AS British company directors were awaiting the expected call by the Greenbury committee for greater controls on boardroom pay yesterday, Hong Kong appeared to be moving towards its own strategy for surrounding directors salaries with more rules.
The news that the Stock Exchange of Hong Kong was about to examine in more depth the possibility of establishing remuneration committees will come as no surprise.
Ever since telephone number bonuses and salaries were collected by some directors of companies whose profits appeared to do nothing to justify the level of pay-outs, there has been a rumbling of discontent with muttered calls that 'something must be done'.
But wrapping the regulators up in chains of rules is often counter-productive. Much better to have flexible, non-statutory rules, and a body with teeth enough to apply them - but only if the results stand up to scrutiny, and Hong Kong continues to raise its international reputation.
This was the call made yesterday by exchange chairman Edgar Cheng, but he was right to warn that the territory lacks some of the checks and balances seen in other parts, where shareholders are more militant, and institutions ready to leap to their own defence when upset by boardroom antics.
The price of our financial freedom is eternal vigilance. As a centre for China's fund-raising requirements, Hong Kong should remain paramount, but it will do so only if international institutions are comfortable that the rules in place will protect them and those for whom they invest.