Directors in Hong Kong think that leaders on boards are not doing enough to promote team dynamics, according to the Asia Pacific Corporate Governance Report 2014 from Heidrick & Struggles. They also suggest that clear criteria for board member replacement are needed because Hong Kong has the lowest percentage of non-executive directors (66%), the highest average number of directors per board (13.6), and the average tenure of board of director members in Hong Kong is 10.8 years, also the highest in the region. The report also suggests that boards in Hong Kong are not as prone to engaging external advisory parties to review their board effectiveness.
Drawing on data from 170 publicly listed companies on stock exchanges across six countries in Asia Pacific and surveying more than 165 board members, the report also suggests that high-performing boards focus on four key capabilities: people, leadership, vision and innovation. Several key drivers support these four core capabilities including a balance between executive and non-executive directors; regular meetings; clear criteria for director replacement; identification of opportunities to improve the board, gender and ethnic diversity; and a sufficient number of independent directors to provide a balanced view. Directors rated ‘vision’ as the most important capability in the survey.
Harry O’Neill, Managing Partner, Asia Pacific, Heidrick & Struggles commented, “In places like Hong Kong and Singapore where many listed companies are family owned, boards should regularly benchmark themselves against their peers to identify key differences that impact performance and share price. With the increasingly stringent new legal compliance rules and stock exchange guidelines, board meetings nowadays tend to focus heavily on compliance issues. However, a forward-thinking board should be able to assess the resilience of a business as well as its ability to innovate, while understanding the risks involved in innovation.”
Paul Arkwright
Publisher
