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Sep 11, 2023

Having a woman in charge of nominations drives female board representation in China

Just 14 percent of China’s top 100 firms has a woman on the board

Having a woman leading the nomination committee doubles the number of female directors, according to new research.

But private Chinese firms – many in ‘high-growth and strategic’ sectors such as semiconductors, silicon wafers and lithium ion batteries – boast better female representation than their publicly listed peers, reveals new data from the Asian Corporate Governance Association (ACGA).

It finds that just 14 percent of the top 100 companies by market cap in China has a wmoan on the board, a figure that rises to 20 percent among private companies. A fifth of the top 100 firms have no women at all on the board.

Put a woman in charge

ACGA says there is a simple solution to boosting female board representation, however: putting board nominations into the hands of a woman.

Public companies with a female nomination committee chair have twice as many female directors, according to ACGA’s report: Board diversity at the top 100 in China. It finds that these companies also have a much higher rate of female independent directors – more than three times the average, in fact.

‘Although we rely on a small sampling of a dozen companies with female nomination committee chairs in China, we also had a similar finding at the top 100 in Hong Kong last year,’ says AGCA in a statement accompanying the study. In Hong Kong, it finds that ‘while the average rate of female representation is 16 percent, it rises to 25 percent if a woman chairs the committee.’

Private firms lead the way

Interestingly, ACGA finds that China’s privately owned companies have far better female board representation than their public peers.

Though many of these companies are tech-related, the highest number of female directors is 45 percent, says ACGA – at an Inner Mongolia dairy firm. The research also finds nine privately owned enterprises where at least 30 percent of the board is female.

Twenty issuers – including three that are dual-listed in Hong Kong – have single-gender boards, it adds, while it finds just three female board chairs and five CEOs who are not men.

Dual-listed firms

Looking at Chinese companies with dual listings, ACGA finds they are more likely to have women on the board. ‘With a high number of dual-listed firms in the top 100, we looked at whether overseas governance standards have a major influence on these companies,’ explain the researchers.

More than one in five issuers in the top 100 are dual listings, with Shanghai or Shenzhen as their primary market and Hong Kong their secondary one, says ACGA, describing most as ‘heavyweights in the H share market, ranking among the 20 largest Chinese issuers in terms of market capitalization’.

Noting that it has been more than three decades since the first H share listed in Hong Kong, researchers asked companies whether foreign ownership and different regulatory requirements influence the diversity demographic of their boardroom.

‘The result is mixed. On the one hand, dual listings are less likely to have single-gender boards,’ says ACGA. ‘There are two – Bank of China and auto manufacturer BYD – with no female directors. The clock is ticking on these H shares as Hong Kong Exchanges and Clearing has mandated that all issuers have at least one woman on their board by January 2025.’

In fact, dual listings fare ‘marginally worse’ than their domestic top 100 peers when it comes to the ratio of women on their board, at 12 percent.

‘Where dual listings significantly differ from the rest of the top 100 is in appointing women to the C-suite,’ say researchers. ‘Overall, 38 issuers in the top 100 have done so, yet among this figure only four of the companies are dual listings. Ping An has co-CEO Jessica Tan Sin Yin, while China Life, pharmaceuticals firm Wuxi AppTec and BYD all have a female CFO (the latter having a male-only board).

Garnet Roach

An award-winning journalist, Garnet Roach joined IR Magazine in October 2012, working on both the editorial and research sides of the publication. Prior to entering the world of investor relations, her freelance career covered a broad range of...