Two Hong Kong members share their work experience in the Mainland, their views on corporate governance practice and the career prospects of Hong Kong professionals working in the Mainland.

Angel Sze FCG HKFCG, Company Secretary, Fosun International Ltd

Fosun was founded in 1992 and is a globally diversified, family-focused and innovation-driven consumer group. In 2007, Fosun International was listed on the Main Board of the Stock Exchange of Hong Kong (Stock Code: 00656). 

Ms Sze joined Fosun in 2007 and has been acting as the Company Secretary of Fosun International since 2009. She has led teams in different offices such as Hong Kong, Shanghai and Europe. She ensures compliance with Hong Kong listing rules and relevant regulations for the listed company and its directors. She also handles information disclosure, regulatory reporting and approval procedures. In recent years, she has actively promoted Fosun’s sustainable development efforts, serving as the Head of the group’s ESG Management Committee. She has been involved in optimising Fosun’s ESG reporting, actively responding to matters relating to ESG ratings, promoting ESG culture, and establishing a global ESG network with persons from both domestic and overseas subsidiaries who are responsible for ESG to promote best practices, facilitate resource sharing, and the exchange of experience and practice. 

Ms Sze shares that, although Fosun International is a listed company in Hong Kong, the group has diverse businesses including pharmaceuticals, retailing, insurance and tourism, with operations spanning Hong Kong, the Mainland and various locations worldwide. The group also has subsidiary companies that are listed in different and sometimes multiple jurisdictions. 

Ms Sze needs to ensure smooth communication among these companies, handle simultaneous information disclosure and ensure compliance with listing rules in different jurisdictions. She gives an example of Yuyuan, the flagship platform for Fosun’s Happiness segment listed on the A-share market in the Mainland and a subsidiary of Fosun International listed in Hong Kong. In addition to complying with A-share listing rules, Yuyuan also needs to adhere to Hong Kong listing rules. As the shareholder, Fosun International needs to be aware of the relevant transaction information of its subsidiaries. ‘Although each listed company has its own governance structure, if our subsidiaries are listed companies, their independent decisions may trigger disclosure requirements according to the Stock Exchange of Hong Kong rules. Therefore, timely communications on compliance matters are also an important part of our daily work while ensuring the independence among the entities,’ she explains.  

Ms Sze emphasises that as a company secretary it is crucial to have effective language skills, communication abilities and integration skills to overcome geographical limitations. ‘The role of a company secretary is not just about receiving and delivering documents or completing reports. I need to establish effective communication channels. Besides informing responsible individuals about relevant resources, what to pay attention to, and who to contact, I also need to build a communication ecosystem. It’s not just about establishing connections between the group and its subsidiaries, but also facilitating communication among subsidiaries or those within the same industry.’ 

She adds that professional board/company secretaries play a crucial role in managing company risks, establishing effective compliance mechanisms at various levels, including the board, investment teams and among general employees, providing timely compliance advice in specific situations, delivering targeted compliance training, and enhancing compliance culture. These efforts contribute significantly to company compliance and achieving good corporate governance in listed companies. 

Taking the ESG practices that Fosun has actively promoted in recent years as an example, Ms Sze needs to connect the responsible teams of various subsidiaries and establish the group’s ESG framework. ‘As a company secretary who understands the company’s business and who has  responsibility for the annual report, this role is well suited to initiating and promoting ESG work. As governance professionals, we are closest to the board of directors, support their work daily and understand regulatory trends. We can proactively promote relevant concepts within the company at various levels and the integration of ESG principles into the company’s strategy and investment decisions.’ 

Ms Sze shares that, in recent years, the Institute has been dedicated to enhancing the professionalism and corporate governance standard of board/company secretaries, assisting members in advancing from being Chartered Secretaries to becoming governance professionals, and highlighting the professionalism and breadth of the board/company secretary role. The activities and training provided by the Institute also focuses on meeting the needs of its members, offering practical training to help members understand the latest regulatory requirements and gain insights into industry best practices. 

She encourages Hong Kong members who are interested in developing their careers in the Mainland or other parts of the world to hone their communication skills and maintain a strong sense of responsibility, resilience and self-motivation. ‘Once you find a platform suitable for your development, continue learning and innovating, stay focused and give it your all. This is how you can enjoy the process, discover yourself, achieve personal breakthroughs and find professional satisfaction.’  

‘While focusing on your work, also don’t lose sight of market changes and stakeholders’ expectations, and participate in activities organised by industry associations. It’s not just about delivering regular reports but also leveraging the professional skills of a board/company secretary, such as valuing the accuracy and compliance of information, and striving to improve corporate transparency and showcase the efforts made in good governance.’

