Korn Ferry: The Diversity Scorecard 2016: Building Diversity in Asia Pacific Boardrooms

The study, Building Diversity in Asia Pacific Boardrooms, is the fourth in the Korn Ferry Diversity Scorecard series and examined the largest 100 publicly listed companies’ 2014 annual reports in ten Asia Pacific economies: Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Singapore and South Korea. Based on the findings, firms with at least 10 per cent of female board members delivered a 14.9 per cent return on equity (ROE) in 2014 compared to just 12.6 per cent for those without.

According to this year’s findings by Korn Ferry, three countries in the Asia Pacific region, namely Australia, India and Malaysia, showed significant improvement in broadening women representation on boards across the companies. A combination of government initiatives has contributed to the increase in these countries.

Across the world, board diversity is becoming an intensely discussed issue both in private and public sector boardrooms. In the private sector and through the course of their work at Korn Ferry, the data shows a more gender-balanced board structure adds value and effects positive change on the bottom-line. Their recent study reveals companies with at least 10% female board representation averaged a 6.4% ROA (return on assets) and a 14.3% ROE (return on equity) over a three-year period. In comparison, companies with less than 10% female board representation averaged only a 5.2% ROA and an 11.8% ROE during the same period.

While it is encouraging to note that all-male boards are no longer a majority in the region with a significant drop from 53.2 per cent in 2012 to 39.0 per cent in 2014, Asia Pacific still falls far behind benchmark global economies such as the United States, the United Kingdom and the European Union. For the region to reach parity with these markets, it would require another decade of growth at the current pace.

To read the full report, click here.