community. Singapore In 2011, BoardAgender 12 was founded, and along with the creation of the SG50 Champions of Change, have been promoting women on boards. Figure 15: Percentage of Women on Boards - An International Comparison Norway All public listed 41.6% (Jan 2016) UK FTSE 100 Australia ASX200 Canada TSX 60 US S&P 500 New Zealand NZX 21.0% (May 2016) 20.4% (Sep 2016) 25.1% (Dec2016) 24.0% (Sep 2016) 26.8% (Oct 2016) Malaysia All listed co. Hong Kong HSI 50 India BSE 200 China Singapore SGX 9.7% (Jun 2016) 12.4% (Jan 2017) 12.3% (Apr 2015) 10.7% (Sep 2014) 14.6% (Dec 2016) Japan All listed Co. 3.4% (Jan 2017) 32

35 Figure 16: Progress of Women on Boards by Country Norway All PLC UK FTSE 100 Australia ASX200 Canada TSX 60 US S&P 500 New Zealand NZX Malaysia All PLC India BSE 200 Hong Kong HSI 50 Singapore SGX Japan All Listed Co % Jan % Oct % Dec % Apr % May % Sep % Dec % Mar % Jul % Jan % Mar % Oct % Nov % Sep % Nov % Sep % Dec % Apr % Mar % Jun % Jul % Jun % Oct % Oct % Oct % Oct % Sep % Dec % Oct % Mar % Oct % Mar 2015 Countries with quotas in place Figure 17: Hong Kong s Female Representation on Boards Compared to Global Counterparts ( ) 15.2% 12.2% 24.0% 19.2% 11.1% 26.1% 21.7% 20.0% 11.1% 26.8% 25.1% 21.0% 12.4% p 14.6% p 16.8% p 5.8% p 3.5% 8.9% 8.3% US UK Hong Kong Australia Personally I would like to see Hong Kong lead by example in the region. Healthy boards are those which are diverse, not just in terms of gender, age, ethnicity and tradition, but of experience, talent and thought. This can lead to improved decision making, risk management, and increased productivity and profit. The best listed companies should therefore plan ahead for board rotations to ensure that a qualified slate of competent directors of both genders is considered. Dr. Dame Rosanna Wong Yick-ming, DBE, JP Executive Director, The Hong Kong Federation of Youth Groups; Independent Non-Executive Director, Hongkong and Shanghai Banking Corporation, CK Hutchison Holdings Ltd. and The Hongkong and Shanghai Hotels Ltd. 33

36 1.13 Asian Women on International Boards The relatively low number of women on company boards is a global issue, and varies depending on a country s progress in terms of diversification. Asia in particular is playing catch-up. Heidrick & Struggles studied a sample of 597 Asian women directors on boards worldwide. i ii Out of these 597 women, 61, or 10.2% iii sit on the boards of companies with headquarters outside the region, taking up a total of 77 board seats. iv What do these figures reflect? Asian executives are increasingly realising that their opportunities in the region are limited; therefore, they seek positions elsewhere. At the same time, multinational corporations tend to adopt a more forward-looking approach by ensuring boards are diverse. This attracts Asian women to their boards and encourages better board discussions. However, there is another very simple explanation, that is much less palatable that Asian companies are less able to see the benefit of board diversification as a means of achieving business goals, and that companies elsewhere have made more progress in realising the value of diversity and experience. Of the 61 Asian women on boards in companies headquartered outside Asia, the research found that nearly one-third (31%) are Chinese, with a substantial drop to the next largest group, Indian women (20%). By sector, the most Asian women on boards can be found in the Consumer and Retail industries, namely Food Production & Processing (16.4%), and General Retailers (6.8%). International Oil and Gas sector companies also have high Asian women representation on board (6.8%). v A company s leadership in consumption-driven industries is likely to have both a business reason the status of women as the key drivers of demand in these sectors and an egalitarian one. Interestingly, Oil & Gas has tended to be ahead ofthe curve when it comes to embracing diversity. Shell, for example, started its Global Diversity and Inclusion department in 1996 today, one-third of its board of directors is female. vi Table J: Nationality of Asian women directors on non-asian boards Nationality Number Percentage Chinese 19 31% Indian 12 20% Singaporean 12 20% Malaysian 7 11% Japanese 5 8% Taiwanese 2 3% Indonesian 1 2% Pakistani 1 2% South Korean 1 2% Vietnamese 1 2% Total % i. Heidrick & Struggles looked into the BoardEx database in September 2016 and analysed Asian women on boards worldwide. BoardEx database contains biographical information on many board members and senior executives around the world. These individuals are associated with over 800,000 global organisations. According to BoardEx, 597 have the nationality field populated as Asian. Those Asian females who have not filled out the nationality field, will not have been counted in these figures. ii. iii. iv. In this context, Asian women is defined as those females who listed their nationalities as any of the following: Chinese, Japanese, Afghan, Armenian, Azerbaijani, Bahraini, Bangladeshi, Bhutanese, Cambodian, Georgian, Indian, Indonesian, Iranian, Malaysian, Maldivian, Mongolian, Burmese, Nepalese, North Korean, Omani, Pakistani, Qatari, Russian, Saudi, Singaporean, South Korean, Sri Lankan, Syrian, Tajik, Taiwanese, Turkish, Uzbek, Vietnamese, Yemeni, Filipino, Israeli, Iraqi, Jordanian, Kuwaiti, Kyrgyzstani, Lebanese or Thai. We excluded women who sit in organisations registered in Cayman, Bermuda and the Pacific islands, as these are Chinese companies listed overseas. Some of these women have seats on multiple boards. 34

