Asian firms continue to lag in gender diversity even as investors push for change

Stakeholders are placing increasing importance on gender equality on corporate boards, but institutionalised problems continue to limit career advancement for women in Asia Pacific, experts say.
Asian firms continue to lag in gender diversity even as investors push for change

Emerging data has convinced stakeholders that gender diversity in senior management has a positive impact on financial performance, but institutionalised problems, such as limited career advancement options and entrenched attitudes, continue to hamper female representation in top positions in Asia Pacific, experts told AsianInvestor.

Only 39.6% of women believe that the promotion and advancement of women into senior roles are priorities in their organisation in practice, while 57% of men believe so, highlighting a gap between “saying” and “doing”, according to a survey released in October by the Financial Services Institute of Australasia (Finsia).

The survey also highlights the underrepresentation of women at senior levels: even though more women are employed in Australia’s financial services sectors (54.3% vs 45.7%), women make up only 10% of chief executive positions and 27% of directors in the industry, according to the country’s Workplace Gender Equality Agency (WGEA).

In addition, women feel that they lose out on promotion opportunities when they leave the workforce temporarily to care for children or the elderly, with 81% of female respondents saying so, compared to only half of male respondents.

"The real challenge remains to be able to ensure career progression to senior management positions,” Mathilde Dufour, head of sustainability research at Mirova, an affiliate of Natixis Investment Managers.

But the solution to the problem remains a chicken-and-egg situation. “Improving the representation of women in senior management can truly change the culture of the company and encourage greater diversity within the company,” Dufour said.

READ ALSO: How asset owners can push for gender parity in listed companies


Still, listed firms in Australia have more female representation than other geographies in Asia.

In September, none of the top 200 companies on the Australian Securities Exchange (ASX) had all-male boards for the first time.

The share of women in corporate boards for constituents of the ASX200 stood at 34% as of September, up from 32.4% in 2020 and 30% in 2019, according to the Australian Institute of Company Directors.

In comparison, most territories in Asia had fewer than 20% of total director seats held by women. For instance, the percentage was 10.7% in Japan last year, and 4.9% in South Korea, according to the MSCI Women on Boards 2020 Progress Report released in November last year.

Singapore and Malaysia fared better at 19.5% and 28.1% respectively, while Hong Kong had 12.7% female representation on boards.

However, Hong Kong was the only territory that saw a rise in all-male boards last year. The number rose from 32% to 37% between 2019 and 2020.

“For a number of markets actually it's quite challenging because if you're below 5% [South Korea] or 10% [Japan] it means many companies don't have any women on the board,” Paul Milon, head of stewardship, Asia Pacific for BNP Paribas Asset Management told AsianInvestor, referencing a BNP analysis based on the ISS proxy voting universe.

“Some companies [in Asia] may only have one woman on the boards – and that’s relatively in line with or better than the market," he said.

BNP Paribas Asset Management’s 2020 voting policy in Europe, North America, Australia and New Zealand stipulates a minimum threshold of 30% of women on the board. In Asia, it has set the bar at 15% but also considers entities whose board comprises at least 10% women members, provided they commit to reaching 15% within two years.


Institutional investors have started to see results from their engagement with investee companies to level out gender representation.

US-based asset manager Nuveen, for instance, has put in place a three-year escalation strategy that incorporates support for shareholder proposals and voting against boards of directors to spur those that are failing to meet those standards and incentivise others to improve further, Amy O’Brien, Nuveen’s global head of responsible investing, told AsianInvestor.

As a result of these gender diversity initiatives, almost 50% of Japanese companies in Nuveen’s target universe added one woman, O’Brien said.

State Street also launched its ‘Fearless Girl’ gender diversity campaign in 2017. It has started taking voting action against key directors at companies with no women on the board, according to Benjamin Colton, the New York-based global co-head of asset stewardship for State Street Global Advisors.

State Street HK, Singapore female directors' data since launch of Fearless Girl campaign

“As more and more research projects have highlighted the positive correlation between diversity within a company and its operational and financial performance, diversity is increasingly looked at by the investment community and there is an increasing number of thematic funds investing in diversity,” said Mirova’s Dufour, who is based in Paris, said.

Companies with over 30% women executives were more likely to outperform than those where the proportion of women is lower, McKinsey found in a wide-ranging study on diversity published May 2020.


However, BNP’s Milon warned that having women on boards is not enough, and that efforts must be made to include women at all levels in a company.

"[Having sufficient female board members available] can, to a certain extent, be an excuse that is used by companies, but it is not something that prevents companies from making progress,” he said.

He adds that encouraging investee companies is a process that can require patience, and that driving change takes a nuanced approach.

"It is a change that may not happen overnight. That is why we are quite happy when these companies tell us ‘We are not able to meet the requirement today but we commit to be there within two years.’ To us that is a good commitment as well because it means that they have a structured way of thinking about it and therefore they don't want to appoint a woman just to be in line with expectations but because it is part of a broader plan to expand diversity,” he said.

Dufour pointed out that her firm tracks diversity at the executive committee-level as opposed to boards because the “board of directors has only a supervisory role and its impact on the change of culture in the company is limited”.

The firm believes that the representation of women in C-level positions is a key factor in favour of greater diversity in organisations and is more tangible proof of a company's commitment to gender equality, she said.

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