Slow Progress on Gender Diversity in Asia-Pacific: MBA News

Gender diversity at boardroom level among Asia-Pacific’s largest companies is improving, albeit slowly, with female CEOs in the region continuing to be a distinct rarity, according to new report published by NUS Business School.

‘Diversity Matters: Adding Colour to Boards in APAC’ found that in many instances, recognition of gender diversity’s importance is not being backed up with concrete plans to improve a company’s showing.

The report, published by NUS Business School’s Centre for Governance, Institutions and Organisations (CGIO) and executive search firm, Korn Ferry, looked at 2013’s annual reports for the 100 biggest publicly listed companies (by market capitalization) in 10 countries within Asia-Pacific. It then analyzed the boardrooms of these companies – a total of 10,000 –for gender diversity.

Great variety in gender diversity across countries and industries

Overall, female executives were found to occupy an average of 9.4% of company board seats across Asia-Pacific, up from 8% in 2012. In the space of a year, seven of the 10 countries assessed had improved on their proportion of female board members, most notably in New Zealand and China. However, the region still produced hugely varied results, with proportions ranging from a meager 2.1% in South Korea to 18.6% in Australia – a figure comparable to those found among the US’s S&P 500 (19.2%) and the UK’s FTSE 100 (22.8%), according to the report.  

The report also found a great deal of variance between industries. Female representation on company boards was greatest in Asia-Pacific’s healthcare sector (13.6%), followed by real estate (12.5%) and finance (11.7%). According to the report, the worst industries in this respect were IT (6.5%) and two categories encompassing different areas of manufacturing; materials (7.2%) and industrial (5.8%).  

At CEO level, gender diversity figures were decidedly less promising throughout the region. Just 26 of 795 CEOs among the companies analyzed were female - a little over 3%. The strongest performer here, China, counted just four female CEOs to reach its proportion of 5.6%.

Further evidence of the extent of Asia-Pacific’s challenge can be found in the number of all-male boards – which remain a fixture in many of the region’s countries. South Korea and Japan were found to be the worst performers here, with all-male boards representing 84% and 68% of their totals respectively. Only in New Zealand was there a board to be found where women outnumbered men, and this board was made up of just three members.

NUS Business School finds link to company performance

On a brighter note, the NUS Business School report found that companies in Asia-Pacific with higher proportions of women on their boards performed better.

In this analysis, when women numbered 10% of a board or more, the company was found to enjoy a 3.6% higher Return on Equity (ROE) and a 1.3% higher Return on Asset (ROA). To put this in context, the study’s 1,000 companies showed an average ROE of 13.3% in 2013, and an ROA of 6.2%. The difference was most pronounced in Japan, where the ROE was almost 6% higher when women’s board presence was 10% or more.

This is the first time the Asia-Pacific report has found a link between female representation and company performance in its three-year history, according to a press release for NUS Business School, and something that may help many of the region’s firms to change its impression of gender diversity from something merely aspirational to something that can be an important component of success.