Hong Kong still lags behind in some areas of corporate governance, report finds
- Hong Kong, alongside Singapore, ranks No 2 for corporate governance in Asia, report finds
- City’s corporate sector shown ‘limited willingness’ to make governance changes
Hong Kong needs to make further corporate governance improvements as the city and other financial centres in Asia continue to lag behind on some governance best practices, according to a new report by the Asian Corporate Governance Association (ACGA).
The city ranked second, alongside Singapore, in the long-running CG Watch 2020 study by the ACGA and securities firm CLSA on 12 markets in Asia, but continues to lag behind on whistle-blowing and anti-corruption enforcement. Australia ranked No 1 in the report, while mainland China was 10th in this year’s ranking.
“Hong Kong is at its most determined when addressing regulatory and enforcement issues, but loses its nerve when it comes to driving fundamental improvements in company governance,” Jamie Allen, the ACGA’s secretary general, and Jane Moir, the group’s research director, said in the report. “Issuers are treated with kid gloves, especially when it comes to amending the [corporate governance] CG Code.”
The report, titled “Future Promise: Aligning governance and ESG in Asia”, was published alongside a separate report by CLSA examining corporate governance and environmental, social and governance (ESG) standards by sector in Asia. ACGA is an independent non-profit organisation focused on corporate governance, which counts pension funds, financial institutions and accounting firms among its members.
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Material and capital goods, technology and health care and pharmaceuticals were the best performing sectors for governance and ESG efforts, according to CLSA’s findings.