37 Table K: Distribution of Asian women directors on non-asian boards by industry Industry Count Percentage Food Producers & Processors % General Retailers 5 6.8% Oil & Gas 5 6.8% Business Services 3 4.1% Diversified Industrials 3 4.1% Health 3 4.1% Insurance 3 4.1% Investment Companies 3 4.1% Banks 2 2.7% Chemicals 2 2.7% Construction & Building Materials 2 2.7% Electronic & Electrical Equipment 2 2.7% Engineering & Machinery 2 2.7% Household Products 2 2.7% Information Technology Hardware 2 2.7% Leisure & Hotels 2 2.7% Mining 2 2.7% Software & Computer Services 2 2.7% Speciality & Other Finance 2 2.7% Telecommunication Services 2 2.7% Tobacco 2 2.7% Automobiles & Parts 1 1.4% Beverages 1 1.4% Clothing, Leisure and Personal Products 1 1.4% Containers & Packaging 1 1.4% Electricity 1 1.4% Pharmaceuticals and Biotechnology 1 1.4% Private Equity 1 1.4% Renewable Energy 1 1.4% Steel & Other Metals 1 1.4% Transport 1 1.4% Total % v. 4 out of the total 77 companies in the list do not have the industry field populated vi. Board of directors, Shell Global, extracted on February 15, 2017, Of the women who sit on international boards, almost 20% do so at two or more companies a relatively small, but by no means insignificant percentage. If time is not an issue, sitting on two, or a maximum of four boards, allows board of director members to gain and share experience, and generate synergy. Instead of continuing to look within the closed shop, Heidrick & Struggles puts a lot of focus on helping clients looking outside the company and nurturing potential female candidates for future appointment. This can help clients expand the number of potential candidates, and enhance the quality and skills diversity of these contenders. Table L: Number of board roles held by Asian women directors Number of Board Positions Count Percentage One % Two % Three 2 3.3% Four 1 1.6% Total % Implications The forward-thinking approach to board diversity by multinational corporations has the potential to make them stronger and more successful. They recognise the value and importance of gender diversity in corporate leadership, and attract a range of the best talent to their boards, including Asian females. By widening the scope of their boards, Asian companies can also create strong, representative leadership. One way for them to introduce ready-made female Asian leaders is to invite those Asian women who have finished their tenures at multinational corporations to join their boards. By hiring seasoned female board members, Asian companies will have the opportunity to benefit from their vast experience. Although it may still take time for organizations to see the return on investment of gender diversity on boards, the pay-off will be worth it. The diversity of perspectives, the insight and the skills that women can bring can benefit the board, the company, as well as the relevant industry. Asian companies should look at speeding up their pace of transformation to enhance their profits and the longevity of their companies. 35

