Women on Boards Hong Kong 2019

Latest Community Business Research: Women on Boards Hong Kong 2019

Media Briefing 7 March 2019

Objectives: ▪ To keep the spotlight on this issue and continue to drive positive change in Hong Kong

▪ To identify and track the participation rate of Mar women at board level in Hong Kong over time Mar 2019 ▪ To provide companies with a Mar 2018 focused benchmark against Mar 2017 2016 which to assess their own Mar performance Mar 2015 2014 ▪ To acknowledge Mar top performing 2013

companies & Mar encourage 2012 others to Sep follow their 2009 example

▪ Data was collected from webb-site.com and analysed by Community Business

▪ Other information from official sources and company websites

▪ Review period: 3 January 2018 – 2 January 2019

▪ Data accurate as of 2 January 2019

Online Resource: ▪ Provide quarterly updates on the state of women on boards in Hong Kong ▪ Offer easily accessible historical data showing the trajectory of women on boards in Hong Kong ▪ Offer in-depth analysis and recommendations for anyone with an interest in building gender-diverse organisations including chairpersons, existing and aspiring board directors, business leaders, media, and companies across all sectors and industries

8 March 2019

#BalanceForBetter

611 ▪ Marginal increase of 0.1% in the last year Directorships ▪ Out of 611 directorships, 85 held by women. ▪ Steep increase of 6.1% (38 women)* needed to 526 85 meet 30% Club HK target of 20% by end 2020.

13.9% 13.8% Target: 87/632 85/611 20% by 2020 12.4% ▲ 0.1% 78/628 11.1% 11.1% 73/655 71/638

9.4% 9.6% 8.9% 9.0% 61/649 64/668 52/585 57/634

2009 2012 2013 2014 2015 2016 2017 2018 2019

Percentage of Women on HSI Boards

▪ Number of all-male boards remains at 10 (same as a year ago). ▪ 30% Club HK target of ‘no zeros by the end of 2018’ not achieved.

Target: 25 No “Zeros” by 2018

20 19 20 16 16 14 14 15 12 11 10 10 10 9 10

7 7 No. No. Companiesof 5 5 4 5

0 2009 2012 2013 2014 2015 2016 2017 2018 2019

No. of companies with all-male boards No. of companies who have never had female directors

▪ Number of all-male boards remains at 10 (same as a year ago)

(Newly added to Hang Seng Index in June 2018)

These 5 companies have never had any women on their boards since becoming Hong Kong listed.

▪ Percentage of companies with female executive directors higher than ever before (38.0%).

25 25 (11.4%) (11.6%) Female executive directorships 19 17 17 (8.9%) 16 Companies with 15 15 15 (8.0%) (7.9%) (7.1%) 19 19 female executive (7.0%) (6.7%) (6.9%) (37.3%) (38.0%) directors 15 13 13 13 (30.0%) (31.0%) 12 12 12 (26.0%) (26.0%) (25.0%) (24.0%) (24.0%)

2009 2012 2013 2014 2015 2016 2017 2018 2019

Female Executive Directorships on HSI Boards

▪ Three companies with a female Chairperson, up from only one during the period 2011-2018.

Laura CHA Theresa TSE YANG Huiyan Chairperson Chairperson Co-Chairperson

▪ In the last year, there were only 6 appointments to women among HSI companies. During this same period, 82 men were appointed to HSI boards. ▪ This is the lowest rate of female appointments since 2009 and in sharp contrast to the previous year which boasted the highest rate ever.

93.2% 89.9% 90.4% 87.3% 88.8% 88.3% 89.0% 88.8% (82) (62) (75) 84.9% (55) (79) (68) (97) (71) (90) 81.1% (73)

18.9% 12.7% 15.1% (17) 11.2% 11.7% 11.0% 11.3% (8) 10.1% 9.6% (16) (10) (7) (9) (8) (12) (9) 6.8% (6)

2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019

New Male Appointments New Female Appointments

YANG Huiyan May TAN Rose LEE Co-Chair INED INED Country Garden Holdings CLP Holdings MTR Corporation

Leonie KI LAI Hong Yee Laura CHA NED ED INED, CH New World Want Want China Hong Kong Exchanges Development Co. Holdings & Clearing

First-time director

▪ 18 companies currently

13 HSI constituents have had only one female director since 2015 (5 years)

Reaching Critical Mass: Three women in the boardroom is the tipping point for real culture change to occur and for companies to truly reap the benefits of gender diversity* Appointing a sole woman can appear as tokenism and she might struggle to be heard, but three women changes the dynamics in the boardroom. We encourage these leading companies to appoint more women to their boards to truly realise the benefits of gender diversity.

