From concertos to compliance
The new HKICS president, Edith Shih, is as comfortable singing operatic arias as she is discussing the latest issues confronting the Chartered Secretarial profession. In interview with CSj, she discusses her aspirations as president and recounts how a career in music led to a job managing a team of 50 company secretaries and 250 lawyers in a multi-billion dollar listed company in Hong Kong.
It may be comforting for those entering the Chartered Secretarial profession to note that there are many different ways of getting to the top. Edith Shih, HKICS President and Head Group General Counsel and Company Secretary of Hutchison Whampoa Ltd, is about as high as you can go in the profession, but she got to her present position via several ‘proto’ careers which have resulted in a much more rounded and canny individual.
‘I started in music,’ she says, ‘though I wasn’t really aiming to be a performer. You have to be extremely good to be a professional performer, and that would take the enjoyment out of the music. But music did help me get my foot in the door of a university.’ After completing five years of secondary education in Hong Kong, she found herself in the Philippines. Her father was running a business in Manila and wanted his children to join him there. She was too young to gain admission to a mainstream undergraduate programme at the University of the Philippines, but an advanced placement in piano performance enabled her to gain acceptance at the University through a music degree programme.
She completed her music studies with a minor in English and was intent upon a career as an English teacher, so she embarked on an MA in teaching English and applied linguistics at Columbia University, New York. She was writing up her dissertation when her career experienced its next plot twist. Both she and her father were concerned it would be difficult to get a teaching position in applied linguistics in Hong Kong. ‘My father was terrified I would get married and settle down in America but in the back of my mind I always wanted to come back here, so I decided to look for a profession that would take me back to Hong Kong.’
She considered two alternatives – studying for an MBA degree in the US or a law degree in the UK. She opted for the former and told her father she had not gained acceptance to law school and was staying in America. A few days later a letter arrived at her home in Hong Kong. Her father opened it to find that his daughter had been offered a place at the UK College of Law in London. She therefore had no choice but to pack for London.
Her law degree duly helped her back home. Her first job as a qualified lawyer was at Johnson Stokes & Master (JSM) – now MayerBrown JSM – in Hong Kong. After five years at JSM, she was headhunted by an investment bank, the Cheung Kong/ Canadian Imperial Bank of Commerce joint venture. So she found herself at another career crossroads weighing the alternatives – should she stick with what she knew or leap into the unknown?
She was happy at JSM but she was also curious to know ‘the other side of the story’. What would life be like working in a business role rather than at the end of the compliance production line? ‘As a lawyer in professional practise, when your clients come to you they have already done the deal. You might be horrified by what they have agreed to, but you are there to write it up,’ she says.
The choice was made even more difficult when her supervising partner enticed her with a partnership offer in an attempt to persuade her to stay. The investment bank was offering double the salary, but the money, says Edith, was not really the issue. ‘I was ready to stay, but there was a voice in my head saying – you’re a coward.’ So she took the leap and left private practice for the investment bank. She spent two years there and, in 1991, was asked to join her current employer Hutchison Whampoa Ltd, a Cheung Kong Group Company
A new chapter?
Edith has taken the helm of the Institute at a highly interesting time. After a difficult few years, it seems that an amicable and sensible solution to the dispute with the Institute of Chartered Secretaries and Administrators (ICSA) in the UK has been reached. Over 10,000 members from ICSA divisions, including more than 3,000 from Hong Kong/ China, voted to have reasonable and proportional representation on the ruling Council of ICSA in an unprecedented display of support for reform in the way ICSA is structured and run.
Those reforms have now been accepted by ICSA and the necessary amendments to its Charter and bye-laws were scheduled to be submitted to the UK’s Privy Council in March this year.
‘I am very glad that it looks like we will soon have those amendments in place,’ says Edith. ‘With that behind us, the future is bright. For a time we were concerned we may have to break away from ICSA, but this is our heritage and we do treasure that. We have no intention of leaving unless we are forced to. Now that the issue is close to being resolved, we can go back to focusing on our real work.’
There is no shortage of ‘real work’ in the years ahead for the Institute. At the Institute’s annual strategy planning session, held in February this year, the Institute’s Council mapped out its current and long-term objectives.
