Few firms good enough for top governance prize

Companies must improve corporate governance, awards group says, as just two win top honour

PUBLISHED : Friday, 23 November, 2012, 12:00am
UPDATED : Friday, 23 November, 2012, 1:40am

No company or organisation was good enough to win the highest prize in three of five categories of the corporate governance disclosure awards this year, the awards organiser, the Hong Kong Institute of Certified Public Accountants, said.

Like last year, only two diamond awards, the top prize, were given. These two years saw the lowest number of top awards in its 13-year history, institute president Keith Pogson said.

The largest number of diamond awards ever given in one year was four, said Pogson.

For this year's awards, the judges reviewed 240 annual reports of listed companies and public institutions.

"The judges noted that many Hong Kong-listed companies and not-for-profit organisations still have more to do to benchmark their corporate governance practices and disclosures to the highest standards," the institute said.

In the Hang Seng Index category, CLP won the diamond award, followed by the second-best platinum award given to Hong Kong Exchanges and Clearing. The third-best gold award went to the MTR Corp.

Prudential won the diamond award in the non-Hang Seng Index with large market capitalisation above HK$6 billion, while the Link Real Estate Investment Trust won the platinum award and Hysan Development took the gold.

No diamond award was given in the category for the non-Hang Seng Index of mid to small market capitalisation, the category for H-share companies and other mainland firms, and the public sector category.

"We hoped to see improving standards of corporate governance in the public sector. While there were one or two organisations knocking on the door, they still fell short of the standard required for recognition," said Susanna Chiu, a vice-president of the institute.

Pogson said more work needed to be done.

"There can be more transparency in how directors are appointed in the public and private sector," he said.

"More needs to be said on internal controls. High priority should be given by companies to their CSR [corporate social responsibility] reporting.

"More information should be provided on related-party transactions. This is particularly true of mid-cap and family-controlled companies."