*Source: Erkut, S., Kramer, V.W. and Konrad, A.M. (2008), ‘Critical mass: Does the number of women on a corporate board make a difference?’ 14 © 2019 Community Business Limited. All rights reserved. Pipeline of Female Talent

▪ Only one HSI company with a female CEO

Louisa CHEANG

▪ This has remained constant (at one) for most of the last decade, only rising to two in 2015 and 2016 with Mengniu Dairy being added to the HSI in 2014 ▪ Hong Kong fares poorly on female CEO’s compared with other key markets:

FTSE 100 UK 6.0% Nov 2018 Source: Telegraph

S&P 500 US 4.8% Jan 2019 Source: Catalyst

3 women holding 6 women holding 3 HSI directorships (9 directorships in total) 2 HSI directorships (12 directorships in total)

64 women holding 1 HSI directorship (64 directorships in total)

Angelina LEE WONG Anita FUNG Elsie LEUNG Fanny LAW FAN Irene LEE 1. CK Infrastructure 1. China Construction 1. China Life Insurance 1. China Unicom (HK) 1. Hang Seng Bank 2. Henderson Land Bank 2. China Resources Power 2. CLP Holdings 2. HSBC Development 2. Hang Lung Properties 3. PetroChina 3. DTXS Silk Road 3. Cathay Pacific Airways 3. Great Eagle 3. HK Exchanges & 4. United Company Rusal Investment 4. Hysan Development 4. Tom Group Clearing 4. Minmetals Land 5. Noble Group 5. Nameson

Laura CHA Margaret LEUNG KO May TAN Rose LEE 1. HK Exchanges & 1. HK Exchanges & 1. CLP Holdings 1. CK Hutchison Clearing Clearing 2. Link REIT 2. MTR Corporation 2. HSBC 2. Li & Fung 3. Swire Pacific 3. Sun Hung Kai Properties 4. Hutchison Whampoa 4. First Pacific

Purple text denotes non-HSI companies listed in Hong Kong. Excludes international boards.

There is a large pool of talented and experienced women in Hong Kong and Asia who can be considered for board roles

Women with directorships Women with directorships on HSI boards on non-HSI boards

TWF’s Women to Watch List Women on NGO boards

Women on Graduates from directorship international boards training programmes

Retired professionals Women on advisory boards

Senior female executives of companies

We encourage companies to cast the net wider and consider leveraging the expertise of executive search firms which specialise in board appointments

Stock No. of Women / Ranking Company % Women Code Board Size 1 Hang Seng Bank 11 38.5% 5 / 13 2 Sino Biopharmaceutical 1177 36.4% 4 / 11 3 HSBC Holdings PLC 5 35.7% 5 / 14 4 Link Real Estate Investment Trust 823 33.3% 4 / 12 5 China Shenhua Energy 1088 30.0% 3 / 10 6 Bank of China 3988 25.0% 3 / 12 6 MTR Corporation 66 25.0% 5 / 20 8 CK Infrastructure Holdings (BM) 1038 23.5% 4 / 17 9 CK Asset Holdings 1113 23.1% 3 / 13 9 Hong Kong Exchanges & Clearing 388 23.1% 3 / 13 TOP 10 Average improved by 0.8% to 28.9% Boast an average of 3.9 female directors TOP 5 Have at least 30% female directors 19 © 2019 Community Business Limited. All rights reserved. League Table - Top Ranked Companies

YOY % of Rank Company Commentary Change Women

Regained top spot for 1 38.5% the first time since 2014 2

New HSI constituent this 2 36.4% year Female chairperson

Ranked in top 5 almost 3 35.7% every year 2 (except 2009 & 2017)

YOY % of Rank Company Commentary Change Women Number of female directors fluctuated 6 25.0% between 0 and 4 since 3 2009.

Steadily increased female directors since 2014. 9 23.1% Appointment of Laura Cha 10 as Chairperson in 2018.

First female director 38 6.7% appointed in 2018. 12

YOY % of Rank Company Commentary Change Women Highest ranking 4th in 2017. Decline in last year 28 10.0% attributed to loss of one 22 female and appointment of 4 male directors.

Decline in last year 38 6.7% attributed to loss of one 12 female and appointment of 2 male directors.

