Men still rule Hong Kong board rooms

Some 40% of Hang Seng Index companies had no women directors in 2011.

the Hong Kong Exchanges & Clearing Ltd proposes to change this under-representation.

HKEx began a consultation in September proposing that the nomination committee (or a company's board) should have a policy promoting gender diversity in the boardroom, and should disclose the policy or have a policy summary in the corporate governance report.

According to a research conducted by the Hong Kong Institute of Chartered Secretaries (HKICS) about board diversity among all Hang Seng Index companies, 40% had no female directors in 2011.

In May 2012, the total number of directorships was 13,397, including 1,380 held by women or less than 10%, according to HKEx data. The number of female directors has not seen a substantial increase over the past five years.

Edith Shih, HKICS president, said that most listed companies and professional groups that participated in HKEx's consultation were very supportive of its proposals.

"Although the consultation period will last till Nov. 9, the answer (to its proposals) seems ready to come out," said Shih, adding that a more diversified board is a major trend.

Shih stressed that the lack of women among Hong Kong's board of directors was not a result of the city having a small number of women professionals.

"Around 64% of HKICS members are women, and 48% of them are accountants in Hong Kong and 46% are lawyers (in the city)," said Shih.

She also pointed out that according to the research, the proportion of female directors in H-share companies are higher than it was in all HIS companies. By 2011, around 11.04 percent of all board of directors of H-share companies were women, while the proportion was 8.32 percent for all HIS companies.

Researches have shown that better business outcomes are associated with board diversities. According to a research report issued by Credit Suisse which analyzed 2,400 companies (MSCI all Country World Index), the conclusions drawn were that companies with at least one woman on board would have outperformed stocks with no women on board by 26% over the last six years.

Stocks with greater gender diversity also tend to perform best when markets are falling, according to the report.

HKICS's research also found that the average age of directors in 2011 is over 58, and has risen in recent years. Over three quarters of directors are over 50; more than half have five years or less service on their boards, which is a not surprising compared to the general impression of longevity of board appointments in Hong Kong.