Many of the companies taking part in this year's Best Annual Report Awards programme have demonstrated a clear understanding of good corporate governance practices. The HKMA adjudicating panel says openness, integrity and accountability - the principles of good governance - are the foundations on which effective organisations are built. Panel chairman Howard Gorges says corporations with a sound governance infrastructure may be able to enjoy strong returns and solidify their reputation as valued members of society. CLP Holdings, winner of this year's HKMA Best Annual Report Award, is the first company in Hong Kong to voluntarily disclose executive compensation packages in its annual report. The CLP report lists executive pay, allowances, bonuses and pension contributions. HSBC corporation secretary Mike Scales says HSBC's annual report is a primary communication tool, designed to be open and transparent. HSBC prints about 22,000 English copies of the report, including 4,000 in Chinese translation, for worldwide distribution. Shareholders can also read the report via the internet. The 300-page report, which received the HKMA Gold award, uses themes that go beyond regulatory compliance and explain a wide range of business activities. Swire Pacific group finance director Martin Cubbon says a series of financial scandals in the United States that resulted in the collapse of Enron, Tyco and WorldCom, has heightened awareness of the need for good corporate governance. He believes that following the principles of good corporate governance has resulted in better annual reports. The downside is a raft of complicated facts and financial data that the average reader may find hard to understand. Mr Cubbon says that in their effort to ensure consistency with recognised accounting practices, many companies produce reports that are challenging to understand and interpret. To avoid this problem, Swire Pacific explains in layman's terms the company's business activities and strategies. 'The first three or four pages and the chairman's report contain all the relevant information about our business activities, and a review of what is essentially a diverse and complicated business,' he says. For the first time, the report includes a credit review that the company normally sends to a rating agency that outlines debt in Swire's associate companies. Mr Cubbon says Swire Pacific's annual report, which shared the silver award with the MTR Corp (MTRC), took seven months to prepare and involved every section of the company's worldwide operations. To illustrate the diversity of Swire Pacific businesses, the cover of the report combines photographs of people enjoying the company's services. The scale of Swire operations is suggested on the cover with a scattering of statistics, such as the annual sale of 370 million unit cases of Coca-Cola, the ownership of 82 vessels, the management of 11.8 million square feet of property and the serving of 12 million passengers. MTRC finance director Lincoln Leong Kwok-kuen says readership of the MTRC annual report is highly diversified and deserves a high level of disclosure. 'The whole issue of disclosure and transparency is critical to the MTRC. Our goal is to provide all of our stakeholders, which include shareholders, environmental groups and the travelling public, with timely and accurate information,' Mr Leong says. He adds that the MTRC report goes beyond regulatory compliance. The MTRC has published a long version and a condensed version of its report. 'We have tried to move away from technical speak to convey our message clearly,' Mr Leong says.