At the Institute’s Annual Celebration 2023, held in January this year, The Honourable Christopher Hui Ching-yu GBS JP, Secretary for Financial Services and the Treasury, spoke about the close cooperation between the government and the govenance profession in promoting good governance and Hong Kong’s competitive edge.

I am delighted to speak to you all face-to-face. It has been over three years since the Covid-19 pandemic caught us, but with the concerted effort of different sectors of the community and the government, we are now moving back to normalcy.

We are ready to relaunch Hong Kong on the global stage, and we open our arms to welcome people and companies who would join our journey. The Chief Executive set out clearly in his 2022 Policy Address that we will compete for talent more proactively and aggressively. 

Competing for talent

I am particularly keen to see more talent joining the domain of environmental, social and governance (ESG). We require a wide range of ESG expertise – ranging from ESG financing, investment, product development, disclosure and reporting standards, rating assessment, risk management, regulation and compliance, to investment research and analysis. We need this expertise to grasp the ESG-related financial business opportunities emerging with our country and Hong Kong’s endeavour to achieve carbon neutrality in the years ahead. 

Apart from grooming local professionals, we have strengthened talent admission schemes to encourage talent to come to work in Hong Kong. The latest talent list, which outlines professions that Hong Kong needs most and are eligible for the immigration facilitation under the Quality Migrant Admission Scheme, already includes experienced financial professionals in ESG. 

The government has doubled its effort through launching the non-employment-tied Top Talent Pass Scheme to attract individuals whose annual salaries reach a certain level and graduates from the world’s top 100 universities. The Top Talent Pass Scheme is very well received, with around 3,800 applications received since its launch on December 28 last year, and the government has already approved around 2,400 applications.

I understand HKCGI also attaches great emphasis to talent training as one of the most prominent qualifiers of the internationally recognised Chartered Secretary and Chartered Governance Professional qualification in the region. I am delighted to learn that despite the Covid-19 pandemic in the past few years, the Institute’s Chartered Governance Qualifying Programme, master programmes under the Institute’s Collaborative Course Agreement, Partnership Bachelor’s Programme and other professional development programmes continue to be well received and enthusiastically enrolled in. The programmes will surely continue to play a major role in nurturing corporate governance talent going forward, and my bureau and the Companies Registry are happy to provide support.

Updating Hong Kong’s regulatory infrastructure 

Talent attraction and nurturing aside, the government also reviews the regulatory infrastructure from time to time for enhancing the corporate governance ecosystem. In December last year, we introduced the Companies (Amendment) Bill 2022 into the Legislative Council (LegCo), which seeks to expressly provide flexibility for local companies to make good use of technology when holding general meetings.

Under the proposal set out in the Amendment Bill, companies may hold fully virtual or hybrid general meetings, unless their articles of association expressly prohibit them from doing so, or require a general meeting to be held only at a physical location. This will enable companies to benefit without having to go through an amendment procedure to their articles of association, while at the same time retaining the companies’ right to choose which manner of conducting the general meetings best fits their interests. We will also require companies to ensure that legitimate participants of the general meetings would be able to listen, speak and vote through the technology employed at the meetings, such that interests of shareholders would not be undermined.

We will soon resume the second reading of the Amendment Bill at LegCo and, subject to LegCo’s approval, it will take effect three months thereafter to allow sufficient preparatory time for companies. We will provide sufficient guidance notes and reference materials by then. In fact, my team has worked closely with Ernest Lee FCG HKFCG(PE), HKCGI President and Technical Partner of Deloitte, together with his team, when drawing up the legislative proposal, and we thank Ernest for his valuable advice rendered. We will keep in
close liaison with the Institute and count on your continued support when it comes to the implementation stage of the proposal.

ESG regulatory developments

For listed companies, The Stock Exchange of Hong Kong Ltd (the Exchange) has also made considerable progress recently on promoting better governance.

In April last year, the Exchange launched a new diversity repository named Board Diversity & Inclusion in Focus, aiming to improve access to information on and transparency around board diversity, enabling investors and other stakeholders to stay informed of businesses’ policy and approach to good governance and board diversity. It also introduced the section ESG in Practice in its ESG Academy, which highlights the Exchange’s latest ESG regulatory developments, and examples of good ESG practices among its issuers.

In November 2022, the Exchange published the findings of its latest review of issuers’ ESG disclosures, which focus on the requirements that came into effect in 2020, namely boards’ ESG governance and management of climate-related risks. Results showed that over 95% of issuers disclosed their boards’ oversight and management approach on ESG matters. On climate change, 85% of issuers acknowledged the importance of climate-related risks and chose to disclose details on all new climate-related requirements. These findings show that good progress has been made in ensuring that boards of Hong Kong listed companies are giving the necessary focus to ESG considerations, sowing the seeds for more ESG achievements in the future.

Hong Kong’s competitive edge

The Office for Attracting Strategic Enterprises, which came into full operation in December 2022, demonstrates the government’s determination to encourage international and Mainland companies to set up and expand their business operations in Hong Kong. Abundant supply of high-quality corporate governance professionals is one of our competitive edges and I am confident that the industry will enjoy lots of new business opportunities as companies look to set foot in Hong Kong. On that, rest assured that the government will continue to be in close collaboration with the industry in forging ahead.

Thank you very much and I look forward to more opportunities to meet with you in person to discuss new ideas in further promoting good corporate governance in Hong Kong. For now, may I take this opportunity to wish you and your families a Happy Year of the Rabbit. 

The Honourable Christopher Hui Ching-yu GBS JP, Secretary for Financial Services and the Treasury

Financial Services and the Treasury Bureau

This article has been adapted from Mr Hui’s Guest of Honour speech at the Institute’s Annual Celebration 2023.