A new report adds its voice to calls on improving chances of women to reach the highest levels in corporate life.
Financial services and technology companies across Asia-Pacific must work harder to give women greater opportunities to ascend to boardroom level, says a study revealing wide variations in gender gap issues across the region.
While Australia and New Zealand lead the region in terms of female board representation, at 27.4 per cent and 21.7 per cent, respectively, Taiwan, Japan and South Korea fare “particularly poorly”, at 7.7 per cent, 6.9 per cent and 2.4 per cent, respectively, according to a white paper by European business school INSEAD, the Emerging Markets Institute, and sponsored by Deutsche Bank. The 43-page report is entitled Gender Equality in Asian Corporate Leadership: Distant Dream Or Achievable Ideal?
The report, released shortly ahead of International Women’s Day on 8 March, argues that while there are signs of improvement globally, the pace has been slow in sectors such as financial services.
Women are increasingly important as wealth-holders, making it more important that institutions overseeing their money reflect a gender balance at all levels in sync with such a shift. For example, UBS has found that the world's female billionaire population grew faster than the male billionaire population, rising by a factor of 6.6 compared to a factor of 5.2 for men.
Across financial services, female representation increased from 18 to 20 per cent in global corporate board level positions and from 14 per cent to 16 per cent at the executive committee level between 2013 and 2016. At this rate, the proportion of women on executive committees may not even reach 30 per cent by 2048. (Source: Oliver Wyman report, 2016.)
“It is essential to create a level playing field in order to foster a safe and inclusive working environment. Organisations need to ensure that they have policies in place and a culture where employees feel empowered to bring their whole selves to work. Making sure our employee population is diverse significantly helps in achieving this,” Alexander Prout, head of Deutsche Asset Management for Asia-Pacific, said in the report.
However, most companies accept that results have not met expectations. Improvement has been uneven and incremental, and failed to translate into substantially increased representation of women in senior leadership roles. The disparity is particularly pronounced in Asia. According to a report by the Corporate Women Directors, among the 1,557 largest listed companies across 20 Asian countries, women accounted for just 12.8 per cent of board seats in 2016. This compares with 35.6 per cent in Northern Europe, 23.6 per cent in Western Europe and 20.9 per cent in the US/Canada (source: Corporate Women Directors International, 2017.)
A major cause for concern, the report said, is that while women often outnumber men at entry-level, by the time boardroom posts are in view, women still struggle to compete: “A 2016 study of 10 multinational banks in Singapore by INSEAD and the Financial Women’s Association in 2016 provided an example of this gender pyramid. Women made up 67 per cent of their workforce in entry level roles falling to just 20 per cent at managing director level.”
The report examines issues such as conscious and unconscious bias in hiring and appointments; work-life balance and parenting issues; the role of technology in helping women, and the idea – still controversial in some cases – of quotas for females on company boards. The report noted, for example, that Malaysia’s government is targeting having 30 per cent women directors on boards in the private sector; South Korea is subsidising firms that give more than 30 days of childcare leave a year, while Singapore plans to double the share of women on boards to 20 per cent by 2020.
Businesses miss opportunities to make money by undervaluing women in the workforce, the report said. It cited a 2015 study on female representation in companies in the MSCI World Index that found that companies with strong female leadership generated a return on equity of 10.1 per cent as compared with 7.4 per cent of companies that did not do so. Another piece of evidence, the report said, came from a 2017 McKinsey & Company study that found that in Asia, companies with higher women’s representation on the executive committees outperformed others by 44 per cent on return on equity and 117 per cent on earnings before interest and taxes margins.
The report interviewed 42 senior executives in Asian companies.