Tackling Gender Diversity in Hong Kong
Despite the pressure that HKEx has put on listed companies to improve gender diversity in the workplace since 2013, women still only account for a disappointing 11.3% of directors of Hang Seng Index constituent companies in Hong Kong. With countries such as Norway having this figure quadrupled at 40%, and the APAC average being 23%, Hong Kong is seriously falling behind the rest of the world.
Benefits of Gender Diversity
It’s well documented how the benefits of having more women in the boardroom span beyond equality and fairness. However, there’s an even more significant business case to be made. Women providing differing perspectives and insights positively impacts performance. A study by McKinsey, for example, found that top quartile companies with more women in executive positions had 41% higher ROE and 56% better operating results than their more homogenous counterparts.
Countries such as India have imposed quotas on female directors in listed companies as a solution to lessen the gender gap. The problem with quotas, however, is that this top down approach only addresses the rules of corporate governance. It does not appreciate one of the most significant underlying causes of gender imbalance.
New research at MIT Sloan School of Management suggests that a significant reason for the lack of women in top-level jobs is that they self-steer away from these positions. The research argues that as a result of gender-based stereotypes, women anticipate being discriminated against for senior positions and therefore self-select themselves out of the application process. In reality, the research also found that women are actually no less likely to be hired than men.
The Best Way Forward
With this discrepancy in mind, I think that the best way for Hong Kong to start taking gender diversity seriously is to shift women’s mindsets about what they are capable of achieving. This should be combined with companies investing more into developing female leaders who can climb up the corporate ladder. Companies should especially work together with schools and universities in order to allow young girls and women to overcome gender-based stereotypes and to realize their potential from an early age. From a recruitment perspective, companies that support and empower the next generation of women will undoubtedly also stand out as the employers of choice.