Analysis on the presence of women in China’s corporate culture.
When it comes to gender equality, China is a web of contradictions. On the one hand, it’s a society in which the balance tips in favor of boys over girls—according to the Chinese Academy of Social Sciences in Beijing, 119 boys are born for every 100 girls, and in many parts of the country, female infanticide and gender-specific abortions are still common. On the other, the outlook looks decidedly for female white-collar workers seeking to reach the senior ranks of their companies, as Chinese women report more opportunities to climb up the corporate ladder than in many other countries.
Does this make corporate China the exception rather than the rule? At first blush, it appears so. A report published earlier this year by executive search firm Korn/Ferry International revealed China is more favorable than other countries for women in business generally, and in boardrooms in particular. Titled “Mind the Gap: Half of Asia’s Boards Have No Women, a Risky Position for Governance and Growth,” it analyzed independent female directors sitting on the boards of the 100 largest companies in each of the seven Asia Pacific regions, and found a concerning gender imbalance in many Asian boardrooms.
But at 8.1%, mainland China is behind only Hong Kong (8.6%) and Australia (11.2%) in Asia in terms of the number of female company directors at its largest companies. “This number is very good for China,” states Mak Yuen Teen, a professor at the National University of Singapore Business School, who provided the research for the Korn/Ferry report. As for why the country is doing better than, say, India—at 4.7%—he says, “China is more socialist and has opened more opportunities for everyone, and that means there is less of a glass ceiling in China than [in] developed countries,” he says.
Despite the admirable stride forward, however, research from Korn/Ferry and others show why businesswomen in China should temper their optimism with a large dose of caution. The World Economic Forum’s Global Gender Gap Report, which analyzes a full range of women’s social and economic rights and opportunities in 134 countries, ranked China 61 in 2010, little progress since the research was first published in 2006.
What’s more, Korn/Ferry’s analysis noted that more than 70% of boards in China as well as Hong Kong, India, Malaysia, New Zealand and Singapore have no female independent directors. Boards with three or more female directors are rare. In the US, 16% of companies have at least one female director on their boards, compared with nearly half that in most Asian countries.
“Even Asian companies that do appoint female directors often fail to give them leadership positions… China came out best, but even there, just 7% of the companies had a female chief executive,” Alicia Li writes. Li is Korn/Ferry’s managing director of Asia-Pacific strategic client services in Singapore and the author of the report. As such research suggests, Chinese women many be a formidable presence in the workplace but they’re few and far between in key leadership roles.
That leaves companies with a big risk on their hands. “The composition of a board should reflect that company’s market—and its customer base,” Li writes. “Companies that rely solely on men to make strategic decisions on products, innovation and growth are shortchanging themselves on new ideas and different views on how to address their market.”
In the Spotlight
Still, seven of the world’s 14 wealthiest women on Forbes magazine’s annual rich list from are from China. Some are rags-to-riches and self-made successes while others are heiresses to family empires, but all show grit and determination. That includes Zhang Xin, the 46-year-old CEO of Soho China, property developer with US$2.8 billion of revenue, which she co-founded with her husband in Beijing in 1995. Forbes ranked Zhang 16th on its list of 400 wealthiest Chinese men and women, describing her and her husband as a “power couple in the real estate industry.” Also on the list are Chu Lam Yiu, CEO of flavoring and fragrance producer Huabao International at 33, and Cheung Yan, CEO of Nine Dragons Paper at 172.
That ranking only tells part of the story. Many other women have reached top posts at a range of companies, from foreign multinationals corporation (MNCs), like Amy Wang at Johnson & Johnson China, to startups launched on their own, such as Haiyan Gong, the founder of Jiayuan.com, China’s version of dating web site Match.com.
For many of China’s businesswomen, the country is a hotbed of opportunity. “China is not a bad place for women executives,” Yue-Sai Kan said. A Chinese-American entrepreneur, Kan owns the Miss Universe-China franchise and founded cosmetics Yue-Sai Kan Cosmetics in Shanghai in 1992, which was then sold to French multinational L’Oreal 12 years later. “Women in China are, by and large, powerful.”
A number of other countries have addressed imbalances by updating corporate governance codes or implementing quotas. France, Finland, Sweden, the Netherlands and Denmark recently introduced measures helping to increase the number of women on boards. In the meantime, a debate is currently raging in Germany about how and whether quotas are indeed the best way to increase corporate diversity, while a number of the country’s top companies pledged earlier this month to voluntarily promote more women into senior leadership posts — reaching up to 35 percent by 2020.
Leading the way in Asia is Australia, with only 29% of companies in Korn/Ferry’s survey having all-male boards and 26% with two female directors. New corporate governance guidelines in the country requiring boards to report gender diversity came into effect at the beginning of this year, which Korn/Ferry and other experts say has helped spur a sharp rise in the number of women appointed to boards. Women comprised 25% of new appointments to boards of companies listed on the county’s ASX 200 in 2010, compared with 5% reported in Korn/Ferry’s 2009 board diversity study.
