Can we start by discussing the issues addressed at the strategy review meeting held by the Institute’s Council earlier this year?

‘Certainly. As you know, in recent years we have been shifting the focus of our branding to reflect fundamental changes in the governance arena. One of those changes has been the broadening scope of issues that come across the governance professional’s desk – particularly around themes of sustainability and risk management. Recognising that, we launched our ESG Reporting Certification Course last year and over 1,400 people have already graduated from the course – reflecting the timeliness of this initiative and the leadership position of the Institute in this area.

One of the major initiatives coming out of our strategy review was to build on that momentum by creating the Sustainability Governance Academy within the Institute. This is about how we evolve and what the Institute does to reflect the broadening role of governance professionals. Sustainability is a pivotal aspect of that, particularly in light of the moves to implement the reporting standards of the International Sustainability Standards Board (ISSB) in Hong Kong. In this context, the Institute has a key role to play in developing the capability of the market. We can fulfil that role – as we have been doing so successfully over the last 75 years – by advocating for the sort of change that will be required and by providing the professional education and training required. People who have gone through our ESG Reporting Certification Course and/or have joined the Sustainability Governance Academy will have the Institute’s stamp of quality that employers can depend on.

The Academy is also, just as importantly from my perspective, about providing a home for sustainability professionals. It provides a platform for networking opportunities, advocacy and knowledge sharing about the challenges and potential solutions to issues that have come up as we go about putting the ISSB standards into effect. This will be a work in progress for many years, given the timeframe for the establishment of the ISSB standards.

As you know, the ISSB started with climate, but will be turning to other topics in sustainability. The climate standards themselves have been designed to apply initially to large listed companies and to progressively be implemented by the rest of the business world. So having a platform that provides ongoing continuous learning opportunities for people working in sustainability is going to be critical in the years ahead and the Institute will be a key enabler of that.’

The Institute’s ESG Reporting Certification Course has attracted many participants from beyond the Institute’s membership base – do you think the Academy will similarly have a wider appeal for non-members working in sustainability?

‘Absolutely – and that was another theme of our strategy review. The Institute has been cultivating more relationships than those pertaining only to membership. Full membership of the Institute provides the privilege of being qualified to be a company secretary of a listed company, but not everyone is seeking that privilege and many of the people in our network do not necessarily aspire to be full members. This is about providing different avenues for professional development, association and connection – all those things that the Institute does so well – in areas that go beyond the traditional corporate secretarial and corporate governance roles of the company secretary.

So the Academy is one of the ways our Institute is adapting to the much more extensive set of issues that governance now entails and that companies have to address. Another way is to provide some level of intermediate certification of company secretary essentials.

We’re still debating exactly what this will look like, but again it’s about recognising that not everyone has the aspiration to qualify in all of the subjects required to be become a member of the Institute with a view to becoming a listed company secretary. People may wish to focus on particular components of the coursework and we are looking at providing recognition of core groupings of subjects as an intermediate qualification or certification.

Council member Kenny Luo FCG HKFCG(PE) used a very expressive metaphor for this. He suggested that, while those seeking full membership are intent on climbing the mountain to get the spectacular view from the lodge at the top, there are other viewpoints at other levels on the mountain that will be equally appealing to other people.’

Did the strategy review meeting also address the challenges faced by students and younger members of the Institute?

‘Yes, and addressing the downturn in student numbers was certainly on our agenda at the meeting. We recognise that the coursework to complete all of the modules in the Institute’s professional qualification examinations is not easy and we discussed ways to provide more examination support for students as they go through that process. There is already quite some effort going into developing examination technique workshops and we want to make those as widely available as we can for students, not only in Hong Kong but also in the Chinese mainland.

In addition, we’re looking at removing obstacles to completing the assessments where we reasonably can, but we have to be realistic about the bigger picture here. Historically, Hong Kong has long been a one-way bet in terms of its additional listings of companies and very considerable growth rates in roles for governance professionals. That created a consistent demand for students to attain our qualifications, but as the market matures and the pace of growth in the Chinese mainland slows, together with the complications in the expanded geopolitical environment, there’s likely to be – for a period of time at least – less of that demand drawing students in.

On the other hand, there’s more choice for people who are interested in getting involved in our profession. Sustainability, for example, is clearly a topic that prospective students are taking a keen interest in, as are themes around adapting to emerging technologies. So having a mindset that we should only be appealing to students who want to follow a traditional career path in governance would not serve us – or our students – well into the future.’

There has been greater inclusiveness of younger members’ perspectives in this journal – for example the NextGen Governance column we have been running this year. Do you think this refocusing towards the views of younger members will help boost the attractiveness of joining the profession among younger generations?

‘Up until last year, I was the Chair of the Membership Committee and the NextGen initiative was one of the ideas coming out of that committee. I think giving a greater platform to younger members of the profession will certainly help with maximising the attractiveness of the profession for the students of tomorrow, but it will also significantly help the profession stay relevant. Younger members of the profession can see things differently from those who have been in the profession for quite some time, and it’s not always obvious to the more senior people what the challenges and obstacles are to progression. The potential career paths are less linear than they were in the past, so we can learn a lot from listening to the concerns of younger members about the challenges they’re dealing with and how they might be addressed.’

