Hong Kong: Clock Is Ticking for A New Corporate Governance Structure

Hong Kong-listed companies are under orders to embrace diversity. They must have at least one female board director, per rules effective Jan. 1. That will require action at $176 billion Meituan (3690. HK) and $60 billion Xiaomi (1810. HK), which researchers at the Asian Corporate Governance Association count among 17 companies with all-male boards in a study of the city’s top 100 issuers.

Having qualified women on boards can kickstart a virtuous cycle. Within the ACGA sample, almost a third of directors are women at Hong Kong companies that boast a female chair – around double the usual rate. The figure is 25% for those with a woman in charge of the nomination committee. But forceful efforts to break up old boys’ clubs can also misfire.

In India, for example, tycoons appointed their wives and stepmothers as directors to meet representation mandates. Alternatively, high demand from unimaginative companies can result in the same women serving on far too many boards.

Hong Kong companies have until 2024 to comply. That’s plenty of time to get it right. Companies that can’t, or won’t, will deserve more serious treatment.

SOURCE: REUTERS
IMAGE SOURCE: PIXABAY