gender diversity, consultation process will end on June 18, representation of women in corporate boardrooms, Bonnie Chan, head of listing, leading ESG hub

About one-third of Hong Kong-listed companies will need to appoint at least one woman director by 2025 or face a penalty under a stock exchange proposal to catch up with progress in gender diversity efforts elsewhere. It can expect some strong opposition.

The proposal, which forms part of new environment, social and governance (ESG) rules put forth by Hong Kong Exchanges and Clearing (HKEX), also requires all new listing candidates to have at least one woman on their boards at the time of going public. Existing listed entities will be given a three-year window to comply.

A two-month consultation process will end on June 18 and both requirements are deemed controversial as they could be implemented from January 1, 2022. The exchange, disappointed with the current rate by listed companies, is also seeking mandatory disclosure on the progress leading to their numerical targets and timelines at board-level and across workforce.

“Diversity is an important driver of the board’s effectiveness,” the exchange said, according to the consultation paper. “It brings unique perspectives to the boardroom and enhances board performance” and single-gender boards are “not acceptable,” it added.

gender diversity, consultation process will end on June 18, representation of women in corporate boardrooms, Bonnie Chan, head of listing, leading ESG hub

Pedestrians in face masks are seen outside the HKEX’s headquarters at Exchange Square in Central, Hong Kong. Photo: Sam Tsang

While Hong Kong prides itself as the third-largest stock market in Asia-Pacific and a favourite listing venue over the past decade or so, representation of women in corporate boardrooms left much to be desired and lagged behind some emerging and developed markets.

More than 800 listed companies, or about 32 per cent, had all-male board members while the rest had at least one woman as a director at the end of 2020, according to exchange data. There were 2,550 listed companies in Hong Kong in May, with a combined market capitalisation of HK$53.3 trillion (US$6.9 trillion), according to exchange data.

The shortfall was also noticeable for Hong Kong-domiciled companies represented in some of MSCI’s influential global indices.

Within the MSCI All-Country World Index, they stood at 12.7 per cent in October 2020 versus 12.4 per cent in 2019, according to a report published by the MSCI group in November. Hong Kong was among the few markets which saw an increase in the number of all-male boards, to 37 per cent from 32 per cent over the same period.

“At HKEX, we are committed to enhancing the quality of our market, and this consultation focuses on improving a range of corporate governance standards,” Bonnie Chan, head of listing, said in April when announcing the consultation. Improving board diversity could help enhance Hong Kong’s position as a leading ESG hub in Asia.”

Under the proposal, failure to comply could attract a range of penalties from a public reprimand to denial of access to fundraising facilities, training, suspension of trading and a delisting.

gender diversity, consultation process will end on June 18, representation of women in corporate boardrooms, Bonnie Chan, head of listing, leading ESG hub

Head of Listing Bonnie Chan in an October 2020 file picture. Photo: Winson Wong

While some industry groups are on board with the stock exchange’s gender diversity agenda, the proposal has stoked opposition to the compulsory nature of the requirements.

“We support the direction for diversity in board membership but it should not just focus on gender,” said Stephen Law, a council member of Hong Kong Independent Non-Executive Director Association. “It should also consider age, knowledge, industry and culture, and we prefer the exchange to not adopt a compulsory approach.”

Some industries such as construction, information technology and certain manufacturing sectors have found it difficult to recruit women directors, he said by phone. Companies with all-male boards should be given a chance to explain their circumstances, he added.

These groups included Meituan, JD.com, China Mobile and Xiaomi Corp, according to the MSCI report. In mainland markets, it highlighted Kweichow Moutai, Citic Securities, Hangzhou Hikvision and China Petroleum and Chemical Corp.

gender diversity, consultation process will end on June 18, representation of women in corporate boardrooms, Bonnie Chan, head of listing, leading ESG hub

Kweichow Moutai is among top 25 companies with all-make board members, according to an MSCI report in November. Photo: Bloomberg

Mike Wong, chief executive of the Chamber of Hong Kong Listed Companies, said a quota or compulsory stipulation “would not be ideal.”

Company directors should be appointed “because of their knowledge and ability, and not due to their gender,” he added.

Also among the stock exchange supporters is Allan Zeman, chairman of Lan Kwai Fong Group who also sits on the board of six listed companies.

“[Women] can bring different perspectives to the boardroom,” he said by phone. “There are a lot of talented women in town with different professional [qualifications] and backgrounds. Companies may need to spend some effort to recruit [them], but it is not mission impossible.”

Au King-lun, executive director of the Financial Services Development Council, an advisory body for Hong Kong’s strategic development as an international financial centre, said it was already an international trend to have more women in boardrooms.

Some emerging and developed markets have made board representation by women mandatory with specific target ratios and milestones, while others have turned to a comply-or-explain model, according to the MSCI report.

