Kenneth Jiang FCIS FCS(PE), Chief Representative of the Institute’s Beijing Representative Office, gives an update on the work of the Institute in the Mainland in fiscal 2020.
Fiscal 2020 has been an extraordinary year for The Hong Kong Institute of Chartered Secretaries (the Institute). Against a backdrop of political and economical turmoil, as well as the COVID-19 global pandemic, the Institute has maintained its commitment to its core mission of promoting quality corporate governance in listed companies in Hong Kong and the Mainland.
Reviewing the past
As the country celebrates the 70th anniversary of the establishment of the People’s Republic of China, the Institute is also celebrating 70 years of the presence of Chartered Secretaries in Hong Kong, as well as 25 years of the Institute as an independent local professional body. In December 2019, the Institute held a 70+25 double anniversary celebration in Beijing, friends gathered together for a review of the past, and joined hands to create a new era of the profession.
In the beginning of 2020, before Lunar New Year, COVID-19 broke out in Wuhan. As an awarded Hong Kong organisation for its charity work, the Institute responded quickly and mobilised its wholly owned subsidiary, HKICS Consulting (Beijing) Ltd, to donate to the frontline medical staff of Wuhan through Red Cross Society of China. The Institute fulfilled its social responsibility as a professional organisation and expressed its determination to do its part to win the battle against the pandemic. The Institute also provided services to its members, students and Affiliated Persons (APs) via online and offline modes to minimise the impact of the pandemic.
Steady membership growth
The Institute’s AP programme continues to enjoy broad-based support among listed companies in and outside the Mainland. In addition to attracting company secretaries of H share companies, the Institute’s reputation has spread by word of mouth, and board secretaries from increasing numbers of red chip, A share, and to-be-listed companies, as well as other corporate governance practitioners, have joined the Institute. As of 31 August 2020, there were 177 APs – they are from 74 H share companies, 34 red chip companies, 45 A+H share companies, and 13 A share and to-be-listed companies, as well as 11 non-listed companies.
In Hong Hong and the Mainland, more responsibilities have been placed on directors and board secretaries. The expectations regarding the professional standards of directors, supervisors and related corporate governance personnel have also increased. In order to meet this trend, the Institute’s Council has decided to expand the scope of recruitment of APs starting from 1 July 2020. These corporate governance related personnel can now join the Institute as APs. The Institute has tailor-made professional courses to enhance their professional skills, and serves as a platform to expand their professional contacts; to speak up for them and safeguard their rights and interests.
Responding to the latest international developments in corporate governance, and to reflect changes in the scope of work and governance role of its members, the Institute began to award the new Chartered Governance Professional (CGP) qualification to qualified members starting in September 2018. The new qualification is awarded alongside the existing Chartered Secretary (CS) qualification.
In recent years, more corporate governance responsibilities have been placed on company/board secretaries by regulators around the world. Benefitting from this trend, and due to the Institute’s strategy of pursuing professional reform, the professional qualification awarded by the Institute has become increasingly sought after by listed companies and recognised by regulators in Hong Kong and the Mainland. The Institute’s membership base in the Mainland has increased steadily. As of 31 August 2020, the number of registered students and members in the Mainland amounted to 295 and 108, respectively.
To satisfy the great demand for quality governance professionals in the Mainland, and to help more professionals obtain the CS/CGP dual designation, The Open University of Hong Kong (OUHK) started to offer a Postgraduate Programme in Corporate Governance (PGPCG) in Shanghai in 2016, and offered another PGPCG in Shenzhen in 2019. A total of 44 PGPCG graduates have successfully applied and become members of the Institute.
The PGPCG is mainly conducted through distance learning, supplemented by a face-to-face tutorial session every month during the weekend. Students who complete the programme will be qualified to apply for credits under the Master of Corporate Governance (MCG) programme of OUHK. Upon successful completion of the residential school held at OUHK in Hong Kong, students will be entitled to a Master of Corporate Governance degree, and they may apply for full exemption from the Institute’s professional examinations. Once they have gained the requisite working experience, candidates may apply for election to membership of both the Institute and The Chartered Governance Institute.
Breakthroughs in professional development
Since the launch of the Institute’s AP programme, 53 Enhanced Continuing Professional Development (ECPD) seminars have been held, attracting more than 7,000 participants, including board secretaries, directors, supervisors, relevant staff of the office of the board secretary and other senior managers. The seminars have covered the latest regulatory developments, board secretarial practices and relevant corporate governance issues, and were delivered by board secretaries and other experienced professionals. The aim is to offer an opportunity for participants to get an understanding of the latest regulatory framework and discuss relevant practices, raise awareness among directors, supervisors and senior managers of good corporate governance issues and increase recognition of the importance of the work of the board secretary. The Institute’s CPD services promote the effective fulfilment of the governance role of the board secretary and ultimately help to enhance the corporate governance of listed companies.
The Institute conducted its first thematic training for directors in Xishuangbanna in May 2019 on the theme of Governance of the Board of Directors and Practices in Directors’ Onboarding. The second thematic training for directors was held in Suzhou in September 2020, under the theme Director Responsibilities, Core Duties and Governance Practices. The Institute will continue to actively plan lectures on board dynamics training. This training aims to promote and develop the professional qualifications of Chartered Governance Professionals, cultivate outstanding corporate governance talents as chief governance officers, and meet the evolving requirements of international corporate governance.