Hong Kong initiatives
Promoting the value of Chartered Secretaries
In recent years, the Institute has been taking a higher profile, both locally and internationally, and has promoted the profession more actively. This seems to be having the desired effect. In Hong Kong, for example, the stock exchange’s revised Corporate Governance Code, which takes effect this month, has centralised the company secretarial role in supporting good governance practices among Hong Kong’s listed companies.
‘The new Code puts company secretaries at the heart of governance – this is a big step forward for the profession,’ Edith says. She hopes that the new Code will help get the message across to employers that company secretaries are not just regulatory ‘fixers’, responsible for sorting out regulatory compliance after business deals have been done. In companies where they are seen as ‘administrative back-up’, you can have situations where management decides to bypass the company secretarial function altogether and get the board to rubber stamp business deals.
Edith points out that the profession of the company secretary has changed. ‘The job of the company secretary has become a lot more interesting than it was when I started working,’ she says. ‘Company secretaries are not just about writing minutes and preparing regulatory filings. Corporate governance is now at the centre of what company secretaries bring to a company.
The board has to make the decisions, but company secretaries In the works are very well placed to ensure that those decisions make sense from a corporate governance point of view. We are now the governance specialists,’ she says.
Edith played a part in revising the Corporate Governance Code – she is a member of the stock exchange’s Listing Committee and its corporate governance sub-committee which debated the exchange’s proposed revisions to the Code. While membership of the committee represents a big time commitment, Edith says it has given her a better perspective of how the stock exchange operates. ‘It is a good bridge between knowing the rules and having a broader understanding of the philosophy behind the rules and seeing how they are built up.’
She is also a member of the Standing Committee on Company Law Reform and a council member of the Hong Kong Institute of Certified Public Accountants. ‘I am very grateful for these opportunities to give back to the society I grew up in – I find that very satisfying and enriching,’ she says.
Another crucial aspect of the Institute’s work locally is to ensure that members have the technical knowledge and professional skills required to effectively carry out their work. The major ongoing project in this area is the implementation of mandatory CPD (MCPD).
The Institute launched its MCPD programme in August last year and has been collecting the CPD declaration forms from the first batch of members subject to the new MCPD requirements – that is, to acquire 15 CPD points annually. It has also started to contact members in the second batch (those who qualified between I January 2000 and 31 December 2004) to ensure that they are aware of the new MCPD requirements. This second group will have to comply with the MCPD requirements from 1 August 2013. The Institute has also been planning for an increase in venue usage as a result of its MCPD programme.
As you might expect from someone who has been so closely involved in education throughout her career, Edith is also concerned with nurturing skills at the entry level of the profession. She points out that the Institute’s students and recent graduates are the future of the profession. In particular, she is concerned that the pass rates in the International Qualifying Scheme (IQS) exams are relatively low.
The Institute undertook a survey to look into this and it transpired that students generally do not have enough time to study. Most are already working in company secretarial departments to get relevant experience, and, as you know, we tend to work long hours in Hong Kong. People rarely go home before seven and if there are urgent matters to deal with you stay to finish. So we are looking at how we can help them to study.’
The alternative to the IQS route is to take one of the three master’s courses in corporate governance – the so-called ‘collaborative courses’ (CCA) – offered by the City University of Hong Kong, the Open University of Hong Kong and the Hong Kong Polytechnic University. Graduates of these courses gain exemption from the IQS, but few of them have adequate practical experience of working as company secretaries.
‘Many CCA graduates have a limited knowledge of working as a company secretary and this is by and large the comments of employers, so we are working hard to provide practical experience for CCA students,’ Edith says.
As mentioned above, the HKICS has been taking a higher profile both locally and internationally. The Institute’s pioneering work in setting up the Corporate Secretaries International Association (CSIA) in March 2010, for example, demonstrated that the Institute has a role to play in promoting the value of corporate secretaries and governance professionals globally.
