Sustainability and social responsibility recognised at HKICPA’s Best Corporate Governance Awards 2019

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The Hong Kong Institute of Certified Public Accountants (HKICPA) Best Corporate Governance Awards 2019 recognised a record 26 listed companies and organisations for their commitment to the highest corporate governance standards and the increasing quality of sustainability in Hong Kong.

“The different categories of 26 awards are witnesses of many corporates striving very hard to achieve excellence in corporate governance,” James Lau, Hong Kong’s Secretary for Financial Services and the Treasury, the officiating guest, said in his opening address at the ceremony.

“We are here not only to congratulate the winning companies, but also we do recognise the efforts and commitments of all participants.”

Patrick Law, the chair of the judging panel, said: “The Institute’s Awards have tracked the development of corporate governance from its humble beginnings to its place in the mainstream of corporate affairs.

“We hope that they have played some small part in hastening this development, by holding up a mirror to the current standards in the local market, and also as a catalyst to stimulate further progressive changes.”

He said the HKICPA remained as committed as ever to promoting and supporting good governance, making sure that Hong Kong stays firmly aligned with evolving international best practices.

Commenting on the overall performance, Loren Tang, chairman of the Awards organising committee, said that the judges were encouraged to be able to identify more Sustainability and Social Responsibility (SSR) awardees.

“While the awardees were generally companies with a relatively large market capitalisation, which would tend to have more resources at their disposal, there was a diverse range of candidates reaching the final stages of the review process,” she said. “This bodes well for the future.”

Patrick Rozario, chairman of the Awards’ review panel, said most companies had made substantial improvements in risk management and internal audit.

They were willing to disclose how they performed risk assessment and analysis, but there was still room for improvement, he said.

The Awards judges’ recommendations to companies include providing more information on the likelihood that certain risks will occur, presenting more detailed disclosures relating to the review of internal controls, making directors’ pay packages more transparent, having board succession planning in place and providing clearer board diversity policies and targets.

“For smaller companies, which cannot afford as many resources as [their] larger counterparts, they are recommended to seek external advice from a more diverse board when it comes to formalising corporate governance procedures,” Rozario said.

The judges were pleased to see a number of “firsts” this year.

For example, the Construction Industry Council (CIC) was the first winner of the Self-nomination Award.

The construction industry body made reference to various codes and guidelines in developing its corporate governance framework, including Corporate Governance for Public Bodies – A Basic Framework, issued by the HKICPA.

An audit committee was also established in 2018 to oversee the implementation of corporate governance framework, review the work of the internal audit department, in addition to overseeing financial reporting, risk management and compliance, and the external audit process, Albert Cheng, executive director of the CIC, said.

The Drainage Services Department was the first government department to be recognised in the public sector/not-for-profit (large) category, which was also in the SSR category.

It has published an impressive sustainability report, including an online version, complete with detailed information and various illustrations to enhance the presentation.

“As a government department, we believe transparency in what we do and how well we do it is very important, including not only our objectives, performance of our environmental, social and routine services, but also key data and statistics,” Mak Ka-wai, deputy director of Drainage Services, said.

“In doing so, we encourage our staff to disclose statistics [in] as [much] detail as possible, preferably in the format of machine-readable data, to support the government’s smart city initiatives.”

Swire Properties, another SSR award winner in the non-Hang Seng Index (large market cap) category, showed that its sustainability vision, called SD 2030 Strategy, is an integral part of its long-term corporate strategy.

The company aims to become the leading sustainable development performer in its industry globally by 2030.

Fanny Lung, finance director of Swire Properties, said: “We have established over 80 clear KPIs [key performance indicators] for our strategic pillars under the SD 2030 Strategy with clear action plans overseen and executed by their corresponding working groups.

“We have raised US$500 million from a green bond issuance to finance our new or existing green projects. We also require employees to include sustainability in their personal development plan each year.”

Having won one of the HKICPA’s awards for 20 years in a row, CLP Holdings – this year’s Platinum Award recipient – was once again recognised for its leadership, consistency and excellence in corporate governance in terms of its practices and disclosures.

“Now more than ever, trust in business is critical,” David Simmonds, CLP Holdings’ group general counsel, company secretary and chief administrative officer, said.

“People want to invest in companies that they trust and believe in. Being transparent in our reporting and disclosure is a good way to ensure that we keep on maintaining the trust of our stakeholders.”

To cope with regulatory changes, CLP Holdings had worked hard to constantly stay ahead of the curve by anticipating regulatory dynamics and making reasonable efforts to meet or even exceed compliance requirements, he said.

A full list of the winners of Best Corporate Governance Awards 2019: