Asia's leading companies need to make bolder choices when appointing non-executive directors suggests Heidrick & Struggles' "Board Monitor Asia Pacific"
Dec 18, 2018
HONG KONG, Dec. 19, 2018 /PRNewswire/ -- Heidrick & Struggles (NASDAQ: HSII), a premier provider of executive search, leadership assessment and development, organization and team effectiveness, and culture shaping services globally, today announced the launch of its Board Monitor Asia Pacific. According to the report, the boards of many of Asia's leading companies are still reluctant to move out of their comfort zone. There is positive news in terms of the number of women being appointed to boardroom positions but, drawing on data collected from companies listed on the ASX 200, Hang Seng Index (HSI), NZX 50 and Straits Times Index (STI), the latest Board Monitor Asia Pacific suggests that there is still some way to go in achieving broader boardroom diversity.
- Boards still give priority to CEOs. 56% of the new non-executive directors (NEDs) appointed to these listed boards were current or former CEOs. New Zealand ranked highest with 67% followed by 63% in Singapore, 56% in Australia, and 46% in Hong Kong. This compares with 47% in U.S. Fortune 500 companies.
- Boards prefer listed experience. In Singapore, 88% of newly appointed NEDs had experience on at least one publicly listed board. Australia came in at 82%, New Zealand at 79%, and Hong Kong at 61%, while the figure in the United States was close to 64%.
- There has been good progress in gender diversity. Of the 263 directors appointed across all four indexes, 83 were women – an encouraging 31% of all new director appointments. In terms of the new director seats filled by women, Australia led the way at 39%, followed by New Zealand (27%), Singapore (24%) and Hong Kong (20%). This points to a promising upward trend across the region as, for each index, the percentage of new female appointments is higher than the average percentage of women already serving on boards.
- International experience continues to be a key focus area. Some 61% of New Zealand's newly appointed NEDs had international experience, followed by Australia (52%), Hong Kong (43%) and Singapore (39%). Roughly a third of the appointees were non-national - 36% in Australia, 30% in Hong Kong and New Zealand, and 29% in Singapore.
"Boards whose directors bring diversity of experience, ways of thinking and perspectives as well as gender diversity to the table are best placed for the robust discussions that support effective decision making," said Guy Farrow, Managing Partner of Heidrick & Struggles Australia. "At Heidrick & Struggles, we will continue to encourage boards to ensure that they appoint for both the right mix of competencies and long-term strategy."
In Singapore, the Diversity Action Committee (DAC) has set a target of 20% female representation on boards by 2020, rising to 25% by 2025.
"It is encouraging to see that 24% of the NED appointments went to women executives," said Alain Deniau, Partner, CEO and Board Practice for Singapore. "But I do think it's important for Singapore boards to look outside the current NED talent pool to ensure a broad range of capable and aspiring executives have an opportunity to shine."
"In Hong Kong, we are seeing that boards are receptive to executives with experience in specific functional areas," said David Hui, Partner, CEO and Board Practice for Hong Kong. "This is critical in an age where digital disruption and cybersecurity are key issues, and digital convergence is shifting business models and boards. Boards in Hong Kong are also moving away from appointing directors from their circle of friends and families to finding directors who can truly translate the company's purpose into reality, and this is another critical factor in creating more diverse board leadership for the future," he said.
About Board Monitor Asia Pacific
Produced by Heidrick & Struggles' CEO & Board Practice, Board Monitor Asia Pacific tracks and analyzes trends in non-executive director appointments to the boards of companies listed on the ASX 200, Hang Seng Index (HSI), NZX 50, and Straits Times Index (STI). Data on appointments is tracked through BoardEx, proxy filings, and corporate websites. Information about executives is gathered from publicly available sources, BoardEx, and a Heidrick & Struggles proprietary database.
About Heidrick & Struggles
Heidrick & Struggles (Nasdaq: HSII) serves the senior-level talent and leadership needs of the world's top organizations as a trusted advisor across executive search, leadership assessment and development, organization and team effectiveness, and culture shaping services. Heidrick & Struggles pioneered the profession of executive search more than 60 years ago. Today, the firm provides integrated leadership solutions to help our clients change the world, one leadership team at a time.® www.heidrick.com
Karen Lau - Marketing Director, Asia Pacific
+852 2103 9329, firstname.lastname@example.org
SOURCE Heidrick & Struggles