“It is the right direction and I fully support the HKEX proposal,” said Winnie Wong, chief executive of Asia Insurance. “Currently it’s still an old-boys club for [many] listed companies in Hong Kong,” she said, adding that those already with women as members are narrowly represented by a few popular ones, or those with family connections.


Japan travel news, japan travel guides, japan holiday destinations and japan reviews

LATEST NEWS

NEWS RELATED

Exchange Fund posts US$6.6 billion second-quarter gain, giving Hong Kong more firepower to defend city’s currency

Hong Kong’s Exchange Fund, the war chest used to defend the local currency from attacks by short sellers, earned HK$51.4 billion (US$6.6 billion) from its investments in the second quarter as it benefited from gains in overseas equity markets and on its bond portfolio, according to the Hong Kong Monetary…

Read more: Exchange Fund posts US$6.6 billion second-quarter gain, giving Hong Kong more firepower to defend city’s currency

China steel export tariffs considered as Beijing seeks to cool booming sector amid price surge

China is considering imposing more tariffs on steel exports as it seeks to achieve twin goals of capping domestic production and taming the surging prices that have fanned concerns about inflation. Potential rates being discussed range from 10 to 25 per cent and products include hot-rolled coil, according to two…

Read more: China steel export tariffs considered as Beijing seeks to cool booming sector amid price surge

Lee Man-tat, head of Lee Kum Kee sauce empire, dies at 91

Oyster sauce tycoon Lee Man-tat, chairman of Lee Kum Kee Group, has died. He was 91. The company said in a statement that Lee died on Monday, surrounded by family members. “Mr. Lee was an inspirational leader with a unique and forward-looking vision. He constantly brought new insight and momentum…

Read more: Lee Man-tat, head of Lee Kum Kee sauce empire, dies at 91

Tencent super app WeChat suspends new user registrations until early August for ‘security upgrade’

WeChat, the multipurpose super app operated by Chinese internet giant Tencent Holdings, has suspended new user registrations until August so it can conduct a “security upgrade” to comply with “relevant laws and regulations”, following Beijing’s intensified scrutiny of the country’s internet industry. “We are conducting a security technical upgrade in…

Read more: Tencent super app WeChat suspends new user registrations until early August for ‘security upgrade’

Skittles launches Zero-G after Jeff Bezos brought the candy to space

Photo by: Skittles Press Release Skittles wants to brag about its new accomplishment of having gone to space, and to do this, the candy maker is releasing the Zero-G. This is the limited edition of the colored, fruity flavored candy. The new Zero-G offering As per Fox Business, Skittles is…

Read more: Skittles launches Zero-G after Jeff Bezos brought the candy to space

Amazon: Bitcoin’s price soars after the e-commerce giant was assumed to enter cryptocurrency

Photo by: Bryan Angelo/Unsplash Amazon just sent the prices of Bitcoin soaring after it was reported that it may be entering the cryptocurrency business too. As soon as it was speculated that the e-commerce retail giant is getting into the world of crypto, the Associated Press reported that Bitcoin surged…

Read more: Amazon: Bitcoin’s price soars after the e-commerce giant was assumed to enter cryptocurrency

Starbucks Korea: Shinsegae’s Emart may fully own the coffee chain in S. Korea

Photo by: Ira Ostafiichuk/Unsplash Shinsegae’s retail unit, Emart, may fully acquire Starbucks Korea as it is said to be in talks for the possibility of buying another 50% stake in the company. Currently, Emart owns 50% shares, and the remaining half is still owned by the coffee chain’s American headquarters.…

Read more: Starbucks Korea: Shinsegae’s Emart may fully own the coffee chain in S. Korea

China’s carbon neutral goal: Non-fossil fuel capacity will soon surpass coal power’s, though much of it remains unused

China’s capacity for generating power from non-fossil energy is poised to exceed that of coal power plants by the end of the year, according to the China Electricity Council. However, the carbon-intensive fuel will still dominate the nation’s power supply for years to come because so little of the capacity…

Read more: China’s carbon neutral goal: Non-fossil fuel capacity will soon surpass coal power’s, though much of it remains unused

Christie’s Asia to hold year-round sales at new headquarters in Hong Kong from 2024

Philip Morris reveals plans to stop selling Marlboro products in 10 years

Samsung Display, LG Display displaced by China’s BOE Technology as the world’s No. 1 display maker

Sudoku Is Good For Allaying Your Inflation Anxiety

Perth's Solution Tech acquires Swish Online

Evergrande reneges on special dividend two weeks after pledging it, in a surprise U-turn that sends shares, bonds crashing

NFT: Korean companies are joining the digital blockchain market trend

Henan floods to trigger record insurance claims of US$1.7 billion as thousands of cars, property damaged

OTHER NEWS