A career considered
At the end of last year, April Chan retired as Company Secretary of CLP Holdings. Her career took her to the top of the corporate secretarial profession as a former president of both the HKICS and the Corporate Secretaries International Association and as the company secretary of one of Hong Kong’s largest and best known listed companies. This month, she looks back over her career and shares some thoughts on the road ahead for corporate secretaries in Hong Kong.
Thanks for giving us this interview – could we start by looking back over your career?
‘Certainly. I grew up in Hong Kong. I studied Company Secretaryship and Administration at the Hong Kong Polytechnic, and got my Chartered Secretarial qualification after taking the ICSA examinations.’
Had you already decided that you wanted to be a company secretary?
‘No, I knew nothing about the work of the company secretary. My eldest sister advised me that this might be a suitable career for me and I must thank her for that. At that time the Polytechnic was the only institute with a relevant curriculum and the competition was so high that the admittance ratio was 1 in 40 – so I was fortunate to get in and get my qualification.
Having graduated, I started my career in a CPA firm and my boss there was my first mentor. I am very grateful to him – despite the fact that I was only a fresh graduate, he gave me a free hand to handle clients. Actually, he was very demanding but that gave me a good training in the need to be cautious and meticulous about details.
I was with the firm for about three years before I got married and went to the UK with my husband. When we came back to Hong Kong, I took up a position on the team setting up the Hong Kong Academy for Performing Arts (APA). I am very proud of the fact that, with a lot of persistence, I was able to persuade the government to create a suitably prestigious address for the APA – Number 1 Gloucester Road. I was offered various addresses for the site but I managed to persuade the relevant government departments to create an address that would help add credibility to the APA and help it recruit high-quality teachers from overseas. My instinct has always been to ask questions and that has helped me throughout my career.
After three years in Hong Kong, my husband and I migrated to Australia where I worked for a University. After two years in Australia, we came back to Hong Kong and I started to work for CLP – that was in 1988.’
Working 27 years for one company is unusual in today’s job market – what was it that worked so well at CLP?
‘CLP is a very good employer. It has a culture of integrity which has a lot to do with the Kadoorie family shareholders. I started working for the present chairman’s father, Lord Kadoorie, then Sir Sidney Gordon and Sir Michael Kadoorie. They all had very good shared values and always encouraged good governance. This culture has meant that CLP has been able to recruit and retain good staff.
When I first joined CLP, the average length of service was 25 years. I didn’t think I would last even five years in the same job but working for a company with that kind of culture makes a lot of difference for a company secretary. I had a lot of encouragement and support to introduce good governance practices from the chairman, the board, senior management and from colleagues as well. This not only made my job easier, it also gave me a lot of job satisfaction.’
Do you think this is an important thing for fresh recruits to the profession to bear in mind – the difference that a good corporate culture can make to the work of a company secretary?
‘One of the most important tasks of the company secretary is to safeguard directors’ and shareholders’ interests by promoting good governance across the organisation. If you don’t have the right employer with a good culture of integrity, it is not possible to do this. Of course, it is a two-way exchange – the new recruits also have their own responsibilities.’
How has the role of the company secretary changed over the course of your career?
‘It has evolved as the regulatory environment has evolved over the last three decades. In the early days, the role was more focused on meeting the statutory requirements. As the company secretary, people expected you to ensure compliance with the Companies Ordinance. Once the listing rules had been introduced, the role expanded to ensure compliance with the listing rules, if you were working for a listed company, but the job was still very compliance-focused. People tended to think that you had to comply with the rules and that was all.
Since then, the regulatory environment has not only become more stringent but investors’ expectations have changed as well. We have moved towards a corporate governance focus and the company secretary role has become more advisory. As the company’s governance adviser, company secretaries need to keep up to date with the international corporate governance environment so that they can build up the company’s governance framework and introduce international best practices.
More recently the company secretarial role has gone through further changes. Just ensuring good governance internally in the company is not enough, you have to engage your shareholders, your investors and other stakeholders, because their expectations are changing. In the past, the assumption was that if a company had good governance investors would buy the shares. These days, investors and other stakeholders are looking beyond the usual criteria – they are looking at things like your environmental, social and governance (ESG) reporting as well. So the reporting role of the company secretary has become more comprehensive. These days you can’t just think in terms of financial reporting – people increasingly expect you to report on an integrated basis. If a company moves to integrated reporting, the company secretary needs to have a lot more communication with stakeholders and needs to think about how to package and present the information so that the stakeholders can understand it easily.’