All PLC FTSE 100 ASX 200 S&P/TSX 60 S&P 500 Top 100 NZX Top 100 NIFTY500 HSI 50 All Public Listed Public Listed Listed Co.

29.0% 28.4% 28.4% 24% 23.2% 20.5% 15.2% 14.0% 13.9% 4.1% - 2019 Jun 2018 Oct 2018 Jul 2018 May 2018 Q3, 2018 Jun 2018 Dec 2018 Mar 2018 Jan 2019 Jul 2018

42.1% 27.7% 26.1% 26.0% 21.2% 19.1% 17.8% 13.1% 13.3% 13.8% 3.7% 2018 Jan 2017 Oct 2017 Dec 2017 Jul 2017 Nov 2017 Sep 2017 Jun 2017 Dec 2017 Mar 2017 Jan 2018 Jul 2017

41.6% 26.8% 25.1% 24.0% 21% 16.6% 17.1% 10.9% 12% 12.4% 3.4% 2017 Jan 2016 Oct 2016 Dec 2016 Apr 2016 May 2016 Dec 2016 Sep 2016 Dec 2016 Mar 2016 Jan 2017 Jan 2017

41.0% 26.1% 21.5% 22.6% 20.0% 16.8% 9.5% 11% 11.1% 2.8% - 2016 Mar 2015 Oct 2015 Nov 2015 Sep 2015 Nov 2015 Sep 2015 Dec 2015 Mar 2015 Jan 2016 Jul 2015

40.7% 24.0% 19.3% 20.8% 19.2% 14.4% 8.6% 6% 11.1% 1.5% - 2015 Jun 2014 Oct 2014 Oct 2014 Oct 2014 Oct 2014 Sep 2014 Dec 2014 Mar 2014 Jan 2015 Mar 2015

Quota 40% None for corp Listed 30% women Listed boards; 50% companies on senior companies’ for boards for headquartered management board with govt-owned in California ≥1 and boards ≥1 woman enterprises in woman by end Quebec 2019

Aspirational 33% by 30% by 40% by 30% by 30% proposed 20% by 20% by 20% by 2020; 7% by 2020 2020 2018 (AICD) 2025 2020 by Global 2020 2020 No all-male Target Woman boards by 2018

All PLC FTSE 100 ASX 200 S&P/TSX 60 S&P 500 Top 100 NZX Top 100 NIFTY500 HSI 50 All Public Listed Public Listed Listed Co.

29.0% 28.4% 28.4% 24% 23.2% 20.5% 15.2% 14.0% 13.9% 4.1% - 2019 Jun 2018 Oct 2018 Jul 2018 May 2018 Q3, 2018 Jun 2018 Dec 2018 Mar 2018 Jan 2019 Jul 2018

42.1% 27.7% 26.1% 26.0% 21.2% 19.1% 17.8% 13.1% 13.3% 13.8% 3.7% 2018 Jan 2017 Oct 2017 Dec 2017 Jul 2017 Nov 2017 Sep 2017 Jun 2017 Dec 2017 Mar 2017 Jan 2018 Jul 2017

41.6% 26.8% 25.1% 24.0% 21% 16.6% 17.1% 10.9% 12% 12.4% 3.4% 2017 Jan 2016 Oct 2016 Dec 2016 Apr 2016 May 2016 Dec 2016 Sep 2016 Dec 2016 Mar 2016 Jan 2017 Jan 2017

41.0% 26.1% 21.5% 22.6% 20.0% 16.8% 9.5% 11% 11.1% 2.8% - 2016 Mar 2015 Oct 2015 Nov 2015 Sep 2015 Nov 2015 Sep 2015 Dec 2015 Mar 2015 Jan 2016 Jul 2015

40.7% 24.0% 19.3% 20.8% 19.2% 14.4% 8.6% 6% 11.1% 1.5% - 2015 Jun 2014 Oct 2014 Oct 2014 Oct 2014 Oct 2014 Sep 2014 Dec 2014 Mar 2014 Jan 2015 Mar 2015

Aspirational 33% by 30% by 40% by 30% by 30% proposed 20% by 20% by 20% by 2020; 7% by 2020 2020 2018 (AICD) 2025 2020 by Global 2020 2020 No all-male Target Woman boards by 2018

