Accountants put companies under the microscope
The Hong Kong Institute of Certified Public Accountants will test how well companies have followed new listing rules and code of best practices in its sixth annual corporate governance competition.
Entries opened yesterday for the Best Corporate Governance Disclosure Awards, which examine annual reports of companies for the year to or before March.
The companies are divided into categories of Hang Seng Index companies, non-Hang Seng main-board firms, Growth Enterprise Market-listed concerns and the public sector.
'This year's awards will give a good indicator of whether local listed companies have followed the new listing rules and new corporate governance regime,' said Chew Fook Aun, chairman of the institute's corporate governance committee. 'We will also pay attention to the performance of the public sector and non-profit making companies because public interest is important.'
He said many listed companies had improved their corporate governance and disclosure standards in recent years, with evidence that many had set up remuneration committees and disclosed the payments of their directors. These practices were rare six years ago.
Jim Wardell, chairman of the organising committee of this year's awards, said corporate social responsibilities would be another key element assessed.
'We will also take into account the corporate responsibilities of companies as that is what the public increasingly demands in this aspect,' he said.
Mr Wardell said companies once mainly focused on profits. Now, the public and shareholders want companies to embrace good disclosure, high corporate governance and social responsibility.
Many large companies in Hong Kong helped charities but Mr Wardell said there were other social aspects to consider.
'The public now demands more than that. They would like to see companies have environment protection policies, equal treatment for their staff and give sufficient training for their employees,' he said.
Institute president Edward Chow Kwong-fai said corporate governance was important to maintain international investor confidence.
'We need to ensure Hong Kong remains the market of choice for good-quality enterprises and that the international investing community continues to have confidence in our regulation standards and corporate governance practices and disclosure,' Mr Chow said.
He said the institute would back the government's proposal to split the role of the Securities and Futures Commission chairman into a non-executive chairman and chief executive to match international trends.
The competition, which last year drew 155 entries, closes on August 20. The result will be announced in November.