Physical attendance at the Institute’s seminars was not possible in the first half of 2020 due to COVID-19. In order to meet the urgent information needs of members, APs, directors, board secretaries and other senior managers, and to update their knowledge on laws and regulations, as well as to provide practical operation plans, the Institute held its first free webinar on 26 April 2020 in the Mainland. The webinar – titled Amendment of H Share Companies’ Articles of Associations and Practical Focus of Information Disclosure under the COVID-19 Epidemic Situation– discussed practical steps to overcome difficulties in revising the company constitutional documents and necessary clauses, as well as solutions on accounting and information disclosure under the pandemic. More than 200 people attended the webinar online. The success of these events has enabled the Institute to accumulate experience and has laid a good foundation for the Institute to explore this new mode of holding webinars in the Mainland in the future.
In addition, to further facilitate communication and sharing among board secretaries, regular meetings of the five Regional Board Secretary Panels (RBSPs) in Beijing, Shanghai, Shenzhen, Guangzhou and the Southwest (Chongqing and Chengdu) have been held every year to discuss hot topics. Two RBSP meetings/roundtable sessions were held on 9 and 10 January this year in Beijing and Shanghai respectively, featuring thorough discussions on changes in laws and regulations of notification periods of Mainland and Hong Kong general meetings. The events attracted over 80 board/company secretaries, senior managers, regulatory representatives, professional representatives, Institute members, APs, as well as students from Beijing and Shanghai. RBSP meetings in Shenzhen, Guangzhou and the Southwest were cancelled because of the pandemic.
Strengthening research support
Pulling together the intelligence and experience of seasoned board secretaries and other professionals, the Mainland China Technical Consultation Panel (MCTCP) was set up in 2017 to draw up guidelines and conduct studies on corporate governance practices pertinent to the work of board secretaries and to provide research support to regulators in the formulation of policies and development of rules and regulations.
Since the Institute’s Vice-President, Dr Gao Wei FCIS FCS(PE), who is also Chairman of the Institute’s MCTCP, has already updated readers on the Institute’s advocacy and research work in the Mainland in the preceding cover story, I will not go into detail about these developments here. I would like to highlight the importance, though, of the creation of two new institutions under MCTCP – the Board Secretary Panel and the Directors Panel. The main purpose of the Directors Panel is to build a training and experience exchange platform for APs who are directors and to be a voice for their professional interests.
The ‘governance duo’, namely board secretaries and company directors, are top talents in corporate governance and have long been interdependent advocates of good governance practices in companies. This is one of the reasons that individuals can often switch easily between the two roles. In the future, the Institute hopes these two new institutions under the MCTCP will bring together a wider range of board secretaries and company directors from both Hong Kong and the Mainland to jointly promote the corporate governance profession in the Mainland.
Collaboration on all fronts
Starting in 2011, the Institute has entered into Memoranda of Understanding with the stock exchanges in Shanghai and Shenzhen, the China Association for Public Companies and the Insurance Association of China (IAC), and has maintained close cooperation since then. 10 joint training sessions have been coorganised with the Shanghai Stock Exchange for board secretaries of A+H companies. The training programme this year was held online due to the pandemic from 5–7 August. The Institute has also coorganised six training programmes on corporate governance practices with IAC for governance professionals, such as board secretaries of insurance companies in the Mainland. This year’s joint training programme with IAC was postponed due to the pandemic and will be held in Kunming in December.
Following the establishment of a relationship with the administrative committees of Zhongguancun Science Park and Shanghai Zhang Jiang High Tech Park in 2018, the Institute has built a similar cooperative relationship with Shenzhen’s Nanshan Association for Public Companies in 2019 and the Suzhou Industrial Park Management Committee in 2020. We have our eyes on the Greater Bay Area and are actively exploring the provision of assistance to high-tech companies and new economy enterprises, in particular helping enterprises that intend to go public in Hong Kong to build a good corporate governance framework.
We will work together with relevant parties to provide timely training on listing and corporate governance issues in Hong Kong, cultivating corporate governance talents to facilitate the listing of Mainland high-tech companies and new economy enterprises in Hong Kong. In 2020, we will continue to maintain close contact with these institutions, and explore potential collaboration with relevant government departments and institutions in Zhejiang and Sichuan. The Institute will continue to play to the advantages of a professional institution, and provide support for the development and expansion of Mainland enterprises under the pandemic and the Sino-US trade war.
Looking ahead
Looking ahead, we are presented with both new challenges and opportunities. The implementation of the Mainland’s new Securities Law, the COVID-19 pandemic, complex developments in international politics and new technologies have all created new challenges in corporate governance. Governance work has become increasingly complex, and increasingly important, making the role of corporate governance professionals even more critical. We will continue to participate actively in the development of the Mainland’s capital markets, expand the scope and content of our professional services, and also explore new ways to deliver our CPD training both online and offline. We will provide more professional and high-quality services and support to governance professionals, including our Mainland members, APs, students and board secretaries. As a leader in corporate governance, we will live up to our mission and continue to lead the improvement of corporate governance practices in Hong Kong and the Mainland. We will work together to overcome hard times, improve the level of governance and contribute to the cultivation of more outstanding corporate governance professionals.
Kenneth Jiang FCIS FCS(PE)
Chief Representative, Beijing Representative Office of The Hong Kong Institute of Chartered Secretaries
