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A Key to Sustainability – The Intrinsic Value of Governance Professionals

Becoming a governance professional in Hong Kong is a testament to the seriousness with which corporate governance is viewed. This is exemplified by the esteemed position of The Hong Kong Chartered Governance Institute (HKCGI) as the sole qualifying institution for the internationally recognised Chartered Secretary and Chartered Governance Professional qualifications in the Chinese mainland and Hong Kong. 

HKCGI currently has more than 10,000 members, graduates, and students. Corporate governance professionals, including company secretaries, lawyers, and accounting professionals, are senior governance professionals who serve as trusted advisers to the board and management of organisations, especially those listed on the Hong Kong Stock Exchange. They 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. Company secretaries often have specialised expertise in areas like compliance, risk management, and stakeholder engagement, making them crucial to promoting a solid yet strong governance culture within the organisation.

Robust framework

Hong Kong has a robust corporate governance framework. Environmental, Social, and Governance (ESG) is a key part of it, particularly as it is a global standard for strategic green finance initiatives, and it has also seen a surge in demand for ESG expertise since it first signed the Paris Agreement in 2017. Its Climate Action Plan 2050 affirms its commitment to carbon neutrality, and the Hong Kong Special Administrative Region (HKSAR) Government has committed HK$240 billion (US$31 billion) for climate change mitigation and adaptation over the next 20 years.

The Companies Ordinance (CO) sets out Hong Kong’s corporate governance requirements, and corporate governance provisions are also included in the company’s constitutional documents, which are known as the Hong Kong Articles of Association of Hong Kong companies. The Companies (Model Articles) Notice sets out model form articles that Hong Kong companies may (but are not compelled to) adopt. Companies listed on The Hong Kong Stock Exchange (HKEX) must publish a Corporate Governance Report annually in compliance with HKEX’s Corporate Governance Code.  HKEX listing rules also contain a  

Environmental, Social and Governance (ESG) Reporting Guide (to be renamed ESG Reporting Code in 2025) contains ongoing disclosure requirements, including climate-changed related disclosures, to be reported annually.

Key value creator

David Simmonds FCG HKFCG, President of The Hong Kong Chartered Governance Institute, and Chief Strategy, Sustainability & Governance Officer of CLP Holdings Limited, says governance is a fundamental enabler of value creation of an organisation. “It is about making sure the right people have the right information to make a decision, and to allow them to make the necessary trade-offs, whether short or long-term,” he explains. He adds that it’s also about aligning your various stakeholders around your value and vision to ensure that the right decisions are taken. 

Over the years, the role of a governance professional has evolved considerably. It’s still evolving. Nowadays, it takes a principled approach. In the past, he says, it used to be about a fundamental rules-based approach. He elaborates: “It was about compliance, making sure that the rules were followed, but now it’s now more substantive.” 

That means the focus is on getting to the required outcomes as a board and company.  So, to achieve them – including ESG – there is a much greater focus on a wider set of people than it did in the past. No longer is it just about shareholders and shareholder value; it’s now also about the communities in which a company does its business. Sustainability – ESG – has particularly widened the scope of governance. So, at HKCGI, the talk is about governance and not just about company secretaries. 

Integrating good governance

Good governance is integrated into corporate, sales and marketing strategies. Its importance has therefore widened the recognition of what the governance professional can do to help a company to achieve success. Part of that success is sustainability, but it’s not just about the environment. It’s also about having a business that endures over the long term. That endurance demands good governance as it permits an organisation to step in to have an eye on the issues of the day and on the interests and stakeholders that will impact how the business operates. 

Simmonds adds: “When you look at a power company, as an electric utility, providing something that impacts on people’s daily lives, also impacts on the economy. There are also environmental and reliability issues to consider, and it requires a balance because they are often in contradiction with each other. One of the critical aspects is about regulating relationships amongst conflicting priorities. Sustainability is a critical issue for employees and customers, as well as governments and regulators – particularly with things like climate change and emissions.” 

Governance professionals need to remember, he advises, that they are there to promote the values of the organisation. At least, that’s the guiding principle. With it comes several subsidiary aspects, such as the “courage as being the canary in the coal mine, or whether there are aspects that are not being considered.” So, they need to be determined and patient because governance is an ongoing role; it’s never finished, and so it requires continuing improvement. 

Continuing Professional Development

As part of their ongoing personal improvement, governance professionals need to keep up to speed with existing, changing, and new regulations as well as laws. This creeps into disclosure requirements, such as ESG, which all companies must report on. So, they need to widen their own knowledge and skill sets to add value to the organisation’s corporate governance framework. “Ultimately, it’s about long-term value creation, so we should be looking at how we can add value to the organisation and not just at how the regulations are applied,” he says. 

To obtain the right competencies, Simmonds recommends being a member of HKCGI. He claims that it’s the best qualification, as membership of HKCGI is one of the requirements for being a named company secretary for companies listed in Hong Kong. “To get membership, you must pass a series of exams (and fulfil other relevant requirements), and once you have that membership, it’s recognised by regulators, such as the Hong Kong Stock Exchange,” he explains. 

He adds: “There are a number of other regulators that recognise members of HKCGI as being suitable certifiers for various instruments. Membership of the Institute is an important ticket to do a number of governance roles in Hong Kong. After obtaining the membership, members are required to have Continuing Professional Development (CPD) training. They must have at least 15 hours of CPD training each year, so those skills and competencies are maintained throughout an individual’s membership.” 

Fundamental role

Over the last 75 years, HKCGI has played a critical role in qualifying and training a large cohort of governance professionals. They provide the skills for the financial Chacko of Hong Kong. As well as training governance professionals, HKCGI also lobbies government and regulators to ensure good governance and for the evolution of standards – including market practices development, and to assist through our membership and our education programmes. HKCGI supports its members through these initiatives, which are based on corporate governance topics, the development of the governance standard in Hong Kong, and it’s also based on the reputation that the Institute has created – offering what Simmonds considers to be a powerful endorsement of its members when they are looking for governance jobs. 

Strong prospects

With the backing of HKCGI, the career prospects of governance professionals are very strong. One such member and governance professional is Emily Ng ACG HKACG, who became a member of 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 participates in promoting sustainability and corporate governance.

Ng was the Senior Investor Relations Manager of the company and came second place in Rising Star from the IR Magazine in 2017 as well as third place in Best IR Professional-Sell Side from the Institutional Investor in 2019. Prior to 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 the field of Sustainability Leadership and Governance at the University of Hong Kong.

The Hong Kong Chartered Governance Institute is keen to support sustainability, and ESG more generally. It has, therefore, launched the ESG Reporting Certification course, which has been well-received by the market and widely subscribed to. Simmonds is also planning to launch a Sustainability Governance Academy this year, focused on ongoing learning and ongoing networking. He sees it as a critical aspect of the development of competencies and capabilities in the Hong Kong market as it will develop a community of likeminded individuals with CPD in mind. Prospects are, therefore, positive with the support, thought leadership, and backing of the Institute. 

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