Is this particularly relevant when it comes to technology-related challenges?

‘Yes, and I’m sure technology governance issues will be rising up the agenda in the years ahead. Cybersecurity creates unique governance challenges and all organisations have to come to terms with how they effectively organise and govern themselves to be as resilient to cybersecurity threats as possible. Moreover, it’s highly likely that, in order to be competitive, companies will need to move to widespread adoption of artificial intelligence (AI) tools and this raises a host of challenges from a governance standpoint.

In terms of students’ perspectives on where they should focus their career, I think it’s very sensible for them to be thinking about how the adoption of AI might provide them with opportunities and how it might change workplaces going forward.’

Where do you think all of this is leading and what sort of role will governance professionals have in, say, 20 years’ time?

‘Technology is already making the traditional company secretarial and compliance-type functions a lot more efficient, and this is likely to reduce the need for as many people in that area of work. To give just one example, trawling through a recording of a meeting and preparing the minutes can be quite a time-consuming task, but there are already many tools that can produce a set of minutes and identify the key actions that came out of a meeting. These tools are not going to replace the human in the loop – it is vital to have a company secretary looking at the minutes and ensuring that they are accurate and appropriate – but they will reduce the time involved in getting to that point very appreciably.

On the opportunity side, there will be a huge need for people to get clear on what’s in those AI tools and how they should be managed. The decision-making around the use of technology, in particular in terms of complying with the relevant regulatory requirements and the ethical judgements that need to be made, is a developing area of governance. I see AI as a kind of cognitive prosthetic – it can help make things faster and better, and should ideally improve decision-making. Governance professionals will be increasingly called upon to oversee the application of AI tools to improve the decision-making process.’

Nevertheless, there have already been attempts to automate governance – I am thinking here of the governance frameworks of decentralised autonomous organisations. Is there a danger that AI and blockchain could succeed in removing the need for intermediaries such as lawyers, accountants and company secretaries?

‘There is no doubt that AI is an efficiency tool, so for a lot of those kinds of roles, less people will be required. On the other hand, governance in its more comprehensive form is about how you regulate relationships between people, and how you make trade-offs and judgements around the impact that you’re having as an organisation. You can’t outsource those sorts of things to AI, so, while you may need fewer lawyers, accountants and company secretaries, you will need more people elsewhere in governance who can oversee the tools that are being used, make sure that usage is appropriate and be confident about the outputs that are coming from it.

These tools require oversight by professionals who know about the issues relevant to governance, so some jobs will be reduced and new ones will be created. The message I would have for the CGj readership is that this scenario has actually been around from day one in our profession – we have always had to stay alert to changes of this type, and to assess how we can stay relevant and add value. Undoubtedly, in my view, even in a world with a significant adoption of AI, there is still going to be a crucial role for governance professionals.’

Were there any other issues addressed at the strategy review meeting that you can share with CGj readers?

‘Another issue that we grappled with, and are still grappling with, is the role and position of the Institute in the Chinese mainland. Here too we need to adapt to the changes in the market, such as the fewer new listings in Hong Kong, as well as the growing level of competence and sophistication in the Chinese mainland regulatory and professional environment as it relates to governance. I believe there is an enduring role for us in the mainland governance ecosystem, but to achieve it we need to build our own capabilities along with the connections and relationships we have there.’

Differences exist between international governance mechanisms and practices and those followed in the Chinese mainland – is this a problem for the Institute in terms of its training and advocacy work?

‘I see the Institute’s role in the mainland and the broader China ecosystem as being similar to Hong Kong’s role as a gateway – we provide a valuable connection with the world outside China. International investors require a certain level of corporate governance and a certain level of reporting, and we are a conduit for market competence and greater confidence in that space. We act as a bridge to the outside world, helping Chinese companies to adopt the latest standards, as well as best practices in governance and reporting, and that will be invaluable for any business wanting to attract foreign capital.’

Has the shift away from multilateralism and the intensification of geopolitical conflicts we have seen over the last decade made that mission harder to achieve?

‘The trend towards deglobalisation can be overstated – global developments in sustainability are a good example of the opposite trend. Look at the encouraging direction of travel that we’re having with the ISSB standards, which have been adopted by Hong Kong, the Chinese mainland, Europe and in large part by the US.

It is possible, of course, for there to be some regional variations that are appropriate to the local context. Europe and Hong Kong have opted to mandate Scope 3 reporting, for example, whereas the US has not gone down that route. That reflects the different economic drivers at play, with Asia largely being the home of European Scope 3 emissions, so it is absolutely appropriate that that level of reporting happens here. The bigger point, though, is that – these local variations aside – you’ve basically got uniform application of ISSB in most parts of the global economy now, which cuts against that deglobalisation trend.’

What advice would you give to a new recruit to the profession?

‘I get asked this question a lot and not just in terms of the profession. Generally, I think former US President Barack Obama gave the best advice on this – he suggested that we should always look for ways to make ourselves useful. So my advice would be to look for how you can add value and bear in mind that that will change over time. Don’t lock yourself into something that is static because the world moves on and if you focus on looking for how you can add value and be useful, you will be able to move ahead with the times.’