HKICS issues a 'Call to Action' for regulatory imposition of a 30% target to be achieved over a six-year period for Hong Kong
HONG KONG, March 8, 2021 /PRNewswire/ -- The Hong Kong Institute of Chartered Secretaries (HKICS) has today, on International Women's Day, hosted a conference. This follows the publication of a review report (Review) titled, 'Missing Opportunities - a Review of Gender Diversity on Hong Kong Boards' supported by the contributors and organisations indicated below. The Review calls for the imposition of a 30% target for women on boards (WOBs) over a six-year period.
That the level of representation of WOBs of Hong Kong listed companies is poor. Only one in seven of the directors of the fifty Hang Seng Index companies is a woman. Across all Hong Kong listed companies, women comprise only 14.2% of all directors. One third of those companies have no women at all on their boards.
That the level of WOBs is also poor by comparison to other jurisdictions, including the UK (34%), and within APEC, Australia (32 %), Malaysia (27%), India (18%), and Singapore (17%).
Progress in increasing the representation of female directors has been glacial. Over the past ten years, the percentage of women directors has risen only from 10.5% to 14.2% - an increase of less than half a percentage point per year. At this rate, gender parity on Hong Kong boards will not be achieved until about 2091, if at all.
Ms Gillian Meller FCG(CS, CGP) FCS(CS, CGP), President of HKICS said in relation to gender diversity that: "This matters. It matters because gender board diversity is well recognised as contributing to more effective boards and better corporate performance. It matters because the under-representation of women on our boards fails to meet the standards of an international financial centre. It matters as an issue of fairness and equality. It matters because Hong Kong companies are missing the opportunity to make full use of the talent available to serve on their boards and Hong Kong women are missing the opportunity to develop their careers and serve the Hong Kong corporate community. And it matters to our Institute as a promoter of excellence in governance and as a diverse organisation ourselves - two-thirds of our members are women."
A Call to Action
The Institute recognises that substantial and meaningful changes to the regulation of the gender composition of the boards of listed companies would best come from a constructive debate and broad-based support. However, Hong Kong's performance in this area is so poor and progress so slow that regulatory change is now needed to achieve change.
The Institute therefore proposes that the Hong Kong Corporate Governance Code is amended to include a target of a minimum 30% female representation on boards. To give shareholders and boards time to adjust to this target, a six-year transition period would be set. The target would be voluntary, but only in the sense that it will be subject to a 'comply or explain' regime. Both during and after the transition period, companies who do not comply will be required to disclose the specific reasons for this, the particular steps they intend to take to achieve compliance and the timeframe.
In its Review, the Institute expresses its confidence that ready-qualified and capable female candidates are available to take up more board seats in Hong Kong. Ms Meller says that "It is inconceivable that, somehow, Hong Kong women are less able than those elsewhere. Female board talent is there - shareholders just need to look for it."
Supporting Contributors and Organisations
The Review has benefited from the support of some of Hong Kong's leading corporate governance professionals and practitioners, as listed below. The views of each of these, often in forceful terms, are expressed in the Review.
Contributors (in order of appearance)
Gillian Meller FCG(CS, CGP) FCS(CS, CGP), President, The Hong Kong Institute of Chartered Secretaries; Legal and European Business Director, MTR Corporation Limited
The Hong Kong Institute of Chartered Secretaries
Amar Gill, Managing Director and Head of Investment Stewardship, APAC, BlackRock
Teresa Ko BBS JP, Former Chairman, Listing Committee of the Hong Kong Stock Exchange; Partner and China Chairman, Freshfields Bruckhaus Deringer
Freshfields Bruckhaus Deringer
Fiona Nott, Chief Executive Officer, The Women's Foundation
The Women's Foundation
Tim Payne, Senior Partner, Brunswick Group; Chair, Steering Committee, 30% Club Hong Kong
30% Club Hong Kong
Pru Bennett, Partner, Brunswick Group
Janet Ledger, Chief Operating Officer, Community Business
Edith Shih FCG(CS, CGP) FCS(CS, CGP)(PE), Immediate Past International President, The Chartered Governance Institute; Past President, The Hong Kong Institute of Chartered Secretaries; Executive Director and Company Secretary, CK Hutchison Holdings Limited
The Hong Kong Institute of Chartered Secretaries
Dr Annie SC Wu SBS JP, Honorary Chairman, Beijing Air Catering Limited
Dr Adrian Cheng JP, Chief Executive Officer, New World Development Company Limited; Founder & Chairman, K11 Concepts Limited; Owner of Rosewood Hong Kong; Executive Director, Chow Tai Fook Jewelry Group Limited; Vice-Chairman and Group CEO, CTF Education Group
New World Development Company Limited
The Honourable Mrs Fanny Law Fan Chiu-fun GBM GBS JP, Non-official member of the Executive Council of The Government of the Hong Kong Special Administrative Region
Neil Waters, Consultant, Egon Zehnder
Lau Ka Shi BBS FCG(CS, CGP) FCS(CS, CGP), Managing Director & CEO, BCT Group (BCT Financial Ltd & Bank Consortium Trust Co Ltd)
BCT Group (BCT Financial Ltd & Bank Consortium Trust Co Ltd)
Nicholas Allen, Chairman & Independent Non-Executive Director, Link Asset Management Limited
Link Asset Management Limited
As Ms Meller observes, there is a common theme across all these contributions: "The current status of board gender diversity in Hong Kong is unacceptable and unsustainable. Action is needed; that action must be meaningful and the time for action is now."
About The Hong Kong Institute of Chartered Secretaries
(Incorporated in Hong Kong with limited liability by guarantee)
The Hong Kong Institute of Chartered Secretaries (HKICS) is an independent professional body dedicated to the promotion of its members' role in the formulation and effective implementation of good governance policies, as well as the development of the profession of Chartered Secretary and Chartered Governance Professional in Hong Kong and throughout the mainland of China (the Mainland).
HKICS was first established in 1949 as an association of Hong Kong members of The Chartered Governance Institute (CGI), formerly known as The Institute of Chartered Secretaries and Administrators (ICSA) of London. It was a branch of CGI in 1990 before gaining local status in 1994 and has also been CGI's China Division since 2005.
HKICS is a founder member of Corporate Secretaries International Association (CSIA), which was established in March 2010 in Geneva, Switzerland. In 2017, CSIA was relocated to Hong Kong where it operates as a company limited by guarantee. CSIA aims to give a global voice to corporate secretaries and governance professionals.
HKICS has more than 6,000 members and 3,200 students.
For more information, please visit www.hkics.org.hk.
Authors of the Review
Peter Greenwood FCG(CS, CGP) FCS(CS,CGP) (Fellow, HKICS)
Mohan Datwani FCG(CS, CGP) FCS(CS,CGP)(PE) (Deputy Chief Executive, HKICS)
SOURCE The Hong Kong Institute of Chartered Secretaries