Women in Boardroom: Are They Driving Growth in Taiwanese Companies?


Before reading this article, you can refer to the link below to learn more about the global trend of women in boardroom / female governance:

In this article, we focus specifically on Taiwanese companies, which fall behind global benchmarks in implementing female governance. According to regulations set by the Financial Supervisory Commission (FSC), listed and OTC companies must achieve a target of one-third of female board members by 2025. However, the progress towards this goal remains unclear; “Can female leadership truly promote diversity and enhance companies’ performance?” also remains a question. Therefore, this article provides insights into the current status of female governance in Taiwanese companies and the positive impact they bring, highlighting the significance of “Women’s Power” in the corporate landscape of Taiwan.

Female Governance Over The Past Decade

Female Governance: Seats and Proportion of female director in taiwan
Seats and Proportion of Female Director in Taiwan. Source: integrated from the TESG Sustainable Dataset

Female Director has grown 28% over a decade but has slowed in recent years.

A decade ago, women accounted for merely 11.54% in the Taiwanese boardroom. It’s attributed to the efforts of FSC and the Taiwan Stock Exchange to promote gender diversity in the boardrooms. In 2015, the proportion of female directors was included as a criterion in the “Corporate Governance Evaluation System” for listed and OTC companies, and the scoring standards have been raised annually. As a result, the number of female directors experienced rapid growth from 2013 to 2016. However, after reaching a peak in 2018, the growth rate has gradually slowed and hovered around 14%, with a proportion of 14.82% in 2021.

Nevertheless, it is still evident that women have been granted more rights in the boardroom of Taiwan companies.

Female governance: Seats and proportion of women in management in Taiwan.
Seats and Proportion of Woman in Management in Taiwan. Source: integrated from the TESG Sustainable Dataset

Women in Management has grown 67% over a decade, with the number of seats nearly doubling.

In addition, from a higher level of influence in corporate governance, the proportion of women in management has grown by 67% over the past decade, with the number increasing from 1,867 in 2010 to 3,360 in 2021. Compared to the performance of the board of directors, women in management are more active and have steadily grown over the past decade.

This also demonstrates that Taiwanese companies not only protect women’s rights in governance but also empower them with more power in business.

The above data represents the overall picture, but what about female governance across different industries? Are there differences between industries?

Female Governance across Industries

Female governance: the performance women in boardroom across industries in Taiwan.
2021 Female Governance across industries in Taiwan. Source: integrated from the TESG Sustainable Dataset

Among the top five industries with the highest proportion of women in governance, Agr. Science & Tech. tops the list with a high ratio of 36.4%, followed by the Financial, Tourism, E-commerce, and Trading & Cons. industries. The financial industry has the best overall performance (in both quantity and proportion) as it’s a female-dominated industry in essense. What’s more, current policies and initiatives from the FSC have also accelerated governance diversity in the financial industry.

Conversely, the bottom five industries in descending order are Glass & Ceramics, Gas & Electricity, Pulp/Paper, and Rubber. The last one is the Plastic industry, with only 11.5% female representation. From their characteristics, these five industries are more traditional and masculine, with a low proportion of women in management and boardroom. In addition, industries such as Iron & Steel, Cement, Semiconductor, and Computer & Peripheral also reach around 15% female representation, indicating that women still have a long way to go to penetrate the core of decision-making in the industries mentioned above.

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Superwomen in Taiwanese Companies

Among those companies, there are also many businesses led by women. The following are three female CEOs who were selected for the “2021 Harvard Business Review: Best Women CEOs in Taiwan” list, introducing their management philosophy and outstanding performance in business operations:

Female Governance: Best Women CEOs in Taiwan.
Examples from “2021 Harvard Business Review: Best Women CEOs in Taiwan.”
  • Chlitina-KY (4137. TW)
    Since entering the Chinese market in 1997, Bi-Hua, Chen has employed a “bottom-up” strategy and established nearly 5,000 flagship stores worldwide under the Chlitina brand.

“Those who fail to plan for the future will fail in the present, and those who fail to plan for the whole picture will fail in the part.

  • SAS (5483. TWO)
    With experience in the technology industry, Xiu-Lan, Hsu joined SAS at the age of 37 and handled multiple merger and acquisition cases. She led the successful merger of SAS with GWC (6488.TW), establishing a solid presence in the international wafer market.

“One Chinese character I’ve never liked is “等” (meaning “wait”). I want to drive SAS toward the goal of becoming the next TSMC in the silicon wafer industry.“

  • Giant (9921. TW)
    Xiu-Zhen, Du founded “Liv,” the world’s only women-exclusive bicycle brand in 2008. Starting from the female perspective, she created bicycle products and services tailored to women’s riding needs and likes and thus established an unshakable position in the women’s bicycle market.

“The brand is you, and you are the brand!”

Rise of Woman Empowerment equals Rise of ESG?

In addition to the above outstanding examples, many reports have indicated that companies with more women in governance positions perform better in market and ESG performance. However, can female leadership bring a positive impact on Taiwan’s enterprises? The “2022 White Paper on Female Governance” points out that female leaders generally pay more attention and allocate more resources to ESG investment, leading to higher ESG scores. TEJ also utilized data from the TESG Sustainable Dataset to explore further the relation between the proportion of female directors and ESG, focusing on the governance (G) aspect to minimize the influence of other factors.

Female Governance: the relation between female directors and corporate governance
Female Directors and Corporate Governance. Source: integrated from the TESG Sustainable Dataset

We used the scores from the Company Governance Evaluation System and TESG Rating, classifying companies based on the new regulation set by the FSC (one-third, 33%). Although there was no significant correlation in the overall Company Governance Evaluation System, 88% of companies rated as A+ had female directors, indicating their influence on the highest level of ratings.

In addition, analyzing the scores from the “G” aspect of the TESG Rating, companies with female directors were found to be more prevalent in the top 50% of companies (71.4%) compared to the bottom 50% (66.5%), reflecting the positive impact of female board members on corporate governance.

Women play an essential role in corporate governance. Seven to eight out of ten enterprises in the top ranks have female directors.

Last but not least, driven by policies from the FSC, it is expected to see another increase in the seats and proportion of women directors by 2025. Among these, industries with low female representation should eliminate stereotypes about women in governance and allow women to bring more possibilities to the company. Women directors should not only be considered a regulatory quota, but should be given substantive power and recognized for their professional abilities to lead the company’s growth. We look forward to seeing more women in both management and director positions in the future!

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