How did we get here, where are we going?
CSj talks to this year’s winner of the HKICS Prize, former HKICS President Edwin Ing FCIS FCS, about the past and the future of the company secretarial role.
Congratulations on winning the HKICS Prize – what are your feelings on receiving the prize?
‘I am very touched. I didn’t expect it at all and I am aware of course that the previous winners are all highly illustrious people, so I am very honoured.’
In your acceptance speech at the HKICS annual dinner, you mentioned that your career has paralleled that of the Institute of Chartered Secretaries and Administrators (ICSA) in London and the HKICS here in Hong Kong?
‘Yes. When I was advised that I had been awarded the prize, I did reflect on certain similarities between my own career and the recent development of the ICSA. I was born and grew up in the UK and I came to Hong Kong in the 1980s just as the ICSA in London was realising the importance of the divisions in the future development of the ICSA. Membership in many of the divisions was booming so the ICSA had to start thinking more globally about the profession. Then, in the 1990s when I had decided to make Hong Kong my home and pursue my career here, the ICSA agreed to the important strategic move to allow the incorporation of the HKICS as a local autonomous professional body and grant members in Hong Kong dual qualifications.’
Did you have family ties here?
‘My parents emigrated from Hong Kong to the UK before I was born. I only came here once when I was about seven years old for a holiday, but when I graduated from university my parents gave me a trip to Hong Kong as a graduation present. So I came to Hong Kong and found work in an accountancy firm. The job was really only about using my English skills. The staff needed help with their English so I spent a lot of my time writing or rewriting – I always got them to write a first draft otherwise they wouldn’t have learned anything – letters to the Inland Revenue Department for example. So, apart from having to think up creative reasons for not being subject to tax, I was basically an English teacher.’
At what point did you opt for the Chartered Secretarial career?
‘While working for the accountancy firm I learned about the ICSA. I decided to take the Chartered Secretary exams and I went back to the UK to study for the qualification.
What attracted you to this career?
‘I knew I could make out a case for the Chartered Secretarial profession to my parents because you get post-nominals. In a traditional Chinese family you can only be a doctor, a lawyer, an accountant, maybe an architect or an engineer! I knew I couldn’t be a doctor because I couldn’t stand the sight of blood. I’d looked at becoming a lawyer but I didn’t like the idea of learning lots of case law and I didn’t think my numbers were strong enough to become an accountant.
But, joking aside, this career really fitted in well with me because of the kind of person I am. It may work out for others for completely different reasons and lead to completely different directions. One of the bizarre features of this career is that nobody can be really sure about what direction it will take you in.’
Do you think that is one of the main attractions of this career? Interviewing company secretaries for CSj, I have often been struck by how varied their backgrounds are.
‘I think you’ll find that with a lot of professions – there will be a lot of variety in terms of people’s backgrounds whatever profession they choose. But with the other professions, once individuals choose their path, their careers tend to become more uniform. Of course, an accountant can choose to work in an audit firm or in a listed company for example, but what I find interesting about our profession is that this is a career of your own making. This is a point I make when I talk to younger members. Now that can be a good thing and a bad thing – good because you can really tailor your career to your own abilities and strengths, bad because people still find it hard to define what a company secretary is.
But certainly, this career can take you to places you never thought it would. Because I joined a retailing company, I found myself running department stores and logistics operations, which I never thought I would be doing. I also ran the HR, administration and property departments.’
This was as company secretary for Dickson Concepts (International)?
‘Yes. I came back to Hong Kong after qualifying in the UK and, after working for the same accountancy firm, it was time to move on. I had two choices – join KPMG or Dickson. At KPMG I would get good training and a very rounded career path, but if I chose to join Dickson I would be joining a commercial business so I would learn much more about doing business but only related to the particular sector the company was in – in this case retail.
In the end I chose to work for Dickson as it offered me the chance to try something new – the job also paid more! But it worked out well – working for a smaller-sized listed company you have to handle all aspects of the company secretary role, so it was an excellent opportunity. I was initially appointed as company secretary and was then made an executive director. Actually I’d set myself a target to be an executive director by the age of 30 and I was made a director of Dickson just a few months before my 30th birthday.’
Were you already involved in the Institute’s work at that time?
‘I was just an ordinary member of the Institute until I was asked to a lunch by Neil McNamara FCIS FCS. The Institute was looking for people to assist in its work and someone had suggested me. I have no idea to this day who this person was! Anyway, after the lunch I joined the Institute’s Professional Development Committee and I joined the HKICS Council in 1995.
With 1997 approaching, there were many questions about what impact the handover would have on Hong Kong. Everyone had their own view about this, there were those who regarded it with fear and those who regarded it as an opportunity. The Institute had decided that, to safeguard members’ interests, it would be advisable to make the HKICS an autonomous professional body.
