Best Corporate Governance and ESG Awards
The Hong Kong Institute of CPAs successfully concluded its Best Corporate Governance and ESG Awards (“the Awards”) with the presentation luncheon ceremony held at Sheraton Hong Kong Hotel & Towers on 6 December 2022.
Guest of honour, chairman of the Accounting and Financial Reporting Council, Dr. Kelvin Wong, presented the awards to the winners at the 2022 presentation ceremony. These included winners of the top category of awards, the Most Sustainable Companies/ Organizations (MSCO) Awards, as well as awardees in the separate categories for corporate governance (CG) and environment social and governance (ESG), and in the Self-Nomination Awards. The MSCO Awards focus on sustainability in its broadest sense and aim to identify listed companies and public sector organizations that give equal attention to their CG and ESG, and which are clearly integrating CG and ESG considerations into their values, strategies and operations.
Ms. Loretta Fong, president of the Institute and chair of the judging panel, and Ms. Loren Tang, chair of the Awards organizing committee, spoke at the event. While Ms. Tang explained briefly aspects of the Awards’ assessment process in 2022, in her address, Ms. Fong said, among other things:
- “With greater attention being given throughout the community towards achieving carbon neutrality by 2050, supported by a regulatory push towards more extensive ESG disclosures, and also pressure from institutional investors, we have been seeing more candidates making it through to the later stages of the ESG section of the Awards. At the same time, we have not lost sight of the fundamental need for a strong governance regime in listed companies and public sector organizations.
- Corporate failures, like the recent meltdown of FTX, highlight that we must not take our eye of the ball when it comes to promoting and insisting on good CG as one of the basic building blocks of a sound company. The liquidator in that case referred to ‘a complete failure of corporate controls’, ‘compromised systems integrity and faulty regulatory oversight abroad’….This case is certainly a salutary reminder to organizations that, no matter how lucrative or profitable the business appears to be, without proper controls and CG structures in place, long-term sustainability may be in jeopardy.
The president also referred to a board diversity research report published recently by the Institute in parallel with the Awards, which looked at board size, long-serving independent directors, and diversity, in terms of gender, age, and professional qualifications, in particular, accounting qualifications. The Institute believes that embracing diversity in an organization’s culture and on boards can have various beneficial effects on the organization, including on business results. International research has, for example, found a correlation between gender diversity and better financial performance, as improved diversity may attract more talent and provide a better mix of knowledge and views, which can contribute to more effective decision-making and empower innovation.
The speakers expressed appreciation for the invaluable contributions of the judges, reviewers, the Institute’s management staff, and others involved in helping to ensure the success of the Awards. They also thanked the supporting organizations, many of which provided judges and reviewers, and a number of which responded generously to the invitation this year for financial sponsorship, as well as thanking the media sponsors of the Awards. All were named in the Judges’ Report.
The previous afternoon, 5 December 2022, the president, Ms. Tang and Mr. Patrick Rozario, chairman of the Awards' review panel, hosted a media briefing to announce the results of the Awards. They reported on the overall CG and ESG performance of the companies and organizations under review and their general strengths and weaknesses, as well as highlighting some of the judges' observations about the winners. Please click the press release for further details.
The Institute wishes to congratulate all the 2022 awardees, including the 10 winners of the MSCO Awards, with CLP Holdings Limited, winner of a platinum award in the Hang Seng Index category, continuing to stand out in terms of its CG and ESG performance. The Link REIT won a gold award also in the same category. MSCO awardees in other categories were Prudential plc, The Hong Kong and Shanghai Hotels, Limited, Pacific Basin Shipping Limited, VTech Holdings Limited and Lenovo Group Limited. Meanwhile, Hong Kong Exchanges and Clearing Limited, the MTR Corporation Limited, and Standard Chartered PLC were given special mentions. Together with other awards given out in the separate sections for CG and ESG, the judges recognized a total of 27 companies and public sector organizations in the 2022 Awards.
The full list of winners is contained in the Judges’ Report. There are also commentaries on the individual awardees, and other background information on the Awards.
Directors, chief financial officers and other senior representatives of the winning companies and organizations attended the Awards luncheon to receive their trophies, Slides showing examples of the scope and presentation of information extracted from the annual and sustainability reports of the awardees were displayed during the presentation ceremony.
The proceedings began with a three-minute silence in honour of the late former president of the People’s Republic of China, Mr. Jiang Zemin.
This was the 22nd anniversary of the Awards, which were launched in 2000. Originally called the Best Corporate Governance Awards, the competition focused on CG disclosures. Awards for sustainability and social responsibility reporting were first introduced in 2011. The competition was revamped and renamed in 2021, with the introduction of the MSCO category of awards.
The Awards are among Hong Kong’s most prestigious business-related competitions, setting benchmarks of best practice in CG and ESG for listed companies and public sector organizations, and encouraging improvements in overall standards. They enjoy strong support from the government, financial market regulators, investor groups, the business and professional community and academia. They emphasize the need for organizations to be transparent and accountable and to engage shareholders, investors and other stakeholders, including the communities in which they operate.
The focus of the Awards is on the voluntary adoption of standards of practices and disclosures that significantly exceed the minimum legal and regulatory requirements. While the immediate focus is information disclosed in annual reports and sustainability reports, of which over 300 of each were examined in the first stage in 2022, ultimately, the judges and reviewers are trying to ascertain whether the candidates really have good CG and ESG ingrained in their DNA, and to identify companies and organizations that demonstrate a strong CG and ESG culture, and a commitment to long-term sustainable success. This being the case, where appropriate, they will also take account of other public information, such as news information, that may provide further evidence of how individual organizations are being run.