The CSIA, which comprises 16 national representative bodies with approximately 100,000 corporate secretaries and governance professionals, will continue to push for a WTO listing in the ‘Trade in Services’ classifications for ‘Corporate Governance, Compliance and Secretarial Advisory Services’. The Institute is also collaborating with the CSIA on developing the ‘Corporate Secretaries Toolkit’ for use in multiple jurisdictions.
Mainland China initiatives
The Institute has been highly active in the mainland over the last decade and has established good relations with board secretaries, regulators, government officials and academics. A significant development this year was the launch of the China Association for Public Companies (CAPCO). It is hoped that CAPCO can provide a formal channel and single organisation for the Institute to work with.
‘We have been working with regulators in mainland China for many years,’ says Edith, ‘but now there is a proper channel to do that. I hope that at some point in the not too distant future we can sign a MoU similar to the one signed with the Shanghai Stock Exchange in 2011 to formalise a closer working relationship with CAPCO on issues such as board secretary training and the establishment of a board secretary qualification scheme.’
Liaison with CAPCO’s new secretariat office is already in progress. Edith adds, however, that the Institute’s objectives on the mainland are long term and that it needs to use its limited resources wisely. Some of that money, however, can ‘hit two birds with one stone’, she points out. While, for example, the PRC IQS syllabus, currently being developed by the Institute in collaboration with educational institutions and listed issuers on the mainland, is targeted at board secretaries on the mainland, it also prepares the ground for the Institute’s Mainland China Education Programme and Chinese Business Diploma designed for Hong Kong members.
‘The PRC IQS will be a version of the IQS for board secretaries in mainland China,’ says Edith. ‘It will concentrate on Chinese accounting, law and secretarial practice. How well it will be received by CAPCO and regulators in mainland China is yet to be seen, but its syllabus will also be the cornerstone of our Chinese Business Diploma in Hong Kong.’
The Chinese Business Diploma, together with the Mainland China Education Programme activities, will be credited with CPD points. The exact details have yet to be worked out, but Edith points out that these initiatives will play an important part in raising the understanding of HKICS members of the mainland’s business, cultural and political environments.
‘We don’t know enough about mainland China,’ she says. ‘It’s not our fault, we live in a different system, but we cannot ignore what is happening across the border.’
SIDEBAR: Career notes
Ms Edith Shih, BSE, MA, EdM, Solicitor, FCIS, FCS(PE), was elected president of the HKICS in December 2011. She will be no stranger to members of the Institute, having served on the Institute’s Council since 2008, as Vice-President since December 2009, and as Education Committee Chair from 2009–2011. She is a Fellow of both the HKICS and the Institute of Chartered Secretaries and Administrators. Edith is the Head Group General Counsel and Company Secretary of Hutchison Whampoa Ltd (HWL), and serves as a director of various HWL group companies. She is a member of the Listing Committee of the Hong Kong Stock Exchange, the Standing Committee on Company Law Reform and a council member of the Hong Kong Institute of Certified Public Accountants. She holds a Bachelor of Science degree in Education and a Master of Arts degree from the University of the Philippines, and a Master of Arts degree and a Master of Education degree from Columbia University, New York. She is qualified to practise law in Hong Kong, England and Wales and Victoria, Australia.
SIDEBAR: In the works
Some 30 separate initiatives were discussed at the HKICS Council strategy planning session held in February this year. In addition to the initiatives mentioned in the main article, these include:
• implementing the marketing campaign to employers to enhance the value of Chartered Secretaries
• admitting company secretaries who are not Chartered Secretaries from the top 100 Hang Seng Index listed companies to the profession subject to the fulfillment of certain requirements
• preparing for the Corporate Governance Conference 2012 which will take place in early October this year
• fund raising and rolling out of project operations of the Chartered Secretaries Foundation Ltd (see this month’s Institute News for more details)
• devising the best option for regulating the ‘trust and company services providers’ sector for anti-money laundering purposes
• lobbying the HKSAR government to include Chartered Secretaries as a functional constituency in the 2016 Legislative Council election
• inviting nominations of appropriate candidates for the HKICS Prize
• attracting Fellowship applications
• producing the ‘Roles and Responsibilities of Company Secretaries of Hong Kong Listed Issuers’ research report (a sequel to the Institute’s research papers on the same topic in 1995 and 2001)