Asia is playing catch-up in the race towards greater gender diversity on company boards and in the workplace, though notable progress has been made, with a report out of Hong Kong showing the good and the bad.
Despite growing research on the benefits of gender diverse boards — including improved company performance, sensitivity to consumer trends, and stronger governance — Asian companies lag international counterparts in placing women in executive positions, according to the latest Women on Boards Hong Kong Report released on Wednesday.
The report coincides with International Women's Day and also offers a bit of hope.
For the first time since the study was launched in 2009, one-fifth of Hong Kong boards achieved 20 percent or higher female participation. There was also a decline in all-male boards.
The representation of women on the boards of Hong Kong's leading companies increased marginally to 12.4 percent in 2017, after stagnating at 11.1 percent for the past two years, according to the report, which analysed Hong Kong's top companies listed on the Hang Seng Index (HSI). The report looked at data between Jan. 3, 2016 to Jan. 2, 2017.
The study was released by Community Business, a Hong Kong-based not-for-profit organization promoting responsible and inclusive business standards in Asia, and launched in partnership with global executive search firm Heidrick & Struggles.
"Two ongoing issues are whether capable female leaders are being promoted to board positions, and whether there is a big enough pool of senior female leaders who are truly board-ready," said Steve Mullinjer, regional leader for Asia Pacific at Heidrick & Struggles.
He recognized that boards with a "good mix of nationalities, age groups, gender and cultural backgrounds, as well as skills and experience, can lead to better decision making and improve a company's bottom line. "
These changes were driven primarily by a few companies. Only four out of 14 HSI companies- CK Hutchinson Holdings, China Life Insurance Company, China Merchants Port Holdings Company, The Bank of East Asia- experienced an increase in the percentage of women on boards last year had actively increased the number of female directors.
A few companies stood out as being highly committed to increasing gender diversity. CLP Holdings, HSBC Holdings, Link Real Estate Investment Trust (REIT) and MTR Corporation all saw a net increase in the number and percentage of female directors on these company boards over the last five years. In addition, these companies had internal initiatives in place to support the development of female executives.
In Hong Kong, the banking sector led the way when it came to appointing female CEOs, with HSBC and Standard Chartered appointing women at the helm.
Hong Kong's progress pales in comparison against its global counterparts such as the United Kingdom, where female representation on FTSE 100 boards has tripled since 2009 to 26.8 percent, and is now voluntarily targeting 33 percent by 2020.
Within Asia, Malaysia has superseded Hong Kong in its increase in representation of female directors, from 9.7 percent to 14.6 percent in just four years. It could be simply that Asian companies are seeing less of the benefits of a gender diverse board, the study noted. But such a mindset may backfire and send top-notch Asian female executives to seek further opportunities abroad at multinational corporations that value their diverse skill-set.
The 30 percent Club Hong Kong launched a campaign last year to increase the percentage of women directors on HSI company boards to 20 percent by 2020, working toward a long-term goal of 30 percent. But Hong Kong executives think the push towards diverse boards goes beyond mandated quotas, and gender.
"I am not a fan of quotas. Regardless of gender, you should be considered for a board position because of the skills, relationships, experience and insights that you bring to the table." said Poh Lee Tan, independent non-executive director at Link Real Estate Investment Trust, in the report.
This limited progress is also echoed in Singapore, where remuneration of females in Singapore Exchange-listed (SGX) boards trail behind their male counterparts.
A recent study by the National University of Singapore's Business School's Centre for Governance, Institutions and Organisations has found that significant disparities in salary between both genders were present across all categories of directors and all firm sizes.
The study, which made use of director remuneration disclosures required under SGX's new corporate governance code, found that on average, female directors of SGX-listed companies earned 56.8 percent of their male counterparts. The largest discrepancies in salary were found among firms with a market capitalization over $1 billion, at 45.5 percent, and among executive directors, at 43.9 percent.
There is growing international consensus that a gender diverse board correlates with better company performance. In a 2015 study by MSCI on women representation on companies in the MSCI World Index, it was found that companies with strong female leadership generated a Return on Equity of 10.1 percent per year vs. 7.4 percent for those without.
Despite this, progress remains slow.
"The rate of new appointments to women has really failed to accelerate," Fern Ngai, CEO of Community Business told CNBC's "Squawk Box."
"Board diversity may still struggle to make it onto the agenda for much of the business community in Hong Kong." She urged Hong Kong companies actively develop a sustainable strategy to advance female talent to senior executive and board roles.