38 Euleen Goh INDEPENDENT NON-EXECUTIVE DIRECTOR Shell Global According to our latest findings, women represent 12.4% of all board directors on the Hang Seng Index companies. What is your reaction to this? Allow me to start with a health warning that I am not familiar with the Hong Kong environment and I will therefore speak more broadly on the matter. I feel that the percentage is low but we should see ourselves more on the cusp of an upwards trajectory which more mature markets like UK and US have already started climbing. Not so long ago, the UK set targets and started the drive for change and I see it as positive that we are heading into an upwards direction of change. In Asia, there needs to be a want by the business community and I feel that to drive this it is important to raise awareness of the business imperative. There has been much research over the years including that conducted internally by Shell which has positively shown the benefits of gender diversity on company performance. Secondly, I think it is important for the business community to provide greater access to talented women with credentials to have a chance to serve on boards. Women, I feel, are behind the curve when it comes to developing strong networks for creating opportunities to get onto boards. A contributing factor can be that women have to multitask, to juggle multiple responsibilities that can limit and hinder their ability to build connections such as at members clubs or golf courses. Men have a much more mature and robust network and system when it comes to access to chairmen of company boards. Why is board diversity important to you? I believe that the best performing boards are the ones that have a wide range of perceptual acuity. Inadequate diversity could translate to a board that is not in touch with their company, its business and its customers. This will become more and more problematic over time and the trends internationally indicate the need to diversify boards or risk being left behind. It is also important to note that diversity is not just about gender but extends to dimensions such as age, culture and nationality as well. Boards need to look at the bigger picture when it comes to board diversity. Companies have a responsibility in this day and age to have and progress their diversity policies each year as well as set targets internally that suit their company needs because it is important for companies to hold themselves accountable. Why are there so few women on boards? When it comes to gender diversity, it is not just about looking at the board but throughout the company and all the more so for the executive level. The representation of women at the in early career is often at par with men, if not more. However, as the career path extends, it is clear that women are not progressing as smoothly as their male counterparts. This leaking pipeline of female talent is detrimental to companies in the long run. Companies need to realise that women need space and flexibility in order to build their careers. Women often need to take time out for motherhood which can be anything from one to three years and companies need to have enabling policies that help women integrate back into the workforce. Retaining talent is much more cost effective than starting fresh and having to recruit and train replacement talent. 36

39 How can we get more women on boards and in senior leadership positions? Mentorship provided by seasoned women in senior leadership for aspiring female talent is one way to achieve this.. Having role models is also important for inspiring others to follow in their footsteps and I hope to see more done to make role models more visible in promoting more women on boards and in senior leadership. In addition, there should be opportunities for chairpersons and directors to meet and learn more about aspiring women who can be nominated to boards. Has being a woman played any factor in your board appointments? I am often asked whether being a woman has played a part in my career and I must say that I used to identify as being gender blind. I would dismiss the topic and say that gender shouldn t be a factor and all that matters is one s skillset and experience. I ve since learned that it s much better to be gender aware and recognise that it is important to provide support and help for women to maximise their potential. When I look back at my own career, there have been many women and men who have helped me get to where I am. It is only natural for women to add value to a board, even more so for Asian women, because men and women are different. We will bring different perspectives to the table, the same way that an Asian will bring something different than a western person. I feel that women can be more in tune to consumer needs and can better relate to the female customer. Because of this simple reason, boards should have sufficient diversity of gender, nationalities and more. Equally important is the need for inclusion of the diverse views and people on the board. What is your advice to aspiring women looking to become senior leaders and board members? My advice is threefold. I am a fan of Sheryl Sandberg and her book, Lean In and I would firstly tell women to go for it. Take the step forward into senior leadership, put yourself forward for board roles, there is nothing stopping you but yourself. Secondly I would say, think about what you can bring to the table. The insights, experiences, skills that can make you a real asset to the board and look at the company s business, their plans for the future when looking at this. Thirdly, do not neglect the importance of networking and giving yourself the chance to learn more and meet new people that in turn create new opportunities. Before I joined the Shell board, I was fortunate to have built a strong network within Asia which enabled my exposure and access to local boards but I was not known to international boards. I put myself out there and attended many forums and events where I learned and met people. It was at one such event that I met the head of an executive search firm whom it considered me for international boards. This was how I got my first directorship on an international board. Once you get onto a board, it makes it a lot easier to become considered for further board roles and that should be good motivation for women to take that first step to lean in and step forward. 37