Why directors need company secretaries / 董事為什麼需要公司秘書？
The latest Regional Board Secretary Panel meeting, held on 7 January 2014 in Hong Kong, confirms the key role of the company secretary in guiding directors through today’s complex and highly regulated business landscape.
T he Institute’s Regional Board Secretary Panel (RBSP) meetings are intended as a forum to initiate a lively conversation among HKICS members about the current corporate governance and regulatory challenges in Mainland China and Hong Kong. The latest RBSP meeting was held on 7 January 2014 in Hong Kong and was attended by 25 company secretaries, legal executives and senior managers representing a number of renowned Mainland enterprises listed in Hong Kong.
Dr Maurice Ngai FCIS FCS(PE), HKICS Vice-President and Director and CEO of SW Corporate Services Group Ltd, moderated the discussions, while Dr Gao Wei FCIS FCS, HKICS Council Member and Board Secretary and General Counsel of Sinotrans Ltd; as well as Yao Jun, Chief Legal Officer, General Manager of the Legal Department and Company Secretary of Ping An Insurance (Group) of China Ltd; gave keynote speeches and shared their experience with the attendees.
The discussion kicked off with an animated presentation by Dr Gao on the induction of directors and the role played by the company secretary in ensuring good corporate governance. It was followed by Mr Yao’s thorough introduction to what constitutes inside information; the importance of keeping inside information confidential; when safe harbours are available; and where to find guidelines on the disclosure of inside information.
In between the presentations, the forum’s discussions focused on a few recent insider trading cases in Hong Kong and in the Mainland – in particular the heavy penalties imposed by the CSRC on Everbright Securities for insider trading. Most participants agreed that many of these insider trading mistakes could have been avoided if these companies had insider trading policies clearly stipulated for the benefit not only of the directors but also the employees who have access to inside information.
They also noted that such court cases are the best ‘teaching materials available to educate directors about the requirements of Hong Kong’s insider dealing and market manipulation laws, and remind them of the legal consequences of not complying with them. Dr Ngai remarked that the directors of some Mainland companies are not familiar with the relevant insider trading laws in Hong Kong and that these court case studies are an effective way of reminding them about the potentially very serious consequences of violating Hong Kong’s insider trading requirements.
The guiding role of the company secretary
Following the Walker Report on corporate governance in the UK banking industry in October 2009 and the release of the UK Corporate Governance Code, formerly known as the Combined Code, in May 2010, Hong Kong Exchanges and Clearing (HKEx) published a renewed version of the Director’s Handbook. Dr Gao recommended this highly useful resource at the beginning of his presentation, pointing out that it gives an updated overview of the key governance issues for board/ company secretaries – including the key duties of the company secretary in facilitating the induction and the provision of ongoing guidance to directors.
He also referred the audience to Section F of Hong Kong’s Corporate Governance Code as an excellent guide to the important role of the company secretary in supporting the board. Of particular relevance to this discussion is the principle set out in Section F that the company secretary is key to ensuring good information flow within the board and ensuring that board policies and procedures are followed. Accordingly, in addition to advising the board through the chairman and/ or the chief executive on governance matters, the key duties of the company secretary include facilitating the induction and professional development of directors. ‘
As with the board secretaries of Mainland China, Hong Kong’s company secretaries should provide advice to the board to ensure good corporate governance and should arrange for the induction of new directors, encompassing both directors’ duties and responsibilities in general and specific matters pertaining to the company itself and the industry in which it operates,’ he said.
The company secretary should also identify any training needed for inexperienced directors and should ensure that there is an ongoing programme to keep all directors updated on developments in the company and of the latest regulatory framework. ‘The HKICS arranges over 100 activities every year and they are suitable for directors to take part in as part of their training programme,’ said Dr Gao.
He emphasised that any failures by directors to comply with corporate and regulatory requirements can be disastrous, not only for themselves, but also for the company and its shareholders. The 520 million yuan fine imposed by the CSRC on China Everbright for insider trading is a case in point.
