The widespread economic and social damage caused by the Covid-19 pandemic has both revealed and worsened gender inequality. However, the past year has also opened many minds to new ideas and opportunities like never before.
One of these is the way we look at the power of gender diversity in our workplaces, businesses and communities. To rebuild our economies faster and better in the post-Covid world, we need to embrace a more diverse and inclusive culture and environment, which will help us create a more equitable and sustainable future for the benefit of all.
Research shows that while Covid-19 may be more lethal for men, women are the ones taking the bigger socio-economic hit. Global statistics suggest that women are disproportionately affected because they are most exposed to health and economic risks.
In some countries, they make up the majority of frontline workers in health care and service industries, and they are over-represented in informal, casual employment, where benefits and protections are lacking. Women also carry more than their share of domestic responsibilities, including childcare, complicating their employment and work-from-home arrangements.
But women are also a key driver for post-Covid recovery. The dynamics of business, and the social contract companies have with their communities, have changed. Succeeding in this altered environment requires new ideas and ways of leadership, and innovative strategies. Women have long been under-represented in business leadership, now is the time to change.
UN Women executive director Phumzile Mlambo-Ngcuka is asking governments and the private sector to proactively build gender expertise into Covid-19 response teams and embed gender dimensions within recovery plans. I reiterate that call, and specifically so for corporations and exchange operators.
As we set out to rebuild a better world, the United Nations Global Compact urges businesses and governments to target gender equality as one of the most promising pathways towards a faster, more equitable and resilient recovery.
Gender inequality is a critical economic challenge. According to McKinsey Global Institute, economic parity between men and women could add as much as US$28 trillion, or 26 per cent, to annual global gross domestic product. The International Monetary Fund highlighted “groupthink” as one of the failures in the run-up to the 2008-2009 financial crisis. A robust response to a crisis requires a range of creative ideas and differing experiences and perspectives.
Many of the countries that have done the best job managing the pandemic crisis are led by women (Denmark, Finland, Germany, Iceland, New Zealand
and Norway), bringing to attention that the skills required to make effective decisions in a health crisis, including pragmatism and benevolence, are common traits found in female management.
Those same skills are badly needed in international business at the moment, where sociopolitical tensions remain high, and companies are coming to grips with their broader responsibilities to the community and sustainability.
A vast number of businesses are fighting for their survival as we begin the second year of pandemic-related disruption, and many are distracted from corporate values such as diversity. But we need to remain committed to gender equality and diversity, and use this disruption as an opportunity for change. And capital markets can facilitate a new way of thinking and doing things.
The Hong Kong Exchanges and Clearing, as a market operator, regulator and a corporate with an international platform, has a powerful opportunity to effect change. At HKEX we believe that capital markets, and their regulators, have a responsibility to help influence companies and economies in their transition towards more sustainable and inclusive practices, and ensure that investors are prepared to finance that change.
A diverse company is naturally more innovative, intuitive and resilient than a homogeneous one. Diversity improves how a company listens to customers and other stakeholders and understands their unique needs. Diverse companies are also better positioned to attract and retain talent, particularly the next generation of leaders.
Currently, only 8.2 per cent of Fortune 500 CEOs are women. Around 14 per cent of board positions of companies listed in Hong Kong are held by women. There is still much work to be done, and HKEX is committed to facilitating the change.
To further encourage and support the more than 2,500 listed companies on our markets, we at HKEX have updated our Listing Rules to enhance board diversity and corporate governance. Issuers are required to have a diversity policy, and to disclose the policy in their corporate governance reports.
While regulation may not be an effective way to inspire or lead the most ambitious companies, it does help create a basic level of competency within a market, as well as opportunities for education and engagement.
Putting more women in leadership roles requires change, which can be a challenge in any organisation. However, broad, cross-sector investments in digital infrastructure during the pandemic have shown that it is possible to change the way we work, boosting home-based work opportunities, which benefits women with children in particular.
There are many other habits and existing situations that we can tackle to support women in gaining a more powerful voice in business leadership.
To build back better, and faster, we must build back in a more gender-inclusive way, with women contributing to the strategy and leadership of our economic recovery. Disrupting gender stereotypes and embracing shared leadership and decision-making will create long-term sustainability and economic equality within our businesses and communities. Covid-19 has been a major challenge for all – let us make a positive change out of this crisis.