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HKICPA lauds corporate governance high performers and urges small caps to leverage CG to support long-term growth

29 November 2017

[Hong Kong, 29 November 2017] Results from the Best Corporate Governance Awards showed that leading listed companies have not only met but excelled beyond the recently upgraded Environmental, Social and Governance Reporting Guide and the revised Corporate Governance Code, setting benchmarks that are conducive to investor interests, according to the Hong Kong Institute of Certified Public Accountants (HKICPA).

 

"It is most pleasing that these best performers see the benefits of a strong corporate governance regime to the long-term success and sustainability of the company," said Ms. Mabel Chan, President of HKICPA and Chairman of the Judging Panel.

 

This year, the Institute examined the corporate governance and sustainability disclosure and practices contained in more than 700 reports from listed companies and public organizations. A total of twenty awards have been given out by the judges, three more awards than last year.

 

"This year there were some new winners, including Swire Properties and Hang Lung Properties; and we are glad to see CLP who is a repeat winner, as well as Li & Fung and China Telecom who are returning winners back after lengthy absences from the Awards, reflecting the fact that they see the value in continuing to improve their corporate governance," Ms. Chan said.

 

Mr. Derek Broadley, Chairman of the Awards Organizing Committee, said that it is positive to note that, this year, there are altogether five winners of commendations across three categories, namely: i) Internal Control and Risk Management ii) Board and  Audit  Committee  Operation  and  Functioning,  and  iii)  Website  Corporate Governance Information.

 

Significantly, it is the first time any companies won commendations in the categories of "internal control and risk management" and "board and audit committee operation and functioning"  since  commendations  were  established  last  year  to  encourage  and acknowledge  performance  in  specific  areas  of  corporate governance.  Also,  three commendations are given for "website corporate governance information", reflecting the  increasing  importance  listed  and  public  entities  attach  to  online  information channels.

 

"The general quality of reporting in relation to risk management and internal control has improved markedly in recent years with more companies exceeding the minimum requirements." said Mr. Patrick Rozario, Chairman of the Awards Review Panel.

 

"The best performers categorize and analyze the principal types of risk that they face, describe their control and mitigation measures to address these risks, and also indicate whether the identified risks have increased, decreased or remained the same during the year. This helps investors understand better the nature and patterns of emerging risks."

 

Areas of improvement

 

However, judges were not able to identify any companies in the Non-HSI (Small market Capitalisation) Category that merit an award. Improvement in areas such as greater representation of INEDs on the board, more substantial disclosures on board and audit committee meetings, information on the whistleblowing arrangement is required by these companies.

 

Mr. Rozario said although small cap companies are less resourceful, it is in their best interest to pursue good corporate governance.

 

"While they are generally meeting the basic requirements, small cap companies are often growth companies which will benefit if they start improving corporate governance practices and build up a good reputation with a view to attracting investors and reducing their cost of funds as they grow," he said.

 

Most listed companies in Hong Kong could still find areas for improvement, including information on succession planning – particularly in family-controlled businesses; better explanations for appointments and resignations of directors; disclosure of senior management remuneration packages; linkages between executive pay and key performance indicators; board and director evaluations; and more information on board diversity.

 

Public sector organizations also need to enhance the transparency of the process and criteria for selection and appointment of directors, including executive directors and independent non-executive directors; provide more details on the work done by the board and committees, including the significant matters considered and the corresponding actions taken to address the key issues; as well as additional information on whistleblowing policies.

 

List of Awardee

 

Judges' report

 

 

香港會計師公會嘉許具卓越企業管治的機構

鼓勵小市值公司藉良好企業管治推動長遠發展

 

 

(香港,二零一七年十一月二十九日)香港會計師公會公佈「最佳企業管治大獎2017」得獎名單。評審結果反映表現卓越的上市公司,不僅達到近期提升的《環境、社會及管治報告指引》及新修訂的《企業管治守則》所列要求,更展現了保障投資者利益的新標準。

 

香港會計師公會會長暨評審團主席陳美寶女士表示:「我們十分高興獲獎企業明白到優良企業管治制度,可以為企業長遠成功及可持續發展帶來益處。」

 

今年公會審閱了逾700 份上市公司及公營機構有關企業管治和可持續發展的披露及實務。評審團共甄選出 20 個獎項得獎者,頒獎數目較上屆多三個。

 

陳女士續說:「今年我們喜見得獎者中有首次獲獎的企業,包括太古地產及恒隆地產,屢獲表揚的中電控股再下一城,而多年前曾獲獎的利豐及中國電信再次榜上有名。由此可見這些企業對持斷提升企業管治水平十分重視。」

 

大獎籌委會主席Derek Broadley先生稱:「(i)內部監控和風險管理、(ii)董事會和審計委員會運作和職能及(iii)網上傳遞管治資訊三個範疇的嘉許獎項共有五家機構獲獎,評審結果令人鼓舞。」

 

值得注意的是,去年公會新增「內部監控和風險管理」及「董事會和審計委員會運作和職能」獎項,旨在鼓勵及嘉許在個別企業管治範疇表現出色的企業,獎項設立以來首次有企業得獎。此外,三家企業在「網上傳遞管治資訊」方面獲表彰,可見上市公司及公營機構對網上傳遞資訊日益重視。

 

大獎遴選委員會主席羅柏達先生表示:「近年企業在風險管理及內部監控報告方面,整體水平有長足進步,越來越多企業在最低規定之外主動披露更多資料。」

 

他又指出:「獎項得主都就企業所面對的主要風險類型分類並加以分析、闡述應對風險的監控及緩解措施,以及描述已識別的風險在年內有否增加、減少或維持不變。這些披露有助投資者明白新興風險的性質及模式。」

 

有待改善之處

 

然而,評審團未能甄選出「非恒指成份股公司(小市值)」組別的得獎公司,並期望這個組別的企業在提升獨立非執行董事在董事會的代表性、增加董事會及審核委員會會議重要事項的披露,以及舉報安排的資料等方面作出改善。

 

羅先生認為,儘管小市值企業的資源相對有限,但追求良好企業管治是非常符合公司最佳利益的。

 

羅先生說:「小市值公司一般都能達到基本披露要求,由於這些通常是在增長期的公司,若他們改進企業管治實務、建立良好聲譽,將有利吸引投資者,有助推動業務增長時享受較低的融資成本。」

 

香港大部分上市公司在多方面的披露均有進步空間,包括繼任規劃資料(尤其是家族業務的企業)、董事委任及離任的詳細說明、高層管理人員酬金披露、行政人員薪酬與關鍵績效指標的關聯、董事會及董事表現評估,以及董事會多元化政策等。

 

公營機構亦要提高董事(包括執行董事及獨立非執行董事)遴選及委任程序和準則的透明度、提供董事會及委員會的工作詳情(包括重大考慮事項及應對重要事宜的對策),以及披露更多有關舉報政策的資料。

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