Dr Gao also cited the Hong Kong Aircraft Engineering Company (HAECO) insider dealing case brought to court by Hong Kong’s Securities and Futures Commission (SFC). The defendant, a HAECO non-executive director and a former government official, was fined about HK$50,000 for making about HK$80,000 from an insider deal on the company’s stock. He also received a five-month jail sentence suspended for two years.
‘These cases clearly demonstrate that some listed companies lack a stringent internal approval procedure for the prevention of insider trading,’ said Dr Gao. He strongly recommends that all directors should familiarise themselves with the Model Code for Securities Transactions by Directors of Listed Issuers published by HKEx. ‘The stock purchase procedure exemplified by the Model Code not only protects directors and employees from committing insider dealing and market misconduct by mistake, but also helps safeguard the interest of the company as a whole,’ he said.
Regarding inside information disclosure, Dr Gao also mentioned Hong Kong’s revised Securities and Futures Ordinance (SFO) which was implemented on 1 January 2013. The SFO imposes a statutory obligation on Hong Kong listed companies to disclose inside information, and, in Dr Gao’s view, is geared towards investors. He pointed out that directors now have to ask themselves if an event or particular piece of information would be regarded as price-sensitive from the perspective of an investor. ‘This is difficult. How can directors know what the investors are thinking?’ he questioned.
The new Companies Ordinance
Dr Gao also highlighted the higher corporate governance requirements relating to directors in Hong Kong’s new Companies Ordinance, which will come into effect next month. He explained that the new ordinance adopts a mixed objective and subjective test in the determination of directors’ standards of care, skill and diligence. Accordingly, a director must exercise the reasonable care, skill and diligence that would be exercised by a reasonably diligent person with:
- the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same function as the relevant director (the objective standard), and
- the general knowledge, skill and experience that the director has (the subjective standard).
Directors should pay attention to the fact that their duties specified above are primarily governed by the common law, he reminded his listeners.
Dr Gao also pointed out that the Company Law of the People’s Republic of China and the new Companies Ordinance of Hong Kong share some similarities in terms of the duties of directors. Article 148 of China’s Company Law stipulates that directors, supervisors and senior managers should comply with laws, administrative regulations and the articles of association. They should bear the obligations of fidelity and diligence to the company.
‘Under common law, directors should avoid conflicts of interest, which is equivalent to “the obligations of fidelity” in the Mainland,’ he said.
The new Companies Ordinance has also tightened restrictions of directors’ conflicts of interest, in particular raising the requirements for their disclosure of interests. ‘In fact, as a director, every time you buy your company’s stock, no matter how many shares, you have to disclose the transaction and get the approval from your company first. Once approved, this has to be filed with the HKEx within five days,’ Dr Gao said. ‘There are similar disclosure policies in China as stipulated in the Administrative Rules on Acquisition of Listed Company.’
Inside information – best practices for board secretaries
In his presentation, Yao Jun gave an accessible and non-legalistic explanation of what inside information is, as well as the dual roles played by directors and managers as both insiders and the keepers of inside information.
‘If you are not sure whether some information on hand is classified as inside information, ask your company lawyer as soon as possible. If the information qualifies for a safe harbour exemption, make sure it is perfectly safe. If it has to be disclosed, do it immediately, right after discussion with the board,’ he said.
On this point, Mohan Datwani FCIS FCS, HKICS Director of Technical and Research, reminded the participants that the safe harbours regarding inside information have been narrowed under the new rules. ‘Under the old regulations, there were a lot of things you could choose not to disclose… but under the new law, there are only a very few instances in which you can use a safe harbour [exemption], such as incomplete negotiation and trade secret,’ he said.
Yao Jun went on to explain that the directors and senior management of a company are both insiders and the keepers of inside information. As insiders, they are prohibited from trading in the company’s securities or their derivatives during any sensitive periods, nor can they leak the information or encourage others, explicitly or implicitly, to trade in the securities.
He emphasised that board secretaries should ensure that an effective monitoring system, a set of security measures and an inside information disclosure policy should be in place.
