Board diversity at the top 50 in China

by Stephanie Lin, ACGA

16 May 2023

State firms drag down the average gender diversity score among China’s top 50 issuers, writes Stephanie Lin, ACGA Research Manager for China and Korea

While women may hold up half the sky, men clearly still rule the boards of SOEs in China.

Our latest research on the top 50 companies listed in China (a full report on the top 100 will follow soon) shows a significant lag between the number of women sitting on the boards of state-controlled or state-owned enterprises (SOEs) and their privately-owned peers. Among the top 50 issuers by market capitalization, the average number of women on SOE or state-controlled boards is just 13%, compared to 18% at privately-owned enterprises.

Male-only boards in the top 50 are at their highest among state firms: we found six companies with no women on their boards, and five of them are SOEs. The six are BYD Company, China Shenhua Energy, Hangzhou HikVi, China State Construction Engineering, Beijing-Shanghai High-Speed Railway, and Jiangsu Yanghe Brewery. Only BYD Company is privately-owned and of the six male-only boards, we found China State Construction Engineering to never have had a female director.

Our research involved looking at the most up to date board data at the top 50 A-share companies by market cap listed on the Shanghai and Shenzhen stock exchanges. The findings do not widely diverge from what we found among the top 100 in Hong Kong last year: in all, only 14% of overall board positions in China are held by women at the top 50 companies, compared to 15% for the leading 50 listed in Hong Kong.

Indeed, it appears that having a dual listing in China and on the Hong Kong Stock Exchange does little to boost the average percentage of female directors. Of the 50 companies surveyed, 21 are dually listed (China/Hong Kong) and the figure for female board members at these companies is 15%.

We did find a small bright spot: as we discovered in our previous research on Hong Kong, companies with a female nomination committee chair or board chair tend to have a higher percentage of female directors. Among the 50 companies surveyed in the PRC, there were only two with a female nomination committee chair, CATL and China Pacific Insurance. Still, both companies perform better than average, with 22% and 21% female directors, respectively. We hope that our research on the next 50 companies further bolsters this finding. In Hong Kong, we found that if women chaired the nomination committee, there was a higher rate of female representation on boards: this figure was 25% compared to the overall 16% average at the top 100.

In China, two privately-owned enterprises fared significantly better than average with female board representation running higher than 30%: East Money Info, a financial and stock information website provider and Yihai Kerry, an edible oil product manufacturer. Both are listed on the Shenzhen Stock Exchange and stand out with the highest percentage of women on their boards at 33%. Neither appear to have a board diversity policy on their websites, or in annual reports or ESG reports. Yihai Kerry, a unit of Wilmar International that is owned by Singaporean conglomerate the Kuok Group, does not appear to have a nomination committee at all.

Out of the top 50 companies, only Gree Electric, one of China's largest privately-owned home appliance manufacturers, has a female board chair. While its chair Dong Mingzhu is regarded as one of China's most successful and influential female entrepreneurs, she appears to be the only woman in the company's senior management.

In terms of potential female board candidates in the pipeline, only 12.56% of senior management positions among the top 50 companies are held by women, indicating a significant diversity gap in leadership positions. Furthermore, 30 of the 50 companies do not have a clear board diversity policy, suggesting a lack of commitment to the issue.

About the Author(s)

Stephanie Lin
Research Manager, China & Korea, ACGA

Stephanie Lin
 joined ACGA in October 2021 as Research Manager to support ACGA’s ongoing research into corporate governance and ESG development in 12 markets across Asia-Pacific. Previously, Stephanie was a business consultant for five years, advising multinational investment and corporate clients on regulatory, legal and reputational risks.

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