Forging girl power in Asia's boardrooms

At least 3 women needed on a board to reap benefits like better grasp of clients: Studies

HONG KONG • Women are creeping into Asia's boardrooms.

Although one-fifth of firms in Hong Kong's Hang Seng Index still have all-male boards, new appointments of women directors are rising.

The next task - in the city and elsewhere in the region - is to ensure women are present in sufficient numbers for companies to reap the full benefits of diversity.

Women accounted for almost 19 per cent of appointments to the boards of Hang Seng Index companies in the past year, according to a report released on Tuesday by the non-profit organisation Community Business.

That is an improvement of 7 percentage points on the previous 12 months.

Yet there are still fewer than two female directors for each of the 51 constituents.

The number of companies with an all-male board fell to 10, from 11 a year earlier.

The figure has fallen steadily since 2012, when 20 companies had no female directors.

However, three companies - Chinese technology giant Tencent, oil and gas producer CNOOC, and The Hong Kong and China Gas Company - have never had a woman on the board.

The challenge for those firms keeping up with the times is acquiring critical mass.

One woman risks becoming a token presence.

Two women can help make one another's voices heard.

But studies based on the work of Harvard Business School professor Rosabeth Moss Kanter suggest that at least three women are needed to secure benefits widely attributed to women, such as a better understanding of customers and employees, and a more collaborative leadership style.

These are valuable traits.

A McKinsey survey of more than 1,000 firms in 12 countries this year found that companies boasting better gender balance were 21 per cent more likely to outperform on profitability, as measured by earnings before interest and tax as a proportion of sales.

That is why, even in countries like India where there is a mandatory female board quota, there is debate on whether to increase it.

Either way, ensuring a larger female presence at the top requires a stable supply of talent.

Happily, many companies already have the raw resources.

Though they are haemorrhaging women in senior ranks, the gender balance tends to be more even at entry level.

Tracking both sexes' different performance, pay and departures helps employers to understand what needs to be done.

Keeping an open dialogue is crucial too.

Such measures make it more likely employers will notice and negotiate stress points - whether it is harassment or the challenges of caring for children and elderly relatives, responsibilities that are typically shouldered by Asian women.

Women are slowly on the rise but the multiplier effect applies to girl power too.

REUTERS

A version of this article appeared in the print edition of The Straits Times on March 09, 2018, with the headline 'Forging girl power in Asia's boardrooms'. Print Edition | Subscribe