The speakers’ presentations were followed by a lively open forum session. Xie Bing, Company Secretary of China Southern Airlines Company Ltd, addressed the disclosure of inside information. He suggested that seeking a trading suspension, if necessary, can be a useful means to ensure best practices are followed when an inside information announcement needs to be made. Such a suspension, however, must be consistently applied across all bourses, be it the H-shares of Hong Kong or A-shares on the Mainland.
This was echoed by Wei Fang, Chief Representative of the Representative Office of China National Petroleum Corporation in Hong Kong. ‘We all learn from our mistakes. Our company has been listed for 12 years and we have learned many lessons. From my experience, a trading suspension can be a good thing for the company since it can give you time to prepare an announcement, or make a clarification of some burning issues that affects the company’s reputation and stock prices,’ said Mr Wei.
Lu Lu, Company Secretary of China Galaxy Securities Co Ltd, which is an A+H-share company, raised a question about the best ways for company secretaries to get the whole picture of an event or an incident in order to judge whether it should be disclosed as inside information.
‘I think we as company secretaries can take the initiative to request to attend different meetings concerning the development of a particular event or incident in order to make the judgement,’ answered Huang Haiyan, Vice-President and Joint Company Secretary of Boyaa Interactive International Ltd.
Gao Ke Ying, Director of Securities and Legal Affairs at A8 Digital Music Ltd, asked at which stage an M&A deal should be announced. In response, Dr Gao pointed out that if the deal is still under negotiation and can be considered ‘an incomplete proposal or negotiation’, then the relevant safe harbour can be applied.
Citing her experience of handling information requests from both HKEx and the SFC regarding an acquisition, Zhong Yan, Board Secretary, Great Wall Technology Co Ltd, said she realised that the SFC has much stricter standards than the HKEx.
