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©2015 Community Business Limited. All rights reserve d. 1

Latest Community Business Research:

Women on Boards Hong Kong 2015

25 March 2015

©2015 Community Business Limited. All rights reserved .2

Sep 2009

Mar 2012

Mar 2013

Mar2014

Mar 2015

Women on Boards Report Series

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 women at board level in Hong Kong over time

� To provide companies with a focused benchmark against which to assess their own performance

� To acknowledge top performing companies and encourage others to follow their example


Methodology

� Data was collected from www.webb-site.com’s proprietary database

� Data captured and analysed by Community Business

� Review period: 3 January 2014 – 2 January 2015

� Data accurate as of 2 January 2015


A Concerted and Multi-Pronged Effort

Overall representation of women on boards

Dotted line denotes data unavailable for the period

8.9%2009

9.0%2012

9.4%2013

9.6%2014 2015

Mar 2009First Women on Boards Report by Community Business

Oct 2011HKExrevised the Code and Rules requiring 1/3 INEDs on all listed boards

Sep 2013Board Diversity Policy on ‘comply or explain’ basis

Mar 201330% ClubHong Kong Chapter

Apr 2013The Women’s Directorship Programme by HKU and Harvey Nash

June 2013Non-Executive Directors Diploma by Financial Times

Mar 2013Voluntary Code of Conduct by leading executive search firms

???


Are we moving the needle?… At first glance, it would seem YES


Double Digits for the First Time

� Out of a total of 655 directorships on the HSI, 73 directorships are held by women

Overall representation of women on boards of HIS in ching ahead

11.1%(73)

655

582 7373


Biggest Annual Increase Since 2009

� 73 directorships are held by 64 different women – a net increase of 11 women since 2014

� An increase in the number of women of 20.8% in the last 12 months – 3x the rate of the previous years


Top Ranking Companies Perform Better Than Last Year

36%

14%

29%

23%Top 10

% Range in 2014

28.6%

14.3%

Top 10 % Range in 2015

35.3%

16.7%

Top 10 Ranking Companies Score Higher

Company2014

% WOB2015

% WOB

No. of Women/ BoardSize

1 HSBC Holdings PLC 23.5% 35.3% 6/17

2 The Link Management - 30.8% 4/13

3 China Resources Power 23.1% 27.3% 3/11

Top 3 Ranking Companies


¾ of Companies with at Least One Female Director

� Nearly one-quarter of companies (24.0%) have at least 15.0% women on their boards, comparing to 18.0% in 2014.

� 15% is a percentage that is often cited as being the critical mass required to achieve culture change and allow companies to reap the benefits of gender diversity

� 36 out of 50 companies (72.0%) listed on the HSI have women on their boards

� Nearly three-quarters of HSI companies have at least one female director – up from 58.3% in 2012


But, the not so good news….


Improvement Driven by a Handful of Companies

� The overall improvement in performance is driven by a handful of companies

New Entrants on HSINo. of

Female Directors

China Mengniu Dairy 2

Galaxy Entertainment 1

Lenovo Group 1

The Link Management 4

� With a collective total of 8 new women on the boards of the 4 newly admitted companies, they account for a net increase of 6 female directors roles – two-thirds of the overall increase

� CITIC Ltd demonstrated the greatest improvement, increasing the representation of women on its board from 0.0% last year to 14.0% this year by introducing two women

Companies that left HSI

No. of Female

Directors

Aluminum Corp of China 0

China Coal Energy 0

COSCO Pacific 1

Esprit Holdings 1


¾ of Companies Show No Improvement

� 25 companies have seen no increase in the percentage of women on their boards since 2014

� 8 companies have actually seen the percentage of women on their boards reduce

� Excluding the four companies entering the HSI for the first time in 2014, 71.2% have seen no improvement

� Among the top 10, over half (55.6%) have either seen NO CHANGE: Cheung Kong, Swire Pacific; or A REDUCTION: Hang Seng Bank, Bank of Communications, MTRC in the percentage of women on their boards.


