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HKICPA urges boards to commit to good disclosure and ensure robust risk management in times of uncertainty

06 July 2020

The 20th anniversary of the Best Corporate Governance Awards calls for entries


(HONG KONG, 6 July 2020) Good corporate governance has long been seen as a foundation for sustainable organizations, which underpins the investment value of listed companies. This year, Hong Kong’s prestigious benchmark of corporate governance excellence – the Best Corporate Governance Awards (BCGA / Awards) – are celebrating their 20th anniversary. Organized by the Hong Kong Institute of Certified Public Accountants (HKICPA), the Awards are now open for entry until 10 August.

Times of uncertainty, such as the ongoing COVID-19 pandemic, create challenges for the operations of organizations. At such times, for listed companies in particular, corporate governance plays an especially important role in protecting investors’ and stakeholders’ interests. The HKICPA is urging boards of directors to ensure that companies review their risk management and reporting system.

“COVID-19 has challenged the disaster preparedness of businesses, and forced them to adapt and to address a range of issues, from staffing and logistics, to cybersecurity and communications. How well companies have been able to address these questions could make the difference between success and failure. Going forward, some companies may need to look at modifying their business models and operating practices,” said Mr. Johnson Kong, President of the HKICPA and Chairman of the Judging Panel of the Best Corporate Governance Awards 2020. 

“Companies with effective corporate governance and sustainability practices are in a better position to get through these difficult times, because they have boards that encourage frank and open discussions, and the ability and willingness to engage all their stakeholders,” said Mr. Kong. 

In terms of COVID-19-related disclosures, the HKICPA notes that, in the April issue of its Listed Issuer Regulation Newsletter, the Stock Exchange of Hong Kong Limited (HKEX) encouraged listed companies to provide quantitative measures of the financial impact, and assessments of cost measures and liquidity positions; as well as to update investors on material developments and disclose any new business opportunities with factual information in a clear and balanced way.  

“We would echo those sentiments on the need for transparency at this time,” Mr. Kong added. Looking at the annual reports for the year ending 31 December 2019 of Hang Seng Index constituents – even though the pandemic did not take hold until after the reporting period – the HKICPA observed that around 30% of them included more extensive COVID-19-related information, such as discussing the impact of this crisis and the underlying measures, while a few also indicated that they have sufficient liquidity. This is something that the HKICPA will look at in more detail during the review stage of this year’s Awards. 

Mr. Kong explained that the gatekeeper role of auditors can be particularly important during an economic downturn. Companies could have a greater incentive to engage in financial misconduct and fraud during difficult times. Auditors exercising their professional scepticism can help to identify potential gaps in an organization’s financial reporting and internal control systems. 

“Boards should also ensure that listed companies review their business contingency planning to ensure that it addresses how to maintain effective operations in different scenarios, such as when facing major resource constraints or increased vulnerability to cyberattacks. This is equally true for major public sector organizations providing essential services, such as health services,” said Mr. Patrick Rozario, Chairman of the Review Panel of the BCGA 2020. 

Over the two decades since the inception of the Awards, corporate governance has developed and the bar has been raised steadily and progressively in Hong Kong. “Nowadays, investors, particularly institutional investors, are increasingly concerned about the sustainability practices and the disclosures of companies. More asset managers are considering a company’s environmental, social and governance (ESG) practices when assessing its investment potential during their risk assessment process. Some asset managers believe companies with strong profiles in terms of addressing material sustainability issues will outperform those with poor profiles. On sustainability, the judges of the BCGA recommend companies to develop clear strategies and objectives from the top down, as well as undertaking ongoing benchmarking with key performance indicators and concrete targets to monitor how they are performing,” explained Mr. Rozario. 

“For the past 20 years, the BCGA has promoted and highlighted the value of good governance, identified those listed companies and public sector organizations that represent best practices in Hong Kong, and encouraged others to follow suit. The Awards judging criteria look beyond the minimum legal and regulatory requirements to identify voluntary disclosures and practices that demonstrate that good corporate governance has become part of the DNA of a company or organization,” said Ms. Loren Tang, Chair of the Organizing Committee of the BCGA 2020. 

“The Awards have established a recognized benchmark for Hong Kong’s corporate governance and sustainability and social responsibility reporting standards. The HKICPA is now inviting listed companies and public sector and not-for-profit organizations to enter the BCGA 2020.” Ms. Tang explained that the HKICPA puts considerable effort into reviewing around 500 annual reports and a similar number of standalone sustainability reports, as well as related information on websites, in the belief that a culture of good corporate governance and sustainable business practices can enhance investor and public confidence in the Hong Kong capital market. The aim is ensure that Hong Kong’s market continues to attract high-quality investment in a very competitive regional and global environment. 

This 20th anniversary of the BCGA is supported by media sponsors Hong Kong Economic Times, The Standard and ET Net. For more details of the Awards, please visit:


市道不明朗 卓越企業管治成關鍵


「最佳企業管治大獎」20周年 現接受報名