Management

Shelly Banjo is a Bloomberg Gadfly columnist covering industrial companies and conglomerates. She previously was a reporter at Quartz and the Wall Street Journal.

It's not entirely surprising women remain absent from company boardrooms across Asia, as detailed in a Bloomberg report this week. That doesn't make it right. 

Forget about fairness. The absence of women atop global corporate giants such as Samsung Electronics Co., Toyota Motor Corp., and Uniqlo parent Fast Retailing Co. is irresponsible, particularly at companies that explicitly cater to female customers.

At a recent lunch held to discuss Hong Kong-listed luggage maker Samsonite International SA's interim financial results, a cadre of male executives  explained how its 2016 purchase of high-end luxury products brand Tumi Holdings Inc. awakened the company to what was, to them, a new discovery: Women were working! And traveling! And buying luggage!

Turns out, women make up a meaningful portion of the business travelers, consultants and bankers that comprise Samsonite's target market. And although women control the lion's share of consumer spending, they've accounted for less than 10 percent of the group's net sales.

"Most of the people running the company are men and as a masculine brand, we were predominantly designing products and stores with men in mind," CEO Ramesh Tainwala explained.

To increase sales among women, he said the company is now taking a "women first" mentality that includes hiring more women in decision-making positions.

Although it's jarring to hear someone like Tainwala speak earnestly of revelations that women are "increasingly treated equal to men in the working world and are buying high-end luggage," at least he's already had the epiphany and is doing something about it. 

Half the World, a Fraction of Corporate Power
The percentage of women on boards and in executive ranks among companies on the MSCI Asia Index lags peers in the rest of the world
Source: Bloomberg

It's a different picture over at Fosun International Ltd., the Shanghai-based conglomerate run by Guo Guangchang, China's 19th richest man.

At a recent bi-annual presentation of results for the retail-to-real estate empire, seven men in suits took the stage to answer shareholder questions, expounding on the company's strategy to target families under the kitschy tagline, "health, wealth, and happiness." Practically, that means things like making baby strollers and running Club Med programs for kids and families across China.  

Fosun's 13-member board includes one woman, Kang Lan, who also heads HR. It's hard to be encouraged by a business strategy focused on serving women and families when there are virtually no women running the business.

Ditto for Samsung Electronics, which currently has zero female board members or top executives despite being a global technology leader. (Samsung has had a woman in the board in the past and has said it's open to broadening diversity). 

A woman in the boardroom could help business lines like mobile phones, which make up 43 percent of the company's annual revenue but tend to do better with men than women, according to multiple studies that have found women prefer Apple Inc.'s iPhones.

A seat could go to Lee Boo-jin, the eldest sister of Samsung Vice Chairman Jay Y. Lee, who in August was sentenced to five years in jail on bribery charges. Boo-jin brings a female perspective, a sought-after family presence, and a business acumen acquired while increasing revenue for eight straight years at the family's $3.3 billion hotel and duty-free business, Hotel Shilla Co. Though complications could arise from cross-shareholdings and family ownership rules.

Hidden Figures
Women are virtually invisible on corporate boards in South Korea, Japan and China
Source: ISS Corporate Solutions
Note: FTSE 100 in U.K., S&P 500 in U.S.

The percentage of female directors and executives in South Korea's male-dominated society, Samsung's home base, are among the lowest in the world: Just 2 percent of Korean companies have women on their boards. 

The facts are apparent: Shares in large-cap companies with female board members outperformed their peers by 26 percent over a six-year period ending in 2012, according to Credit Suisse AG.  Those corporations also posted higher returns on equity, net income growth, and price to book multiples, researchers found. 

Do the Math
On average, companies with one or more women on the board perform better than those with no female directors across a variety of financial metrics
Source: Credit Suisse
Note: Performance measured from 2005-2012.

Samsung could help change Korea's paltry showing by setting a good example for its home country, Asia and the rest of the world.  After all, a misguided business practice is no less terrible just because it happens to be the status quo.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. Samsonite has one female non-executive director, Ying Yeh, and last April, the company appointed Lynne Berard to president of its North America business. 

To contact the author of this story:
Shelly Banjo in Hong Kong at sbanjo@bloomberg.net

To contact the editor responsible for this story:
Matthew Brooker at mbrooker1@bloomberg.net