Introduction

As society and business are reconciling the events of the past two years and a new licence to operate for corporations is taking shape, there is a marked need for boards to understand what changes they need to make in order to successfully lead their organizations through the near- and long-term future.

There is now a very clear expectation that companies in most markets take a stand on social and political issues; the war in Ukraine provided a clear example of this, wherein companies were expected to sacrifice their profit and operations for the greater good. Even more pronounced are the expectations and requirements that companies act in a sustainable manner.

As this pressure often comes from customers and other stakeholders, not from shareholders, it puts the onus on boards to decide what to do for their companies.

We also see many changes specific to Hong Kong—one of the biggest shifts being the dismantling of traditional monopolies, a development driven by digitalization, market dislocation, changing demographics, and the impact of the ongoing COVID-19 pandemic. Finding directors who understand all these challenges is proving particularly challenging.

So, have boards moved the dial when it comes to changing their composition to tackle these new expectations and mitigate the risk of losing their license to operate? In Hong Kong:

While there has been progress in broadening the spectrum of experience around boardroom tables in Hang Seng companies, each company needs to make sure it is not only prepared for today’s challenges, but can anticipate what type of directors will be needed to future-proof the organization. (For more on future-proof organizations, see Future-Proofing Your Board.”

For more, download the full Board Monitor Hong Kong 2022 report.

Acknowledgments

Thanks to David Hui for his contributions to this report.