CSj talks to two senior Chartered Secretaries working for Mainland-based enterprises about the rewards and challenges of their roles, and the benefits of membership of the Institute.

Ma Jinru FCIS FCS, Deputy General Manager and Board Secretary, Xinjiang Goldwind Science & Technology Co Ltd, and Huang Wensheng FCIS FCS, Vice-President and Secretary to the Board of Directors, China Petroleum & Chemical Corporation, became Fellows of The Hong Kong Institute of Chartered Secretaries (the Institute) earlier this year. They bring with them a wealth of knowledge about the nature of the board secretarial role in Mainland China and, in particular, the nature of the board secretarial role in state-owned enterprises.

In the context of the convergence between the markets in Hong Kong and Mainland China, this knowledge is of increasing interest to the wider membership in Hong Kong. In a recent interview with CSj, the two new Fellows shared insights on the board secretarial role, the corporate governance regulations and culture in the Mainland, as well as the advantages of membership of the Institute.


Ms Ma points out that there are significant differences in the way the Hong Kong and Mainland exchanges and regulators communicate with listed issuers and their board/company secretaries. In the Mainland, in part due to more frequent regulatory and compliance changes, the Shanghai and Shenzhen Stock Exchanges prefer to get in touch with listed issuers directly through multiple channels – this includes hosting seminars and conferences.

In Hong Kong, by contrast, there is a more distant relationship with regulators. This adds to the importance of belonging to a professional body such as the Institute, Ms Ma points out, not only for the benefit of the continuing professional development (CPD) training the Institute provides but also as a communication channel with regulators. A greater involvement in the Institute’s affairs and activities is therefore beneficial to board secretaries, especially those working for dual-listed companies.

Ms Ma adds that, in this context, the role of the board secretary as a communication hub within enterprises is all the more important. ‘Board secretaries are valued for strong interpersonal and communication skills. Streamlining the communication between stakeholders, closing the information gap, managing the expectations of shareholders, and keeping the board abreast of regulatory and compliance changes require tact and diplomacy in addition to professional knowledge,’ she says.

As the relationship between companies and their shareholders has never been more important, the board secretary plays a key role in building long-term relationships with investors through regular, efficient and engaging communications. Increasingly, on top of financial results, international institutional investors are more concerned about the corporate governance practices of the companies they invest in. The board/company secretary should therefore formulate and maintain an effective programme of engagement with shareholders, potential investors and analysts, locally and overseas, to keep them confident about the company’s strategies and prospects, Ms Ma says.

Ms Ma also spoke about the very topical issue of board diversity. In the Mainland, just as in Hong Kong, company boards are dominated by men. Increasing board diversity has therefore become part of corporate governance best practice to improve the competitiveness and the strength of business infrastructure, hence ensuring sustainability in the long run. For Ms Ma, however, gender is not the most relevant factor for the composition of a diversified board.

‘Of course, more representation of women’s views and more gender diversity would certainly help the board look at things from different perspectives and make less risky decisions. But board diversity should also factor in other aspects of diversity, such as experience, profession, background and tenure on the board, rather than gender diversity alone,’ she says.

Huang Wensheng FCIS FCS

As a conglomerate listed on multiple bourses across two time zones (the company is listed in Hong Kong, Shanghai, New York and London), Sinopec has a global compliance team working around the clock. According to Mr Huang, Sinopec has established a standardised structure of corporate governance. Major decisions are made in accordance with the Articles of Association and company policy.

‘One of the keys to success in corporate governance is the implementation of a clear, well-defined and transparent set of procedures to maintain effective board and investor communications. A structured approach gives shareholders more confidence and also meets their requirements,’ Mr Huang says.
The global team led by Mr Huang has a clear division of labour to ensure the various roles complement each other. A team is specialised in public disclosure, while another team is focused on public affairs and investor relations. The company also has investor relations (IR) representatives in Hong Kong and New York. Their role is to channel shareholders’ and potential investors’ feedback on the company to the board, and maintain an ongoing dialogue between them.