Tom Chau FCG HKFCG, Partner, Haiwen & Partners LLP

Mr Chau’s main areas of practice include IPO, bond issuance, mergers and acquisitions of and by Hong Kong listed companies, private equity financing, regulatory compliance and ESG work of listed companies. Starting in 1994, Mr Chau focused on the Hong Kong listings of PRC companies, both state-owned enterprises (SOEs) and privately owned enterprises. In 2008, he relocated to Beijing and continued to assist Mainland companies who wish to list in Hong Kong, providing legal advice and services related to the Hong Kong capital market under Hong Kong law. 

In his work, Mr Chau interacts with many board secretaries and company secretaries of listed companies in the Mainland, and maintains a close cooperative relationship with them. He points out that in recent years, more Mainland companies have chosen to list in both Hong Kong and the Mainland, and have to comply with annual reporting, information disclosure and regulatory requirements across borders. Mr Chau needs to provide legal advice to board/company secretaries and work with them to address legal challenges. 

‘The legal system in Hong Kong is based on common law, while the Mainland’s company law is based on civil law, and they have different judicial systems. In addition, the cultural and business backgrounds of the two regions are different, and there are also differences in the development timelines of their capital markets. Therefore, when dual-listed companies encounter the need to comply with both Mainland and Hong Kong rules and regulations, we are inclined to advise our clients to adhere to the stricter one, not just for compliance purposes, but also for enhancing the clients’ internal control and corporate governance levels, so as to meet international standards. We assist clients in finding commercially sensible methods that can simultaneously meet the requirements of both regions in terms of regulatory content, requirements and timelines,’ explains Mr Chau. 

He adds that in the face of the practical differences between civil law and common law, as well as the fact that the two regions’ regulatory bodies do not have a complete understanding of each other’s practices, as a legal team, they need to have good language and communication skills and find ways to carefully handle large amounts of information. He also expects young lawyers in his team to translate legal documents themselves to enhance their language skills and train them to clearly convey regulatory requirements in different languages.  

Mr Chau is also of the view that, even though translation work is time-consuming, the process is of great value to the draftsman as it provides a different angle to review the document when the content is presented in another language. It is not uncommon that draftsmen could then identify errors or problems with the original draft. This exercise helps enhance the quality of our services. Mr Chau says he benefited a lot from this when he was a junior lawyer.   

He adds that their work is not simply a matter of translating from one language to another. ‘In addition to being legal practitioners, we are also translators of legal provisions and regulatory requirements. We need to explain to clients in a language they can understand the focus of regulators in both regions and the legislative history,’ says Mr Chau. 

He gives an example of connected transactions in listed companies. Under Hong Kong listing rules, relevant transaction information should be disclosed by way of announcement (or, if necessary, also seeking independent shareholders’ approval) in a timely manner. Some clients may miss the deadline for disclosure and believe that such delay is excusable and justifiable as such connected transactions bring benefits to the company and this can be used as an exemption or mitigation plea. ‘Essentially, every transaction of a listed company, by nature, should be in the best interest of the company, so it cannot be used as an exemption/mitigation plea for late reporting. We need to explain in detail to clients the regulatory rationale and make them understand the emphasis of the regulations,’ Mr Chau says. He adds that in recent years, due to significant market changes and the stricter regulatory climate, the challenges in compliance have also increased. In addition to assisting clients in meeting disclosure standards, Mr Chau also goes a step further for them. ‘In my own practice, I hope to go a step further, satisfying both compliance requirements and the company’s business needs. After making a decision, it should receive a favourable market response.’ 

Mr Chau is one of the first lawyers to station in the Mainland, serving Mainland SOE clients, and he has observed significant progress in the Mainland’s board secretary profession in recent years. ‘Board secretaries have a better understanding of Hong Kong’s regulatory culture, and regulatory work is not something they just hand over to lawyers without being involved. On the contrary, they continuously improve their skills and capabilities, aligning themselves with international standards.’ He believes that there is much room for development in the compliance industry in the future and advises those members of the Institute interested in developing in the Mainland to enhance their language skills and professional competency. Most importantly, they should have a respectful and inclusive attitude towards different cultural backgrounds. ‘This year marks the 30th anniversary of a Mainland company listing in Hong Kong. In recent years, an increasing number of Mainland companies have listed in Hong Kong, forming a community with a compliance culture. This community, together with the efforts of the Institute, provides more opportunities for company secretaries and board secretaries in the Mainland to bond and communicate, promoting the improvement of their technical skills and positively influencing the culture of compliance.’ 

Hsiuwen Liu 
Journalist