Up and Coming
As for China, such guidelines don’t exist, but a number of big-picture trends are working in favor of China’s up-and-coming female executives, including access to higher education. China’s Ministry of Education, for example, says female students now make up more than 50% of undergraduates nationwide. At the graduate level, female students represent more than 47% of the total.
Patrick Moreton, associate dean and managing director of Washington University in St. Louis and Fudan University’s executive MBA program, reports that more than 40% of the students this year in its Shanghai program are female, which is double the worldwide average of 20%.
It also helps that the labor market is extremely competitive. With an economy that’s been booming for several years now, companies in countless sectors in China are scrambling to attract and retain the best people, male or female. “In China, the demand for talent is so high and there is such a shortage, that there are a lot of opportunities for everyone in management,” Moreton says.
Women in China apparently expect nothing less now. “I don’t see any difference between women and men,” says Mabel Ng, an MNC executive in Shanghai who has worked at several multinational companies in China over the past 20 years. “In fact, I think in succession planning, many women get more attention than their male counterparts. The job market here in China is so hot that many companies just cannot afford not to give women the opportunity to develop. Otherwise, the women would just leave.”
Another factor is the country’s one-child policy, which was launched some 30 years ago. For one thing, because the state’s progress has been so slow in developing a social welfare safety net, “families that only have one daughter are much more concerned about her financial success and put pressure on the daughter” to choose a career offering the greatest opportunities for raises and promotions, Moreton says.
And when those daughters decide to have children of their own, the work-life balance is encouraging. “The one-child policy has created a good environment for women,” he notes. “Often, there are four caretakers [that is, the two sets of grandparents] for one child. The woman is not outsourcing child-care outside the family and doesn’t have to make the trade-off [women in other countries have to in order to achieve a] work-life balance.”
A New Generation
According to Nandani Lynton, professor of management at China Europe International Business School in Shanghai, “Women in China have reached parity [with their male peers], but a combination of factors means that women with children can take on an incredible amount of work [such as] a communist government policy that has sent women to work—whereas in other places women have fought for the right to work, and the child-care infrastructure of grandparents—early daycare and even kindergarten boarding school.”
That’s good news for MNCs, Lynton adds, “Often, state-owned enterprises and civil service sectors make offers to young men first, so the qualified women tend to go into MNCs for work,” she says.
And the MNCs certainly don’t mind. According to one HR manager at an MNC in Guangzhou, “women are very privileged in the executive space in China. If there are two equal candidates for promotion, one male and one female, the female will get the promotion, because it will improve the [diversity monitoring] data for the company.”
Moreton also sees a distinction between the different types of enterprises. “Whereas women in China are performing extremely well in MNCs, I would guess that the state-owned sectors are more traditional and there are more barriers for women.”
What’s more, “in the state-owned sector, guanxi [relationships] is more important than outstanding performance. In the private sector, your performance is the most important,” says Zhang Huang, a 64-year-old executive at a private real-estate company, who had previously worked for more than 30 years as a general manager of state-owned department stores. Early in her career, she recalls feeling that there was the general perception that women were not as good as men.
Quality of Life
Times are changing, in perhaps more nuanced ways than previously. “Culturally, for the generation that came after 1949, women have been expected to work and make a contribution,” Majorie Woo says. Woo is the CEO of Keystone Group, a small executive coaching firm in Shanghai. “Now, women are looking at different choices. They have risen up the ranks quickly and are focusing on quality of life.”
Danielle Ruan, who returned to her native China about 10 years ago after emigrating to Canada and is now the Shanghai-based director of Asia at Coco-Mat, a Greece-based natural sleeping products retailer, notes how there are instances when gender is an issue in business. “If there are a bunch of guys smoking and drinking in a room, I let my male business partner do the negotiations,” she says. “It is hard for me as a woman to build a rapport with the clients in that kind of situation.” And despite child-care opportunities, she says not having a family has given her an extra career boost. “My bosses know that they can rely on me totally because I don’t have the burden of looking after a family.”
All told, businesswomen in China, as well as in other parts of Asia, are already positioning themselves proactively to take on greater leadership roles. Keystone’s Woo says many MNCs actively recruit women because they have done better than their male counterparts at university, have a higher level of English proficiency and adjust more easily to international working environments.
According to Korn/Ferry, the existing women directors are, on average, three years younger than their male counterparts and from a more diverse range of backgrounds. “While about the same percentage of male and female directors have a business education, female directors are more likely to have an accounting or law background,” Li notes in the report. And while men are more likely to have an engineering background, she says it may decrease in relevancy as Asia moves into more higher value adding, services-based economies.
Perhaps that’s why gender inequality in corporate China may be working in both directions. After all, as Cathy Hau, deputy manager of Shanghai luxury mall Times Square, puts it, “If there is a glass ceiling in China, there is one for both men and women.”
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.
*[This article was originally published by Knowledge@Wharton on October 26, 2011].