Concluding the HKICS Corporate Governance Conference 2016, Event Chair Peter Greenwood FCIS FCS, made an impassioned plea to the younger people in the audience to have confidence in their abilities to bring about positive change.
This has been the Institute’s 10th two-yearly corporate governance conference (CGC). Whilst we might still be two years away from our 20th anniversary (if you think about it), this offers a moment to take stock of where we have been, where we are and what the future might hold for Hong Kong’s corporate governance practitioners.
Looking back to those early conferences, it is striking that some of the themes we were discussing then are still very much on the governance agenda. Examples would include the role of directors (especially independent non-executives), board composition and the role of major shareholders, be they founding families or the state. It’s equally striking that some themes have arrived on our agenda which few, if any, of us anticipated. To cite a few such emerging, or emerged, issues might include: environmental and social governance; the implications of the Internet and social media; a systematic approach to the management and disclosure of risk; and the extraordinary growth of Mainland-based listed companies.
Common to both categories is the increasing depth and sophistication with which corporate governance is now debated, regulated and applied in Hong Kong. Throughout the years, our conferences have consistently demonstrated that Hong Kong has the intellectual firepower to develop and implement a governance regime which matches the quality of that in other leading financial markets. The CGC 2016 drew on the expertise and experience of predominantly locally-based experts and practitioners, representing a full range of stakeholder interests. In doing so, we demonstrated Hong Kong’s ability not merely to be a follower of that elusive animal ‘global best practice’, but to recognise the characteristics and needs of our own market and to adopt policies and standards which best serve and protect the interests of Hong Kong companies, their shareholders and stakeholders.
But, and there is always a but, our speakers and panellists also commented on ‘patchy’ performance. Patchy in the sense that some issues, for example environmental performance and shareholder communications, offer general room for improvement. Patchy also in the sense that governance standards vary widely across the spectrum of Hong Kong companies. None of this is surprising. Corporate governance policies, practices and implementation are never ‘finished’. An oft-repeated, and widely-accepted theme of our conferences has been that corporate governance is a journey, not a destination.
For that reason, we may well be holding our two-yearly discussions in the decades ahead. And, just as during our first 10 conferences, we can expect to be addressing the themes we have already ventilated, alongside some which today we can hardly foresee.
In the future, as in the past, the Institute will strive to make its work on corporate governance, within and beyond the conference, relevant to our members. Corporate governance is important – poor governance ruins businesses, destroys jobs, erodes shareholder and investor value and damages people’s livelihoods and well-being. Chartered Secretaries might sometimes feel that they cannot make a difference, whether as individuals or as a profession as a whole, but this is not, and cannot be, the case. We are the corporate governance professionals, if we do not make a difference, who can?
It will fall to our younger members to make that difference to corporate governance standards in Hong Kong – and, for that matter, in Mainland China – in the years to come. However, for reasons which lie far beyond the scope of this conference and these remarks, Hong Kong seems to be suffering from a lack of confidence in itself, and in its qualities and capabilities. As part of this, Hong Kong’s young people seem to underestimate themselves, their potential and their ability to bring about positive change.
In the specific context of Chartered Secretaries, our younger colleagues might feel that some of the issues canvassed at our conference lie beyond their ability to exert a positive influence. Speaking to those colleagues directly, if you are a company secretary or, even more so, if you are ‘only’ a deputy company secretary, corporate secretarial manager or assistant corporate secretarial officer at a small unlisted company, you might think that challenges such as promoting board diversity, shareholder engagement and better board interaction with senior management at major listed companies are irrelevant to you.
This isn’t, and shouldn’t be, the case. The companies for which you work should grow and become the listed companies of tomorrow. If not, you will move over to those companies. And within those businesses you will develop and rise to become the company secretaries and senior managers of the future. The limits on your own ability to shape, influence and realise a comprehensive, thorough, practical and top-class corporate governance regime in Hong Kong are, in large measure, only those you yourselves choose to accept. Do not underestimate yourselves. Do not underestimate your own ability to make a difference. Do what needs to be done.
Our first 10 corporate governance conferences have shown that Hong Kong is capable of great strides towards improving corporate governance. With the ability and commitment of our profession, reinforced by the energy and initiative of our younger colleagues, we can be confident that the next 10 conferences will see similar, perhaps even greater, progress.
Peter Greenwood FCIS FCS
HKICS Corporate Governance Conference 2016
Before he retired in May 2013, Peter Greenwood worked for CLP Holdings in Hong Kong as Corporate Counsel then Company Secretary and finally as Group Executive Director – Strategy.