Initial findings in a board diversity study by Korn/Ferry International has found that female representation on boards of directors in the Asia Pacific region remains low and that female directors have different demographic characteristics compared to male directors.
Despite an increasing recognition for boards to incorporate diversity considerations, including gender, when appointing directors, the study found the percentage of female directors continues to be low across the region. More than 70 percent of boards in five countries – Hong Kong, India, Malaysia, New Zealand and Singapore - have no female independent directors. Boards with three or more female directors were rare, while boards with three or more female independent directors were almost non-existent.
The findings are part of a broader study on board diversity undertaken by Korn/Ferry and led by Associate Professor Mak Yuen Teen of the NUS Business School at the National University of Singapore, who is a recognized authority on corporate governance in Asia.
The study, which claims to be the first in the Asia Pacific region to focus on board diversity, covers the largest 100 domestic companies by market capitalization in Australia, Hong Kong, India, Malaysia, New Zealand and Singapore. The study compares the extent to which female and male directors hold key leadership positions on boards, as well as the profiles of female and male directors in these countries. A total of 4,663 directors holding a total of 5,384 directorships in these companies were included in the study.
“The world is taking notice of the potential and power of women – as consumers, as leaders and as a growing majority of the talent pool,” saya Alicia Yi, managing director strategic client services of Korn/Ferry International Asia Pacific. “There has been an increasing demand for female board candidates across the globe as companies start to recognize that successful boards should reflect the markets they serve and that homogenous leadership teams can be less equipped to do
business in an increasing complex business environment.”
The study also found a key number of differences between the demographic characteristics of female and male directors. Female directors are younger than male directors across all countries, by about three years on average. Female directors were more likely than male directors to have law or accounting educational backgrounds, while male directors were more likely to have engineering and science backgrounds. Another finding is that the average tenure of female independent directors is shorter than male directors across all countries.
“A lot of leading companies are now taking diversity, including gender diversity, issues quite seriously – setting employee targets, tracking and looking for ways to improve – as increasing evidence suggests that more diverse boards and management teams can be more effective,” said Yi. “As Asia continues on its growth path and becomes a critical component of the global economy, I have no doubt that the whole issue of board diversity and composition will accelerate as companies recognize that the most effective boards will be the ones that are international - and with more functional, sector and gender diversity.”
According to the study, female directors are generally underrepresented in board leadership positions such as board chairs and board committee chairs. Meanwhile, Australia has the highest percentage of female directors with 11.2 percent of all directors being female.
Another finding is that the percentage of female directors varies among executive directors, non-independent non-executive directors, and independent non-executive directors. Hong Kong has the highest percentage of female executive directors; Malaysia has the highest percentage of female non-independent non-executive directors; and Australia has the highest percentage of female independent non-executive directors.
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