Mr Datwani echoed this comment. ‘Very different from the HKEx, the SFC is much more forceful in defending against insider trading and market manipulation. They have actually hired more staff to keep a close eye on company activities. Unfortunately, once your company has been suspected, you can expect to have to answer a long list of questions raised by the SFC,’ he said.
Li Qian, Joint Company Secretary of BYD Electronic (International) Co Ltd, noted that his company’s stock ownership guidelines and insider trading policies have been very important in preventing directors and employees from conducting insider dealing unwittingly. ‘Without prior approval from the company’s chairman, no director or employee can buy the company’s stock. If they have no idea of what insider trading is, we’ll be the gatekeeper. In so doing, not only can we protect our directors and staff but also protect the interest of the company,’ he said.
Dr Gao agreed. ‘After all, we should do our best to ensure that directors and managers understand the regulatory framework. If directors know when to ask the right questions, it would give us a higher sense of job security,’ he said.
Jimmy Chow, Journalist
2014年1月7日，香港特許秘書公會（公會）在港召開新一輪的董事會秘書專責小組會 議，與會者均認同，現今商業環境變化莫測，公司秘書對引導董事作出合規的決定， 發揮關鍵作用。
公會的董事會秘書專責小組會議， 目的是通過小組討論形式，鼓勵 公會會員就當前企業管治以及中國內 地和香港的監管架構所帶來的挑戰， 作深入討論和交流。最近一次會議於 今年1月7日在香港召開，共有二十五 位代表多家在港上市內地知名企業的 公司秘書、法律專家和高級管理人員 出席。
香港特許秘書公會副會長及信永方圓 企業服務集團行政總裁魏偉峰博士 為圓桌會議的主持人，而中國外運股 份有限公司董事會秘書兼香港特許秘 書公會理事高偉博士及中國平安保險 （集團）股份有限公司董事會秘書兼 首席律師姚軍則作出了主題演講，並 跟與會者分享了他們的實際經驗。
高偉博士負責第一輪的演講，內容圍繞 新董事啟導工作，以及公司秘書在確保 良好企業管治中所扮演的角色。其後， 姚軍在其演講中則扼要說明了何謂內幕 信息、內幕信息保密之重要性、什麼情 況下可引用安全港條文、以及在哪裡可 找到有關內部信息披露的指引。
在演說及討論過程中，演講嘉賓和與會 者更討論到了幾宗在中港兩地的內幕交 易案例－特別是光大在816事件後被中 國證監會判罰5.2億元人民幣一案。大 多數與會者都表示，這些事件反映出有 很多上市公司都欠缺一套嚴謹的內幕交 易防控措施，以防止董事及能接觸內幕 消息的員工進行公司股票買賣而誤墮法 網，否則的話，這些內幕交易事件根本 是可以避免的。
與會者一致同意這些實際案例是最佳的 反面教材，能有效向董事說明內幕交易和市場操縱行为的相關法例，以及違 規的嚴重法律後果。魏偉峰博士還特 別提到，對於一些不諳香港內幕交易 和市場操縱行為相關法例的內地公司 董事，這些案例殊值作為借鏡，以免 誤蹈法網。
據高偉博士在演講開始時介紹，2008 年金融危機後，英國當局成立了一個 專門小組，檢討英國銀行業的公司管 治，探究金融機構的企業管治出現了 什麼問題。調查報告（名為「Walker Review」）於2009年10月發佈，而在這 份報告之後，英國也發佈了新的《公 司治理守則》（此前名為「Combined Code」）。
其後，港交所亦發佈了更新版的《董 事手冊》，高偉博士認為這本《董事 手冊》對董事及公司秘書均有極高的 參考價值，當中提及到對董事培訓新 的要求。 （注：《董事手冊》目前只 提供英文版，而高偉博士在公會專業 技術及研究總監高朗的協助下，正把 《董事手冊》內容翻譯成中文。)
此外，他還特別引述了港交所《上市 規則》附錄14《企業管治守則》F部份 的條文，重申了公司秘書的角色，包 括確保董事會成員間的信息溝通及董 事會政策及程序方面的遵循、向董事 會提供關於良好企業管治的意見、安 排董事入職培訓（啟導）等。
他說：「跟內地董事會秘書一樣，香 港公司秘書須向董事會提供關於公 司治理方面的建議，同時，作為良好 公司治理的一部分工作，公司秘書也 須安排董事啟導，向董事詳細講解董 事的責任、公司的營運和行業狀況 等。」
