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June 27, 2022

Asia Inc behind on gender equality disclosure

Progress in gender equality reporting in Asia’s most sophisticated markets lags drastically behind Europe.

By Adrian Murdoch

gender equality, gender pay, Asia
Unequal: There’s a distinct lack of reporting on gender equality by Asia’s top listed companies (Photo by the kemalbas via istock)
  • Nine in ten listed companies in Asia’s most developed markets do not disclose gender pay gap figures, fresh research reveals.
  • Women make up just 4% of chief executives, 5% of board chairs and 19% of senior management across 1,181 listed companies surveyed.
  • McKinsey Global Institute estimates that advancing women’s equality could boost the region’s GDP by 12% – or add $4.5trn to its annual GDP – by 2025.

Gender equality is still not being taken seriously in Asia’s top developed markets. More than nine out of ten companies in the region (91%) do not disclose gender pay gap figures at all.

Although on a par with the US (92%), it is significantly below the global average of 83% and dramatically below Europe, where the percentage of companies that do not disclose gender pay falls to 61%.

These are the findings of the ‘Gender Equality in Asia-Pacific’ report published in mid-June by Japanese think tank the Sasakawa Peace Foundation and Amsterdam-based gender equality data provider Equileap.

A lack of reporting implies a lack of business prioritisation. In its 2018 paper on this subject, McKinsey Global Institute estimated that advancing women’s equality could boost the region’s GDP by 12% – or add $4.5trn to its annual GDP – by 2025.

The Sasakawa Peace Foundation report surveyed 1,181 publicly listed companies in Australia, Hong Kong, Japan, New Zealand and Singapore, arguably the most developed economies in the region. Each company covered had a market capitalisation of at least $2bn throughout 2021.

But there are huge differences across markets. While 23% and 22% of Australian and New Zealand companies, respectively, do publish gender pay data, that falls to 6% in Hong Kong and 4% in Japan.

The report points the finger at a lack of mandatory reporting on the issue, though in late May, Japanese prime minister Fumio Kishida did pledge that gender equality reporting would become mandatory for all companies with more than 300 employees.

Certainly, this is what changed the approach to the issue in the UK. The requirement for British companies to report on their gender pay gaps means that the overall median gap has shifted 22 percentage points since 1998 and accelerated since April 2017 when mandatory reporting was introduced.

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And companies in Europe such as building firm NGE and transport company Keolis (both French), and also in the Middle East (for instance, Dubai-based property group Majid Al Futtaim), have incorporated gender equality targets in sustainability-linked financing they have recently arranged.

Yet only three companies in Asia Pacific have closed the gender pay gap: Australian oil and gas producer and exporter Oil Search; Anglo-Australian metals and mining group Rio Tinto; and Hong Kong-listed gas distributor China Gas.

Below global gender averages

The lack of gender equality is most overt in the top of companies in Asia, where women make up just 4% of chief executives and 5% of board chairs.

And the figures do not improve a great deal when organisations are looked at as a whole: women make up 17% of boards, 13% of executives, 19% of senior management and 35% of the workforce.

“Across the region, women’s representation at all company levels falls short of gender balance and below global averages,” the report says.

Only two firms – New Zealand’s accounting software group Xero and Hang Seng Bank in Hong Kong – achieved balance at all four company levels.

Looked at on a country basis, three companies in Australia have both a female chief executive and chair: AMP and fellow financial group Bendigo and Adelaide Bank, and rare earths mining company Lynas Rare Earths.

Indeed, the report points out that there are almost as many chief executives named Mark (12) or Andrew (12) as there are women heading Australian companies.

In Hong Kong, only 5% of listed companies (12) had a female chief executive and just 6% (14) had a female chair on the board of directors.

There was better news at the chief financial officer level, which saw women in that role in 19% of companies (45), almost double the Asia-Pacific average of 10%.

The worst figures came from Japan. Fewer than 1% of Japanese companies (5) had gender-balanced boards (i.e. 40-60% women) and only 1% of companies (8) had a female chief financial officer or a female chair on the board of directors (9).

In fact, only four listed companies have female chief executives: Industrial & Infrastructure Fund, Trend Micro, Optorun, and Fuji Seal International.

An outlier is Singapore, which stands out for the highest representation of women at all levels, both regionally and globally. At the top level, 14% of companies (8) have a female chief executive and 26% have female chief financial officers, compared to 5% and 13% globally.

This continues down through the organisations in Singapore. Women in the country are better represented at the executive, senior management and overall workforce levels, at 28%, 32% and 44%, respectively. This compares to 18%, 25% and 37% globally.

Sector discrimination

Sectoral data needs to be treated cautiously as figures are skewed because some sectors are dominated by a single country.

Take the automotive sector, which has a particularly low female representation. Numbers in the C-suite are low, with 12% on boards, 5% on executive teams and 6% at the senior management level. Across the sector, women make up only 19% of the workforce.

But as the report points out, nearly three-quarters (73%) of automobile companies in Asia-Pacific are Japanese, while around a fifth are in Hong Kong (21%).

There are no Singapore or New Zealand companies in the automobile sector that are covered by this research at all.

It is a similar, if reversed, story for the sectoral bright spot, which is energy, described in the report as “the best-performing sector” in the Asia-Pacific region in terms of female employment.

Here, figures are slanted because half of the energy companies in the region (12) are Australian and, more to the point, the expectations are that figures will improve as energy becomes more sustainable.

The fact that women represent a greater proportion of the workforce in the renewables sector compared to oil and gas is indicative of the potential for change, the report suggests.

Finance: an industry on its own

The report highlights the top performers in the region, with five Australian financial firms – Medibank, IAG, National Australia Bank, Westpac and Commonwealth Bank – all scoring gender equality scores of over 60%.

Regionally, however, the industry has many obstacles that prevent women from progressing. The average score for companies in this sector in the Asia-Pacific region is 36% – slightly less than the global financial sector average of 38%.

Capital Monitor has reported that across the financial sector in the UK, the median hourly pay for women was 24% lower than for men. It is difficult to come to such figures across Asia-Pacific as only 11% of financial companies (13) in the region publish gender-disaggregated pay information.

The benefits of organisations closing the gender gap appear clear. “The degree to which companies promote gender equality is one of the indicators used by investors to identify the values of a company,” says Itsu Adachi, executive director at the Sasakawa Peace Foundation.

Some pension funds, such as Sweden's AP2, Australia's Hesta and California State Teachers' Retirement System, agree and are making efforts to drive change in the industry, as they have within their own organisations.

But as Polly Bindman has written in Capital Monitor, even though the appetite for gender lens investing is increasing, the performance is mixed. “Regardless of how you cut it… gender lens funds appear to be neither strongly under or outperforming their peers,” she said.

Until the benefits to companies' figures are clearer and it hits them on the bottom line, expect the status quo to remain.

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