Corporate governance - an investment well worth making

The lead-in-water crisis dominated the media headlines for quite some time. In mid-July, excessive lead was found in the tap water of numerous public and private housing estates, throwing hundreds of residents' lives into chaos. Furious and innocent residents yelled for justice.

A special task force was set up by the government to investigate and so far no conclusion has been made. Until today, the terror-triggered tap water tests are still being carried out in various types of properties, and the number of confirmed cases keeps increasing.

According to Chief Executive Leung Chun-ying, lead-containing substances binding joints in water pipes and banned soldering material were most likely to blame for the water scare. But who should take the blame?

While the relevant government department and contractors all had reasons for not being mainly responsible for the incident, some intuitive and important questions cannot be ignored.

For example, is the stated standard for materials to be used for water pipes adhered to? How was it monitored in the operation? Are the responsibilities of the involved parties clearly identified in the contract? Is there any proper mechanism to ensure compliance and quality? Is there any regular review to evaluate the efficiency and effectiveness of the prevailing system for contracting and sub-contracting? Where are the loopholes, in paper and in operation, if any?

While ill-management or ineffective supervision is commonly used to describe the tainted-water incident, the above questions are basically issues of governance, which is about the establishment of policies and continuous monitoring of their proper implementation by the members of the governing body of an organisation.