The HKICS was set up in 1994 and, towards the end of 1995, the Institute was looking for a new president. The president of the Institute at that time, Horace Wong FCIS FCS, proposed that I stand as a candidate but I was reluctant to put myself forward. There were members of Council who I felt were more qualified for the presidency, so I only wanted to put myself forward if I had unanimous support. In the end, I stood unopposed and served as president for three years from 1996 to 1998. I think I was seen as the ideal candidate for the presidency over the handover years because I straddled both the UK and Hong Kong Chinese cultures.
From a personal point of view, becoming HKICS president at that time was a great opportunity – I was invited to all of the handover ceremonies, for example. My only regret is that, because no cameras were allowed, I don’t have any photos of those events. I have kept the badges and the booklets, of course, but if it had been today everyone would have been taking pictures with their smart phones!’
You have also witnessed the changes in the role of the company secretary over the course of your career – can you talk a little about that?
‘The importance of the position has grown significantly over the period of my career. When I joined Dickson few public companies had an individual as the named company secretary with a role specifically dedicated to company secretarial work, as opposed to the CFO or the legal director doubling up as the company secretary. I don’t have any statistics to substantiate this, but when I joined Dickson in 1987 I was solely responsible for the company secretarial function and that was relatively unusual – particularly since Dickson was a smaller listed company.
After the 1993 Cadbury Report in the UK, the role has taken a higher profile and has been increasingly tied to corporate governance. This has been a very good development for company secretaries and for the Institute. As a relatively small professional institute, the HKICS could easily have found itself squeezed out by other professions.
There have been many discussions over the years about whether the position of the company secretary should remain in legislation, but the Institute has done a good job of highlighting the importance of the role. In Hong Kong, all companies must have a named company secretary and, in terms of the qualifications considered acceptable for an individual to take on this role, first on the list is being a member of the HKICS. The Institute has also been successful in building its relationship with regulators – particularly the stock exchange. The role is much better understood now. If you have any connection with the listed company sector, you will know what the company secretary does.’
There has been a debate, both internationally and in Hong Kong, about whether the ‘company secretary’ title should be changed – what’s your view?
‘I may be a traditionalist but I still like the title of company secretary. My own personal view is that it encapsulates quite clearly what the position is. There have been suggestions that the name should be changed to “board secretary” – the translation of the term used in Mainland China. But the obligations and responsibilities of the company secretary are to the company as a whole, “board secretary” is a narrower term implying the obligations and responsibilities are to the board alone.
I think the term “company secretary” is right for the position we hold, and we have got to the stage where it is much better understood now, certainly in the listed environment.’
How do you think this evolution of the company secretary role will play out in the coming years?
‘I think it will continue as the demand for better corporate governance develops. The development of the Institute and the profession has really followed in tandem with the development of the corporate governance debate. The Institute will have to stay on top of its game. Maybe down the line the job will be redefined as “corporate governance officer” or something like that. I think down the line you might also find that the Practitioner’s Endorsement becomes mandatory for company secretaries in the listed company sector.
The Institute also needs to look at regulatory developments. Will the trend be towards more and more regulation? Will there be a loosening of a company’s regulatory burden to avoid strangling business? These trends will certainly affect the Institute and the profession.’
Interesting that you mention that since the changing regulatory environment is one of the themes of the Institute’s corporate governance conference later this year. What do you think about the trend for increased reliance on principles-based regulation?
‘That can put the company secretary in a difficult spot. In the past, if there was concern about compliance with the rules, the company secretary would dig out the relevant rule and inform the board of the requirements – “the rule says this… and the threshold is x”. Now, being compliant with regulation is more of a judgement call and, as an adviser, the company secretary is in a more difficult position. Where compliance is a judgement call, there is more leeway for a dominant CEO, for example, to push ahead against the advice of the company secretary.
I think this will test the abilities of company secretaries greatly in the future. Other developments have also made compliance work a lot less straightforward. For example, companies can no longer send draft announcements for review by the stock exchange before they are published. For most of my career the Listing Division played a more assertive advisory and consultative role.’
In the scenario you have just mentioned – where a CEO wants to push ahead with something against the advice of the company secretary – what should the company secretary do?
‘The company secretary has to assess the situation as it relates to the views of all the executive directors and make a judgement call. That would be to consider if he or she deems it necessary to discuss the issue with the independent non-executive directors (INEDs). The INED role has also evolved over the years of my career. In the early days they tended to be friends of the family and would do whatever the CEO/ chair asked them to do. Today, they are not “yes men” and they can play an important role where there is concern about executive decisions. There is a close relationship between INEDs and the company secretary.
But these issues are much more difficult for those in the company secretary role now. In the old days it was more clear cut, you were either in breach of the rule or you were not. Now there is much more of a grey area.’
Thanks very much for giving us this interview, is there anything else you would like to add?
‘I never expected to get so involved with the Institute, but I got a lot out of it personally so I would like to urge people to get involved in the Institute’s work. There is a small group of people who are very passionate about the Institute, while the vast majority don’t get involved. I’m not sure why that is, or how it can be changed, but certainly I would urge members to get involved.’