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Tech-savvy leadership gives S'pore firms an edge over Hong Kong counterparts: study
SINGAPORE-listed firms are better prepared than their Hong Kong-listed counterparts in facing the technological tsunami that is affecting businesses across the globe because they have better tech-savvy leadership.
According to a study to be released today, 44.6 per cent of listed companies in Singapore have technologists in leadership positions versus just 20.3 per cent in Hong Kong.
Both markets have seen steady increases in the number of companies with technologists in senior positions since 2011 - Singapore from 17.9 per cent and Hong Kong from 6.3 per cent.
Another finding reflected on the kind of companies listed on the Singapore Exchange (SGX) vis-à-vis Hong Kong's Hang Seng Index (HSI).
On HSI, IT companies dominated with the most number of technologists in a leadership position, accounting for more than 46 per cent, followed by the financial sector and consumer goods.
On SGX, there was a more even distribution, with the banking sector leading the way, accounting for 12 per cent of technologists in a leadership position. The sector was followed by real estate management and development, food and staples retailing, and aerospace and defence (combined) - a more diversified group of companies.
The research was done by Calastone, a global funds transaction network and fintech company. The white paper evaluated the ability of business leaders in the region to understand the implications of new technologies, and to adopt and harness their potential.
Leo Chen, Calastone's managing director, head of Asia, told The Business Times that the key learning from the survey is the difference in the population of professional technologists in the executive leadership of organisations on the two stock exchanges.
"When looking at the details behind this, sectors such as financial/banking show Singapore appear to be more advanced with more technologists present in the leadership. This could in part be explained by Singapore's more long-standing commitment to supporting the evolution of fintech."
He added that apart from SGX having more than double the number of companies employing technologists in leadership positions compared to HSI, most companies listed on SGX have at least one technologist in leadership role, unlike in Hong Kong.
"Calastone's data shows that businesses within Hong Kong still need greater focus on improving technologist representation in leadership functionalities. This is essential for all industries on the HSI if they want to proactively deal with technological changes."
Mr Chen noted that this is also critical for Hong Kong if it is to retain its competitiveness in the region, particularly with the advancements being made in Singapore and Australia, "not to mention mainland China".
But he added that one consistency between both the Hong Kong and Singapore markets is that none of the companies analysed have any technologist representation in the boardroom. A previous study by Calastone, which analysed the FTSE 100 index, showed that UK had made greater progress, with 4 per cent of the listed companies having a technologist at board level.
"Hong Kong and Singapore are comparatively lagging behind the UK, and it is clear that further opportunity remains to improve the population of technologists in corporate leadership positions across both regions to ensure companies remain competitive," Mr Chen said.
The UK study showed that the sectors that had technologists in the boardroom included travel and leisure, indicating how technology-focused this industry has become. Financial services, pharmaceuticals and biotechnology, and technology hardware and equipment were the other industrial sectors with technologists in the boardroom in the UK.
Mr Chen said company boards and management teams historically have been dominated by professionals from accountancy and legal backgrounds. "Technology is such an important tool today that it's critical that professional technologists are also represented at the most senior corporate levels.
"This is particularly evident in the financial sector where banks and financial firms are being challenged by market changes, including changing customer needs - a challenging regulatory environment and wholesale cost pressures."
Noting the global shortage of IT talent, he added that one way to help attract talent is to have the right culture nurtured within the organisation. "Organisations that already recognise the value and importance of technology - including through the seniority within the corporate hierarchy - have an advantage in attracting and retaining such talent."
The Calastone study noted that an absence of technologists in leadership positions may put firms at a disadvantage, lacking the appropriate technological vision or long-term view to deal with changing markets and client behaviours.
It added that this is becoming increasingly important for fund managers and fund distributors. "The funds industry is currently going through tremendous technological change. This is not only driven by changing consumer requirements and the increasing power of technology, but also by tightening regulation and lowering revenues," the report concluded.