公司秘書有責任向新入職董事提供培 訓，除新入職的啟導外，還須向所 有董事安排持續的培訓計劃，確保他們瞭解公司的最新發展和法律法規。 他說：「公會每年都會組織一百多次 講座，這些活動都十分適合董事參 加。」
高偉博士特別提醒，若董事因疏忽而 違反了公司及法例要求，對其本身 個人以至公司和股東利益的影響可以 相當巨大。光大被判罰巨款一案正好 說明這點。他還引述了港機工程前獨 立非常務董事被裁定內幕交易罪成一 案，被告被判處監禁五個月，緩刑兩 年，並罰款五萬港元。他相信，被告 本身為前政府高官，理應不會犯險從 事內幕交易以賺取八萬港元，也反映 公司缺乏有效監管內幕交易的政策。
他說：「這些案例反映了有些公司的 內幕交易防控措施做得不足。」他 建議董事熟讀《主板規則》附錄十 「上市發行人董事進行證券交易的標 準守則」，裡面提及的股票購買程序 規範，可防止內幕交易和市場失當行 為，不僅能保障董事和雇員利益，也 有利於維護公司的整體利益。
在演讲中，高偉博士提及，將於今年 三 月 实 施的新《公司條例》，對企 業管治的規定有更高的要求。他解释 说新《公司条例》对董事的谨慎、技 能、勤勉的判断标准采用了主观与客 观结合的方式。董事须具备一个恰当 勤勉的人所具有的恰当的谨慎、技能 与勤勉，这个人须：
- 具有一个相关董事履行相同职能 所应具备的一般知识、技能与经 验（主观标准）
- 具有董事所具有的一般知识、技 能与经验（客观标准）
高偉博士提醒，董事應當注意以上要 求屬普通法的信義義務，是一項重要 的約束。他舉了一些中華人民共和國的《公司 法》及香港新的《公司條例》相似的 地方，例如，前者第148條規定，「董 事、監事、高級管理人員應當遵守法 律、行政法規和公司章程，對公司負有 忠實義務和勤勉義務」，這個跟香港的 《公司條例》的规定相差无几。
他解釋說：「按照這個去理解，香港 跟大陸的公司法其實都沒有區別的， 都是主觀和客觀的對董事有所要求。 普通法要求董事避免利益衝突，而這 個要求在內地相當於忠實義務。」
另外，新《公司條例》還收緊了對董事 利益衝突的限制，特別是權益披露。 「公司董事购买公司的股票，无论购买 多少，均要作出披露，及预先通知公 司，获准后在成交后五天之内再知会港 交所。在内地也有一套《上市公司收購 管理辦法》。」
在演講中，姚軍深入淺出的講解了何 謂內幕信息，以及董事和高級管理人 員作為內幕信息的知情人和管理責任 人的角色。
他開章明義地指出：「如果你不清楚什 麼是內幕信息，趕快去問你的律師，瞭 解要不要儘快披露。該保密的便要保 密，不可以對任何人說，要披露的，和 董事局商討後就要趕快披露。」
在內幕信息的議題上，高朗特別提 醒，在修例前有很多事情還是可以選 擇不作披露，但在新例下，安全港容 許的豁免廖廖可數，一般為未完成的 商議或計劃及商業機密。
姚軍續說，董事及高級管理人員有雙重 身份，其一是內幕信息的知情人，其二 是內幕信息管理責任人。作為知情人 士，他們在敏感期不能買賣公司股份或 其衍生工具，以及不得明示或暗示他人 從事上述交易活動。他強調，董秘應盡最大努力確保公司建立並貫設執行一套 有效的監控系統、安全措施及內部信息 披露政策，以策萬全。
中國南方航空股份有限公司董事會秘書 兼董秘辦主任謝兵同意姚軍的看法，認 為保密不了的就該儘快披露，如果可 行，還應同時在不同的交易所申請暫時 停牌，如香港的H股及上海的A股等。
中國石油天然氣股份有限公司香港代表 處總代表魏方也同意謝兵對暫時停牌的 觀點。他說：「我在這裡跟大家分享我 們的經驗，包括我們的錯誤，我們來港 上市已有十二年了，中間有很多經驗， 教訓也很多。在停牌的經驗方面，我認 為停牌是有意義和有利的，能給我們時 間作一些澄清維護公司的形象，對一些 負面報導進行反駁。」
同 在 A股 和 H股上市，中國銀河證券 股份有限公司會議秘書路璐向其他與會者提問，到底該怎樣做才能掌握大 局，從而判斷某些事情或事故是否有 需要作出披露。
博雅互動國際有限公司副總裁及聯席 公司秘書黃海燕答道：「我認為我們 應盡可能參與公司各種會議，盡可能 主動提出參與，特別是關於公司的一 些重大事情，才能把重要的事情回饋 到公司秘書的層面。」
A8電媒音樂有限公司證券及法律事務部 總監高克穎則提問，并購投資到底在哪 個階段便要公佈？高偉博士引用安全港 中對未完成的商議或計劃的豁免，指出 如果收購仍在商議階段，毋須公佈。
長城科技股份有限公司董事會秘書鐘 彥從經驗體會到，港交所和證監會 對收購計劃需要披露的資料的細節程 度有極大差異，而後者比前者嚴格得 多。高朗坦言：「證監會比聯交所 『嚴格』得多，總之對公司有任何懷疑，便會查找到底，而證監會亦聘請 了很多人，監視每一家公司的活動。 如果公司一旦出事，證監會有充足人 手逐一跟進。」
比亞迪電子（國際）有限公司公司秘 書李黔跟大家分享，指出其公司之員 工股票買賣指引和內幕交易政策，對 防止董事和員工進行內幕交易起極大 作用。他說：「員工買賣股票必須先 得到董事長審批。如果他們不知道什 麼是內幕消息，就讓我們把關，要我 們審批，此舉不但可保障董事和員 工，也保障了公司利益。」
高偉博士在會上打趣地說：「我們作 為董秘，必須把這些要求灌輸給董 事。只要董事具備了以上的法律知 識，反過來也是幫助了我們，職業安 全感也會大大的提升！」
Jimmy Chow, 記者