Hong Kong Singapore Data Point HSI HSI50 50 Top 100Top 100

Representation of women 13.9% 15.2%

Top ranked company – representation of women 38.5% 44.4% Top 10 - Average % women on 28.9% 32.8% boards (39/135) (41/125) Top 10 - % companies who made 20.0% 37.5% female appointments in 2018 (2/10 companies) (6/16 companies) Rate of female appointments in 2018 6.8% 24%

Hong Kong must take action or risk being overtaken by more Asian counterparts

Multi-pronged campaign run by Council for Board Diversity*: ✓ Government-backed initiative to raise awareness and stimulate serious conversation. ✓ High profile Council membership with 2-year term • Co-chaired by CEO of Singapore Exchange, and Chair of National Volunteer & Philanthropy Centre • Patron is President Halimah Yacob • 20 influential Council members representing business, NGO’s, public bodies ✓ Data-driven reporting • Naming and shaming companies that do not increase female representation • League table published twice a year • Research showing impact on corporate performance ✓ Engaging with board decision makers • High profile chairmen advocating for change • Events to raise visibility and awareness ✓ Maintaining a list of female candidates ✓ Scope expanded to include statutory and non-profit boards since January 2019. * Previously Diversity Action Committee (DAC) 26 © 2019 Community Business Limited. All rights reserved. Performance of Chinese Companies

▪ There are 29 Chinese companies on HSI (58.0%) which are domiciled or headquartered in Mainland China or Chinese family-controlled* ▪ Average 10.6% women on their boards ▪ 8 out of these 29 Chinese companies have no women on their boards:

▪ 3 Chinese companies are in the top 10 of the League Table:

▪ Lack of understanding of the business case • Despite global movement and a growing body of evidence linking board diversity with better company performance ▪ Lack of visible champions • Vocal board level advocates and champions from the local business community need to drive the conversation ▪ Legacy board positions • Lengthy board tenures and lack of board renewal limit opportunities for increasing board diversity ▪ ‘Old Boys Network’ / family ties • Can lead to over-boarding • Limited use of executive search firms ▪ Unconscious bias • Gender stereotyping and other biases preventing meritocratic decision- making

▪ In the last year, there has been a stagnation in the representation of women on Hong Kong’s blue chip boards • A paltry 0.1% increase in the last year • Enlightened companies continue to do well • Majority of companies doing very little ▪ Aspirational targets do not appear to be galvanizing change • Target of zero all-male boards by the end of 2018 was not met • Next target of 20% women by end 2020 is unlikely to be met given Hong Kong’s complacency ▪ Hong Kong is falling further behind • Within the region, other jurisdictions are making significant progress, particularly India and Singapore, which have overtaken Hong Kong • Globally, many markets continue to make progress and are even raising their targets

Hong Kong’s reputation as a leading international financial centre is being undermined by the lack of action on women on boards

Chairpersons & Nomination Companies Women Committees

Chairpersons & Nomination Committees

▪ Demonstrate leadership and an understanding of the business case by appointing women directors ▪ Implement a board renewal process to ensure that your board remains relevant and well positioned to steer your company for long term sustainability • Review your board’s composition and structure to diversity and strengthen the board by securing the right balance of skills, knowledge, experience, and independence • Create the environment for fresh ideas and innovation to flourish by appointing new directors • Widen your search when recruiting new directors, including engaging an executive search firm ▪ Foster a boardroom culture which encourages a diversity of perspectives and healthy debate, while mitigating group think ▪ Be a visible champion of change and demonstrate your commitment by joining the 30% Club 32 © 2019 Community Business Limited. All rights reserved. Call to Action

Companies

▪ Set the tone from the top that gender diversity is a strategic priority for your company ▪ Engage male leaders to support gender diversity and act as champions of change ▪ Invest in your female leaders through professional development and mentoring ▪ Create a supportive culture and environment to promote the advancement of women, to plug the leaking pipeline, and mitigate unconscious bias ▪ Allow your senior female leaders to serve on external boards to build their experience and contribute to the wider pool of female talent ▪ Drive leadership accountability by setting goals and targets, and benchmarking progress 33 © 2019 Community Business Limited. All rights reserved. Call to Action

Women

▪ Be an advocate and role model for other women, especially those who are not in a position to advocate for themselves ▪ Take advantage of opportunities to learn and gain skills and experience, and to build your reputation ▪ Increase your visibility through networking and being strategic about finding a mentor, sponsor, or advisor ▪ Link up with an executive search firm to position yourself for board placement ▪ Volunteer to serve on an NGO or advisory board to bolster experience and profile, and to expand your network

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