Hong Kong’s bourse operator has declared victory in its quest to eliminate all-male boards from companies listed on the region’s third-largest stock exchange, an improvement in corporate governance that analysts said would help attract international investors.
Fewer than 10 of Hong Kong’s around 2,600 listed companies had all-male boards as of the end of June, according to Hong Kong Exchanges and Clearing (HKEX). A spokesman said these exceptions were companies that had long been suspended from trading or were merely out of compliance temporarily because of a resignation.
Eighty-five companies had all-male boards on January 1 when HKEX’s ban on single-gender boards went into effect. In 2022, when the bourse operator unveiled the ban, more than 800 firms – or 40 per cent of listed companies – did not have a woman director.
“This requirement helped to create hundreds of new roles for female directors, reinforcing our commitment to fostering a more inclusive and diverse corporate environment and enhanced governance in our markets,” said Katherine Ng, HKEX’s head of listing, in a statement to the Post.
An example of a non-compliant company is property investment firm Paladin, which has six male board members. Its shares were suspended from trading in November because of insufficient business operations. To resume trading, the exchange would require a new business operation plan and at least one woman would need to join the board, the company said in February.
More than 800 women had been added to listed companies’ boards in the past four years, HKEX said. As of June, 21 per cent of directors were women, up from 20 per cent six months ago and 16 per cent four years ago when the single-gender ban was unveiled. The number of boards with multiple women increased to 43 per cent as of June from 35 per cent in 2022, and 21 per cent of listed companies now had boards where women accounted for a third of the directors.
“Ensuring more women on boards is a fundamental reform for listed companies anywhere, and it is confidence-building for investors to see HKEX taking definitive measures to move this along,” said Damien Green, a director of the Financial Services Development Council, a government agency that promotes the city as an international financial centre.
Green cited the ban on all-male boards as a factor that helped the exchange’s main board return to the top of the global league table for initial public offerings (IPOs) in the first half of the year.
“Strengthening corporate governance in the HKEX listing rules will not slow our market down but instead will help accelerate it, as international investors find yet another reason to have confidence in deploying their capital in Hong Kong,” he said.
Funds from Hong Kong’s IPOs soared eightfold to US$13.5 billion in the first six months, making the city’s exchange the world’s top IPO venue for the first time since 2019, according to data from the London Stock Exchange Group.
Despite progress, Hong Kong-listed companies trail their global peers in gender diversity on their boards.
Globally, 27 per cent of board seats among around 3,000 companies in the MSCI All Country World Index were occupied by women as of 2024, up 1.5 per cent from a year earlier, MSCI said in February.
Edmund Wong, a lawmaker for the accountancy sector, said he supported HKEX in promoting gender diversity, but added that the ability of directors was also important and that women with relevant experience could be in short supply in certain sectors.
“Listed companies in the construction sector or engineering may not easily find a lot of women,” Wong said. -- SOUTH CHINA MORNING POST
