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Most ASX200 companies don't have a clue about doing business in Asia

Suhaimi Abdullah/Getty Images

Australia’s big ASX-listed companies have an alarmingly low level of business capability in Asia, according to a study of the ASX200.

The research by Asialink Business, with the support of PwC and the Institute of Managers and Leaders, looked at Australian boards of directors and senior leadership teams and found that 90% of ASX200 companies are not Asia-ready.

There were pockets of strength in key industries including mining and financial services but other sectors are lagging.

“Asia is a competitive playing field,” says Asialink Business CEO Mukund Narayanamurti.

“Just as we wouldn’t send our top athletes onto the field without ample training, we shouldn’t expect business leaders to kick winning goals in Asia until they are match fit.’

Here are the six capabilities the companies were measured on:

The research found only 10% of the ASX200 and just 18% of the BRW top 30 private companies demonstrating a high level of Asia skills and knowledge.

Only 19% of board members on the ASX200 are Asia ready.

Senior executives didn’t do any better, with only 14% found to be Asia capable.

The study also revealed trends based on market capitalisation and industry — large public companies out-performed smaller ones.

Energy and resources and financial services sectors were the best performing industries, while manufacturing and healthcare and pharmaceuticals were the least ready for Asia.

Andrew Parker, PwC Asia Practice Leader, says the overall lack of Asia readiness revealed by this study is troubling.

“If the last 25 years have been about shipping our commodities to Asia, the coming decades will be a story of services and consumption fuelled by a rapidly expanding Asian middle-class,” he says.

“If we aspire to be more than casual observers, Australian businesses will need to be where the consumers are — and that is increasingly in Asia.

“From the boardroom to the shop floor, our business leaders urgently need to invest in developing the capabilities
and the talent that are essential for success in the region.”

Research by Asialink Business in 2012 revealed a link between better performance and the proportion of senior business leaders with sophisticated knowledge of Asian markets, understanding of cultural nuances and extensive experience in the region.

Asialink Business was set up in 2013 with support from the federal government. The University of Melbourne and the Myer Foundation are key stakeholders.

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