Spotlight on Mainland China and Hong Kong

In mainland China, 71 out of the 102 companies (70%) in our study had at least one woman on their board, and in Hong Kong 66 out of 79 companies (82%) had women on their boards.

Hong Kong saw more of a spike in female directors, rising from 12.6 percent in 2020 to 16.3 percent in 2022. Mainland China held steady from 2020, with nearly 12 percent of board seats filled by women. In Hong Kong, 53.2 percent of boards had at least two women and 29 percent had at least three. However, fewer boards had more than one female-held seat in mainland China—about 30 percent of boards had at least two women and slightly less than 10 percent have at least three women.

The change in Hong Kong might partially be driven by the updated corporate governance code issued by HKEX in December 2021 to end single-gender boards which established a three-year transition period to comply by Dec. 31, 2024, for existing issuers; and compliance from July 1, 2022, for IPO Applicants. Numerical targets and timelines must be set for gender diversity at the board level and disclosure must be made on gender ratios in the workforce. In addition, HKEX corporate governance code was also updated to improve independence of INEDs serving more than nine years (“Long Serving INED”): Additional disclosures are required to prove that the Long-Serving INED is still independent and could be re-elected; appoint new INEDs if all INEDs are Long Serving INEDs.

It's expected that firms with higher foreign active shareholders will promote the international standards of corporate governance, which means more board independence and diversity. Alongside of the HKEX governance code amendments, firms are likely to nominate female INEDs to fulfill both requirements at one appointment.

Both mainland China and Hong Kong saw a rise in the number of female CEOs. In 2022, 8.6 percent of CEOs were women in mainland China, compared to 4.2 percent in 2020 (the Asia average is 5.1 percent). In Hong Kong, the increase was lower, with almost 5 percent of CEO roles held by women, up from 3.3 percent in 2020.

As is true in many countries in our study, the number of female CFOs is substantially higher than CEOs. In 2022, 42 percent of CFO roles in our study were held by women in mainland China, and 24 percent of CFOs in Hong Kong were women. (The average in Asia for female CFOs is 16.8 percent.)

While both mainland China and Hong Kong made progress in diversifying the representation of their board members, that same level of diversity has not yet translated to board leadership positions. From the companies analyzed in our study, only one woman holds a non-executive chair position, and four women hold executive chair positions in mainland China. It’s a similar story in Hong Kong, where there are two female non-executive chairs and two female executive chairs.

The committee chairs are slightly more diversified. In mainland China, 10.2 percent of committee chair roles are held by women; in Hong Kong, the share is 11.8 percent. The global average in our study is a bit higher—25 percent of committee chairs are women.

Unfortunately, the lack of diversity in board leadership roles is a trend around the globe. The global average for female non-executive chairs is only 8.4 percent and 3.7 percent in executive chairs. Part of the reason for these lower numbers is that some companies have only recently made progress in changing the composition of their boards, and these newer directors need time and exposure on the board before they move into leadership roles.

However, we have also seen that there is often a gap in intentional succession planning when it comes to board leadership roles. Board chairs must ensure there are development processes and paths that are accessible to every board member. Our study features a Framework for Board Leadership Succession which can be downloaded here.

Hong Kong is a true standout when it comes to seeking boardroom talent from outside of their nations, leading the way in Asia and a top leader globally. Nearly 71 percent of all board members in Hong Kong are non-nationals, and 67 percent of female board members are non-nationals. This is likely driven by the business nature of Hong Kong headquartered businesses that mostly operate in international markets rather than just the local Hong Kong market.

The numbers are a bit lower in mainland China, with 16.4 percent of board positions held by non-nationals and 17.1 of all women-held board positions are held by non-national women.

---

While both mainland China and Hong Kong have made mostly progress in gender and international board diversity, building upon that representational diversity to building and maintaining an inclusive board culture will be key to reaping the value of more diverse perspectives.