The clock is ticking for Hong Kong boards

Reuters
Reuters

(The author is a columnist for Reuters Breakingviews. The opinions expressed are their own.)

HONG KONG (Reuters Breakingviews) – Hong Kong-listed companies have been ordered to embrace diversity. They must have at least one female director, according to the rules https://www.hkex.com.hk/News/Regulatory-Announcements/2021/211210news?sc_lang=en as of January 1. This will require action at $ 176 billion Meituan and $ 60 billion Xiaomi, which researchers at the Asian Corporate Governance Association count among 17 companies with all-male boards of directors in a study of the Top 100 issuers of the city.

Having qualified women on boards can trigger a virtuous circle. In the PMAC sample, almost a third of directors are women in Hong Kong companies that have a female chair, about double the usual rate. The figure is 25% for those who have a woman in charge of the nomination committee. But aggressive efforts to break up old boys’ clubs can also fail. In India, for example, tycoons appointed their wives and mothers-in-law as administrators to fulfill representational mandates. Alternatively, the high demand for unimaginative companies can result in the same women sitting on far too many boards.

Hong Kong businesses have until 2024 to comply. Now is plenty of time to get it right. Businesses that cannot or will not deserve more serious treatment. (By Katrina Hamlin)

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(Edited by Pete Sweeney and Thomas Shum)

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