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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











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。




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。」