Appendix

By an analysis of 2,504 directors from CSI 300 companies, it is recommended to cultivate a market system for independent directors in China.

Appendix I: other director data distributions

01. Limited gender diversity on CSI 300 boards

Our analysis also studied the gender diversity on CSI 300 boards. Among these directors, 12.3% of CSI 300 boards were women (203), less than the 30.7% on S&P 500 boards. On average, there was less than one women director serving on each CSI 300 board.

The women ratio of either independent or non-independent directors on CSI 300 boards was quite similar to the proportion of “all directors.” However, this did not apply to S&P 500 boards, where the female ratio was only 12.7% for non-independent directors, much lower than the 35.4% found among independent ones. Considering non-independent directors were only a very small portion of S&P 500 boards, it means females rarely served as executives.

Deep dive into gender diversity across boards

Figure 16: Deep dive into gender diversity across boards

_{Source: Russell Reynolds analysis of CSI 300 and S&P 500 board directors: 1,648 “all directors” and 530 independent directors from CSI 300 companies; 5,882 “all directors” and 4,656 independent directors from S&P 500 companies}

02. ESG experiences: emerging on Chinese boards, with room to develop

From their biographies, we learned that independent directors had richer ESG-related experiences than non-independent directors, although there were some gaps between CSI 300 and S&P 500 directors in all categories of environment, social, and governance.

ESG experiences

Figure 18: ESG experiences

_{Source: Russell Reynolds analysis of CSI 300 and S&P 500 board directors: 1,605 “all directors” and 502 independent directors from CSI 300 companies; 4,940 “all directors” and 3,810 independent directors from S&P 500 companies}

Environment: Both independent and non-independent directors on CSI 300 boards shared energy and water conservation related experiences, while S&P 500 directors had more sustainability and climate experience.
Social: CSI 300 and S&P 500 directors shared experiences related with economic development, education, non-profit organization, and human recourses, while the latter had more exposure in diversity and philanthropy.
Governance: The most common experiences falling in this category were regulatory and risk related ones, on both CSI 300 and S&P 500 boards. The latter had more cyber security experiences.

03. POE directors have more digital experience

Experiences on digitalization or information technology are taking a place on boards. 5.4% of CSI 300 “all directors” and 8.4% of S&P 500 “all directors” had digital experiences (6.8% and 9.2% for independent directors respectively.)

The proportion of “all directors” and independent directors of POEs with digital experience is slightly higher than those of SOEs. If only looking at the directors of POEs, the proportion of digital experience is almost the same as that of the directors on the S&P 500 boards.

Digital experiences in board directors

Figure 20: Digital experiences in board directors

_{Source: Russell Reynolds analysis of CSI 300 and S&P 500 board directors: 1,657 "all directors" and 532 independent directors from CSI 300 companies; 5,888 "all directors" and 4,657 independent directors from S&P 500 companies; Russell Reynolds analysis of POE and SOE board directors: 769 "all directors" and 224 independent directors from POE; 861 "all directors" and 308 independent directors from SOE}

04. Other executive experiences: not popular on boards

Other executive experiences, including CTO, COO, CHRO, CMO, and risk officers, were less popular on both CSI 300 or S&P 500 boards, though the latter had a slightly larger portion of directors with executive experiences.

The difference in the proportions of POEs and SOEs directors in these roles are very small, although the proportion of SOE independent directors with risk experience is slightly higher.

Other executive experiences

Figure 21: 4. Other executive experiences

Appendix II: a note on data and methodology

This study used data exported from S&P Global Market Intelligence, which was mined and organized from annual reports of those listed companies. Illustrations on board compositions, educational backgrounds, age distributions, and compensation distributions were induced from relevant fields in the original data. Professional experience, gender diversity, and ESG experiences were excavated from director biographies by relevant keywords.

The whole dataset, due to data availability and integrity, includes 2,504 directors from CSI 300 companies (246 companies due to data availability) and 5,917 directors from S&P 500 companies. CSI 300 data includes 1,286 directors from 133 POEs and 1,218 directors from 113 SOEs.

Due to differences in data availability and completeness, the sample size for each part of this study varies:

Experiences breakdown: 1,657 "all directors" and 532 independent directors from CSI 300 companies; 5,888 "all directors" and 4,657 independent directors from S&P 500 companies. 769 "all directors" and 224 independent directors from POE; 861 "all directors" and 308 independent directors from SOE.
Educational backgrounds: 901 "all directors" and 321 independent directors from CSI 300 companies; 5,344 "all directors" and 4,321 independent directors from S&P 500 companies. 379 "all directors" and 119 independent directors from POE; 522 "all directors" and 202 independent directors from SOE.
Age distribution: 2,231 "all directors" and 806 independent directors from CSI 300 companies; 5,725 "all directors" and 4,647 independent directors from S&P 500 companies. 1,096 "all directors" and 383 independent directors from POE; 1,135 "all directors" and 423 independent directors from SOE.
Compensation distribution: 1,280 "all directors" and 618 independent directors from CSI 300 companies; 5,205 "all directors" and 4,422 independent directors from S&P 500 companies. 662 "all directors" and 280 independent directors from POE; 618 "all directors" and 338 independent directors from SOE.
Gender diversity: 1,648 “all directors” and 530 independent directors from CSI 300 companies; 5,882 “all directors” and 4,656 independent directors from S&P 500 companies. 662 "all directors" and 280 independent directors from POE; 618 "all directors" and 338 independent directors from SOE.
ESG experiences: 1,605 “all directors” and 502 independent directors from CSI 300 companies; 4,940 “all directors” and 3,810 independent directors from S&P 500 companies. 783 “all directors” and 218 independent directors from POE; 837 “all directors” and 292 independent directors from SOE.
Digital experiences: 1,657 "all directors" and 532 independent directors from CSI 300 companies; 5,888 "all directors" and 4,657 independent directors from S&P 500 companies; 769 "all directors" and 224 independent directors from POE; 861 "all directors" and 308 independent directors from SOE.
Other executive officers: 1,657 "all directors" and 532 independent directors from CSI 300 companies; 5,888 "all directors" and 4,657 independent directors from S&P 500 companies; 769 "all directors" and 224 independent directors from POE; 861 "all directors" and 308 independent directors from SOE.

The supervisory board members in CSI 300 companies were not included in our analysis. Under the Corporate Law of China, a two-tiered board structure can be adopted by Chinese companies. For day-to-day management, a board of directors and a board of supervisors must be appointed by the shareholder assembly respectively, and report to the assembly separately. In this case, it was not a real two-tiered system in Chinese companies, and board of supervisors were excluded from board of directors.