A Key to Sustainability – The Intrinsic Value of Governance Professionals
In Hong Kong and the Chinese mainland, individuals holding the dual Chartered Secretary and Chartered Governance Professional qualifications conferred by The Hong Kong Chartered Governance Institute (HKCGI) are commonly known as 'governance professionals'.
HKCGI is the sole qualifying institution for governance professionals, offering internationally recognised qualifications transferable to other divisions under The Chartered Governance Institute (CGI). HKCGI currently has over 10,000 members, graduates, and students. David Simmonds FCG HKFCG, President of HKCGI, is also the Chief Strategy, Sustainability & Governance Officer of CLP Holdings.
In Hong Kong, governance professionals are qualified to serve as company secretaries for listed issuers alongside lawyers and accountants. They are part of senior management in listed companies and hold leadership positions in various sectors, including the trust and company service provider sector, which the HKSAR Government recognised in their Hong Kong anti-money laundering risk assessment submitted to the Financial Action Task Force in Geneva.
Governance professionals are responsible for upholding the highest standards of corporate governance, developing effective policies and procedures, and facilitating communication and decision-making at the board level. With their compliance, risk management, and stakeholder engagement expertise, governance professionals are crucial in fostering a strong organisational governance culture.
Driving Sustainability
Governance professionals drive not only corporate excellence but also sustainability. In Hong Kong, they play a crucial role in managing communication, disclosure, and reporting within a robust corporate governance framework. These include environmental, social and governance (ESG) and other sustainability-related disclosures required for strategic green finance initiatives.
Since Hong Kong signed the Paris Agreement in 2017, there has been a surge in demand for ESG expertise. The Climate Action Plan 2050 affirms Hong Kong's commitment to carbon neutrality, with the Hong Kong Special Administrative Region (HKSAR) Government committing HK$240 billion (US$31 billion) for climate change mitigation and adaptation over the next 20 years.
Locally, the Companies Ordinance (CO) mandates a directors' report that includes sustainability-related elements. Companies listed on The Hong Kong Stock Exchange (HKEX) must publish an ESG report annually under the ESG Reporting Guide, to be renamed the ESG Reporting Code in 2025. This guide requires ongoing disclosures, including climate-related information.
Key value creator
David Simmonds explained that today's governance professionals are pivotal in managing and reporting on sustainability, including ESG factors. Their disclosure work is crucial for addressing a broad range of stakeholder concerns beyond just shareholders, with an emphasis now including the communities in which a company operates. That is, the focus extends beyond company secretarial functions to encompass all aspects of governance, underscoring the growing importance of their role in driving comprehensive governance practices.
David emphasised that governance, which governance professionals help implement, is fundamental to an organisation's value creation. "It's about ensuring the right people have the right information to make decisions and facilitating necessary trade-offs, short-term or long-term," he noted. He also highlighted the importance of aligning stakeholders with the organisation's values and vision to make informed decisions. The role of governance professionals has evolved significantly over the years and continues to do so. Traditionally focused on compliance with a rules-based approach, it now demands a more principled and substantive approach. "It was once about ensuring rules were followed; now it's about achieving meaningful outcomes," David elaborated.
The wider implications
The work of governance professionals has far-reaching implications. David notes, "In the case of a power company or electric utility, the services provided affect people's daily lives and the economy. Environmental and reliability issues are also considered, as they often conflict. Balancing these priorities is crucial. Sustainability is a key concern for employees, customers, governments, and regulators, especially regarding climate change and emissions."
Thus, good governance must be integrated into corporate, sales, and marketing strategies, underscoring the expanding role of governance professionals in ensuring a company's success. This success hinges not only on environmental sustainability but also on long-term business endurance. Effective governance allows an organisation to stay attuned to contemporary issues and the interests of various stakeholders, thereby influencing its operations.
David advises that governance professionals must uphold the organisation's values. This principle includes the "courage to act as the canary in the coal mine," identifying overlooked issues. Governance is an ongoing responsibility that requires persistence and continuous improvement.
HKCGI Sustainability Governance Academy
HKCGI, with its commitment to supporting ESG and sustainability, has launched the ESG Reporting Certification Course, which has been well-received and widely subscribed to. Open to members and non-members, the Course has seen four cohorts with over 1,400 graduates.
HKCGI plans to launch the HKCGI Sustainability Governance Academy on 31 July at the HKEX Connect Hall, with representatives from the Securities and Futures Commission and HKEX in attendance. The Academy will be a hub for accredited ESG Reporting specialists as 'HKCGI Sustainability Professionals' for ongoing learning, networking, and building a sustainability powerhouse.
This initiative is crucial for developing competencies and capabilities in the Hong Kong market, fostering a community of like-minded professionals committed to continuous professional development. With strong support, thought leadership, and backing from the Institute, the prospects for the Academy are promising.
Becoming Governance Professionals
David recommends taking the 5th Cohort of the ESG Reporting Certification Course when it is launched on 1 August and eventually becoming part of the Academy, then seeking membership with HKCGI to gain the necessary governance competencies. He reiterates that membership is a key qualification for being a named company secretary for listed companies in Hong Kong and other senior management and compliance positions. To become a member, individuals must pass exams and meet other relevant requirements, so as to gain recognition from regulators such as HKEX. There is a fast track for accountants and lawyers like David. Becoming a governance professional is increasingly seen as added value as governance takes centre stage. "Other regulators also recognise HKCGI members as qualified certifiers for various instruments," he adds.
Governance professionals must also stay current with evolving regulations and laws. This ongoing commitment to personal development ensures they can effectively contribute to the organisation's corporate governance framework. David emphasises, "Ultimately, it's about long-term value creation. We should focus on adding value to the organisation, not just on regulatory compliance." Members must complete at least 15 hours of training annually to maintain their skills and competencies, ensuring their expertise remains up-to-date.
Strong prospects
With the support of HKCGI, the career prospects of governance professionals are very strong. One such member and governance professional is Emily Ng ACG HKACG, who joined HKCGI in 2018. She joined ANTA Sports Products Limited in 2014 and is the Senior ESG Manager of the company. She is responsible for ESG disclosures and strategy within the company and actively promotes sustainability and corporate governance.
Ng was the senior investor relations manager of the company, coming second in Rising Star from the IR Magazine in 2017 and third in Best IR Professional-Sell Side from the Institutional Investor in 2019. Before joining ANTA Sports, she had two years of work experience in the banking and finance industry. She also pursued a Master of Social Sciences degree in Sustainability Leadership and Governance at the University of Hong Kong.
Final Thoughts
HKCGI has been established in Hong Kong for over 75 years, playing a key role in qualifying and training governance professionals. The 5th Cohort of its ESG Reporting Certification Course will be open for registration on 1 August which will be a great career enhancement opportunity. In addition to training governance professionals, HKCGI also lobbies the government and regulators to ensure good governance and the evolution of standards, including market practice development. HKCGI supports its members through initiatives based on corporate governance, the development of the governance standard in Hong Kong, and the reputation it has created – offering what David considers to be a powerful endorsement of its members when they are looking for governance jobs.