One of the key issues associated with shareholder engagement is the alignment of shareholders’ interest with those of the board and management. For this reason, shareholder engagement often concentrates on explaining to investors the company’s strategy to improve profitability and return on equity over time.

With such a big team, Mr Huang emphasises the importance of on-the-job training as part of the overall responsibilities of team members. They are encouraged to attend training activities on corporate governance practices organised by the Institute as well as CAPCO regularly every year. Depending on their work focus, team heads are further required to update themselves constantly on legal, compliance, code of conduct, corporate governance, disclosure and IR matters, by taking part in activities arranged by the Institute, the Shanghai Stock Exchange, CAPCO and other professional organisations, local and overseas.

As a sizeable resource and energy firm, Sinopec attaches great importance to sustainability and social responsibility as it seeks to be a good citizen on a global scale. The company has therefore set up a social responsibility management committee under the board to oversee corporate social responsibility practices and sustainability issues. Mr Huang is an advisory member of the committee, and is responsible for the firm’s environmental, social and governance disclosure and reporting.

As Mainland China continues to open up its capital markets, there has been speculation as to whether the capital markets of Hong Kong, Shanghai and Shenzhen may eventually converge to become one unified listing and trading platform. While this is a long-term strategic goal, both Ms Ma and Mr Huang believe Chinese policymakers will continue to exercise foreign exchange controls in the foreseeable future. Furthermore, due to their different legal and regulatory regimes, they believe that Hong Kong will remain as a capital market open to international investors, and partially open to Mainland investors via the Shanghai and Shenzhen stock connect schemes, for some time.

‘Having said that, I do believe there is room for discussing the consolidation of the Shanghai and Shenzhen exchanges, both of which share a lot of similarity in terms of capital-raising. Consolidating these bourses into one group will boost the competitiveness of China’s capital markets, I believe,’ Mr Huang says.

SIDEBAR: On being ‘Chartered’ in the PRC

Both Ms Ma and Mr Huang agree that membership of the Institute brings significant benefits to board secretaries working for Mainland companies.

‘The training I have received during the course of my membership has been very useful to my work’, says Ms Ma. ‘For board secretaries of Mainland-based companies listed on the Hong Kong and Mainland bourses, understanding the differences in regulatory and compliance requirements between the two jurisdictions is very important. The Institute’s regular training on Hong Kong’s regulatory and compliance rules has helped me make decisions faster, on a daily basis and especially on special occasions, as we have to fulfil the requirements of two exchanges almost simultaneously.’

Mr Huang agrees. He commends the Institute’s Beijing Representative Office for doing a great job in arranging expert talks in a timely manner whenever there are new changes to the listing and compliance rules of Hong Kong. ‘Key announcements are made by the Mainland exchanges themselves directly and training is usually delivered by the China Association for Public Companies (CAPCO). But, in Hong Kong, this responsibility falls to professional bodies such as the Institute,’ he says. ‘It’s worth spending time to attend the training and sharing sessions organised by the Institute. This is an efficient and useful way to get familiarised with the latest changes to the regulatory environment.’

Both Ms Ma and Mr Huang also mention the benefits that reaching the status of fellow of the Institute brings. ‘Attaining the status of fellow is absolutely an honour. it is an accomplishment for me personally and in my career,’ Mr Huang says. ‘The designation of fellow helps me demonstrate the commitment to quality and excellence that I seek in the course of my career,’ says Ms Ma.

Mr Huang adds that having this designation not only represents a special stamp on one’s name card and CV, but also gives the holder a greater influence over the Institute’s affairs and future direction. The inclusion of senior members of the profession working for Mainland enterprises as fellows of the Institute helps maintain the close relationship the Institute has with the Mainland market and profession. There are direct benefits for the wider membership, for example, in terms of knowledge exchange. Mr Huang has been a guest speaker at Institute CPD events, speaking on topics such as corporate governance; public disclosure; board diversity; the new rules boosting the role of the Communist Party within corporate structures; and the implications of state-owned enterprises reforms and restructuring.