Women are trans­form­ing global busi­ness en­vi­ron­ment

China Daily (Hong Kong) - - HK COMMENT - NICK MARSH The au­thor is man­ag­ing di­rec­tor of Har­vey Nash Ex­ec­u­tive Search APAC, an ex­ec­u­tive search and lead­er­ship con­sult­ing firm.

The ground­break­ing news that the Euro­pean Par­lia­ment passed a vote last month re­quir­ing that large listed com­pa­nies en­sure women hold 40 per­cent of non-ex­ec­u­tive board seats by 2020, means the global busi­ness com­mu­nity has to pre­pare for ma­jor changes.

The vote it­self is good news for ad­vanc­ing equal­ity be­tween the sexes. The is­sue is now on the radar of the global busi­ness com­mu­nity — giv­ing it a sense of ur­gency. Euro­pean Com­mis­sion Vice-Pres­i­dent Vi­viane Red­ing called the res­o­lu­tion a “his­toric mo­ment for gen­der equal­ity in Europe”.

How­ever, the im­pli­ca­tions of the vote and what this means for the wider busi­ness com­mu­nity is not clear, as it is essen­tially de­pen­dent on how the di­rec­tive is en­forced. We will gain fur­ther clar­ity in com­ing months, but now we have to pre­pare for the po­ten­tial im­pact.

One ma­jor is­sue to con­sider is the dis­par­ity be­tween dif­fer­ent parts of the world on the is­sue. Asia is al­ready lag­ging be­hind in the ad­vance­ment of women, and un­less gen­der diver­sity is seen as an is­sue of the ut­most im­por­tance for the busi­ness com­mu­nity, the new di­rec­tive in Europe could ex­ac­er­bate the sit­u­a­tion.

It is in­ter­est­ing to note that in Europe 16 per­cent of the mem­bers of its boards, on av­er­age, are women com­pared with 9 per­cent in Asia. Hong Kong now has more women in the work­force than men, but cur­rently only 9.4 per­cent of fe­male di­rec­tors sit on boards, and 38 per­cent of Hang Seng In­dex-listed com­pa­nies have no women on their boards (Women on Boards, Hang Seng In­dex 2013 re­port).

As a re­sult of the new di­rec­tive, fe­male tal­ent in Europe will be in de­mand. Women ready to take on the chal­lenges of boards are al­ready in short sup­ply or hid­den. Busi­nesses will need to be more open about women tak­ing on their first board ap­point­ments.

This sit­u­a­tion presents its own set of hur­dles, in en­sur­ing board mem­bers are ad­e­quately pre­pared for the roles and re­spon­si­bil­i­ties they face. Cour­ses to teach women about boards, such as the Women’s Di­rec­tor­ship Pro­gram run by the Univer­sity of Hong Kong, serve to en­sure women lead­ers are ready to rise to chal­lenges of the board­room.

The key to en­sur­ing th­ese am­bi­tions can be achieved is to ad­dress one of the main bar­ri­ers women im­pose upon them­selves — which some­times holds them back — a lack of con­fi­dence. Some men, there­fore, block women by pre­fer­ring to hire in their own im­age.

Fe­male lead­ers in Hong Kong and the wider Asia-Pa­cific re­gion may be called upon to take up board po­si­tions in Europe, re­sult­ing in a sig­nif­i­cant tal­ent drain. Multi­na­tional com­pa­nies are al­ready look­ing for ta­lented women in the re­gion, so this di­rec­tive may fur­ther stretch our al­ready lim­ited re­sources.

The re­cently pub­lished Women on Boards Re­port high­lights 92 per­cent of those ques­tioned iden­ti­fied bar­ri­ers to mak­ing boards more di­verse, with 33 per­cent stat­ing the in­abil­ity to iden­tify di­verse board can­di­dates. Hav­ing de­vel­oped In­spire, our global net­work for se­nior busi­ness­women over the last five years, we know the tal­ent is out there and old ar­gu­ments do not stack up. There are many board-ready women and ta­lented fe­male ex­ec­u­tives with the right skills, ready to help a busi­ness re­flect and iden­tify with their cus­tomer base and the com­mu­nity they serve. Fun­da­men­tally, cre­at­ing more bal­anced teams leads to bet­ter, more ro­bust de­ci­sions, im­proved per­for­mance and re­duced risk. When you look at this as a busi­ness is­sue rather than a gen­der is­sue why would you ne­glect or fail to en­gage with 50 per­cent of the work­force, clients and other stake­hold­ers?

In Hong Kong, we are start­ing to see changes, such as the in­tro­duc­tion of the 30% Club. Busi­nesses such as Stan­dard Char­tered Bank, GE, Sch­nei­der Elec­tric and KPMG have al­ready signed up for the vol­un­tary ini­tia­tive. How­ever, the prin­ci­ple of quo­tas is gain­ing pace and is now likely to be­come law in many parts of Europe, re­plac­ing the cur­rent vol­un­tary ini­tia­tives, which in re­al­ity failed to de­liver. As we don’t wish to be left be­hind, real ac­tion needs to be taken to avoid re­duc­ing our tal­ent pool and los­ing half of it to more en­light­ened mar­kets.

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