Virtually No Increase In Female Executive Directors

� The number of companies with female executive directors inched up from 12 to 13 women

� With the growth of the HSI from 42 companies in 2009 to 50 in 2015, represents just 26.0%

13(31.0%) 12

(25.0%)12

(24.0%)12

(24.0%)

13(26.0%)

2009 2012 2013 2014 2015

No. of companies with female executive directors

2009 2012 2013 2014 2015

15(7.0%)

15(6.7%)

15(6.9%)

16(7.1%)

17(8.0%)

No. of female executive directors

� No. of female executive directors crept up from 16 to 17 women in 2015 – 8% of the overall number of executive directorships

� This is an indicator of the female pipeline and whether companies are creating the right environment for women to reach the top.


Rate of New Appointments to Women Failing to Accele rate

� There were 109 new appointments to the boards of the HSI companies, of which 12 were made to women – 11.0%

109

12

97

NEW


Hong Kong Lagging Behind Global Counterparts

� With Hong Kong’s flat trajectory, the findings suggest that the efforts of these counterparts are currently proving more effective than that in Hong Kong.


Hong Kong Lagging Behind Global Counterparts

*Countries with quotas in place2015

4.9% 3.0% 2.6% 2.3% 2.0% 1.9% 1.5% 1.1%

Ranking by % Change0.6%

*

0.7% 0.4%

**

40.1% 20.4% 17.3% 16.9% 15.9% 12.4% 9.6% 9.0% 7.9% 6.5% 2.0%

2014

* * *

**

40.7%(All public limited

companies, Jun 2014)

*


In Summary

� Representation of women on boards reaches double digits for the first time – 11.1% up from 9.6% last year.

� Whilst there are signs of improvement and Hong Kong has the greatest increase in women on boards ever, closer examination reveals that this is driven primarily by the actions of a few.

� The concerted and multi-pronged effort has not translated into a faster pace of change.

� Hong Kong’s business leaders remain complacent - failing to see the business case and ignoring the call to action.

� Hong Kong, with its flat trajectory, is significantly lagging behind global counterparts.


Call To Action

Community Business calls upon Chairpersons and Business Leaders to:

� Review the findings in this report, share them with their board and consider the implications for their company.

� Set specific female representation goals and targets for the board and management.

� Ensure women are included in candidate slate for every board appointment.

� Aim to appoint at least 1 additional female director in the next year.

� Consider giving your female senior managers the opportunity to serve as a non-executive director at your company or at another company.

� Refer to Community Business' Improving Governance through Board Diversity: A Guide for companies listed in Hong Kong to formulate a relevant board diversity policy and create the right environment for change.


Call To Action

Hong Kong’s business leaders need to:

� Hold accountability for greater board diversity to build the best team for future success of their company.

� Appreciate the business case and understand this is not a women’s issue, but a business imperative to remain relevant and competitive.

� Take deliberate actions to drive up board diversity, including gender diversity.


Thank You

All information in this document is provided for general information only and is not in the nature of advice. It should not be relied upon for any purpose and Community Business Limited (CBL) makes no warranty or representation and gives no assurance as to its accuracy, completeness or suitability for any purpose. Inclusion of information about a company, programme or individual in this publication does not indicate CBL’s endorsement. Where cited, you should refer to the primary sources for more information. This report does not necessarily reflect the views of CBL member companies or the sponsors of this report. CBL reserves the right to make alterations to any of its documents without notice.

©2015 Community Business Limited. All rights reserved. Reproduction and dissemination of this document (in whole or in part) is not allowed without prior written permission of Community Business Limited and due acknowledgment of authorship. If use of this document (in whole or in part) will generate income for the licensee, prior written permission to that effect must be obtained from Community Business Limited. To obtain permission, write to [email protected].

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