You must also have seen a lot of technological changes over the course of your career?
‘Yes. People expect a quicker response from the company secretary. Twenty years ago we had a shareholders’ hotline or a dedicated email address for enquiries – these days that is not enough. You need to respond to telephone enquiries promptly and answer emails within 24 hours. You also need to meet with stakeholders and invite them to meet the management. You also need to be more proactive; you need to go out and speak to your investors on governance issues.’
Where do you think these trends regarding the company secretarial role are heading?
‘Compliance is still the basic core, especially for listed companies, that’s what the company secretary is for, but I think that the role will evolve towards a management role. It makes sense for the company secretary to be involved in setting, as well as communicating, strategy. Otherwise, when you talk about your governance practices you don’t have a context for why you are promoting these practices to your investors.’
If company secretaries are too closely associated with management, is there a risk they will lose their value as independent advisers?
‘I don’t think so because independence is a mindset. If there are some conflicting views and interests among the directors and management, then you need to remind yourself that you are the company secretary and you have to be neutral and independent. You need to strike a balance. Actually, working as a company secretary is a balancing act; you need to balance the interests of everybody while remaining neutral so that people will know that you are trustworthy. I have always said that the most important thing for a company secretary is to earn the trust of your directors and the respect of management. Then you can do what you think is best for the company.
Being part of management helps you carry out your job. It means that you are not excluded from the formulation of strategy and determining issues such as what the critical ESG issues are that the company should tackle and how to capture ESG data.’
What about taking the further step of joining the board – do you think it would be difficult to maintain the neutrality and independence you have been talking about if a company secretary takes a board position?
‘I think becoming an executive director would “blur the line”. After all, directors need to seek the advice of the company secretary on their best interests – such as whether they are adequately protected by the company’s D&O policies. I have always thought that the company secretary should be a single, unique role. Some companies have combined it with the role of the CFO, the general counsel, or an executive director role, but I personally think that it is best just to be the company secretary. That way you can have a dedicated focus on the work that you need to do.
But there are no hard and fast rules on this issue. After I retire, the company secretary role at CLP will be combined with the general counsel role backed up by a deputy company secretary.’
What are your feelings about retiring from CLP?
‘Mixed feelings. I will miss my good colleagues and I will definitely miss my chairman; he’s such a gentleman. I will miss the job satisfaction here, but I think it is time to move to the next chapter. I am glad that I will have more time for other things. For example, I am very involved with the Hong Kong Breast Cancer Foundation. I would like to spend more time to promote breast health, in particular to underprivileged women. When you approach your retirement age, you find that you need to learn more. I have already found that I am inadequate in so many things. I need to learn computer skills, I need to get a coach for my golfing, I want to learn singing and also leave some time for travelling.’
When you were HKICS President, you emphasised the need for company secretaries to speak out – do you think that this message is a key part of your legacy for the profession?
‘Yes and I think the Institute’s voice is heard more these days, as evidenced by the many soft consultations that HKICS members are invited to contribute to by the Securities and Futures Commission and the Exchange before the publication of their public consultations. In recent years, we have also published a lot of research papers and guidance notes. These help to promote the voice of our members, and enhances our status and recognition in Hong Kong as well as globally.
Having said that, the Institute is looking for further improvements. In particular we need to reach a wider audience through channels such as TV, radio, newspapers and social media. When I was president, I did a lot of interviews and had a series of talks about governance matters on the radio. I hope we can do more of this.
Another legacy I would say is the establishment of the Corporate Secretaries International Association (CSIA), of which I was the first elected president.’
At the time the CSIA was set up, the Institute of Chartered Secretaries and Administrators (ICSA) was facing difficulties and it was a more internally-focused organisation. Now that the ICSA has relaunched itself with a global focus, do you think there is a potential overlap with what the CSIA was set up to do?
‘Being a member of ICSA, I am pleased to see the ICSA moving forward by opening itself up. But the CSIA does need to identify what its niches are. The CSIA needs to find how it can differentiate itself from the many other governance organisations in the world. I think the best way to do this is to pursue initiatives like lobbying the WTO to include the ‘corporate governance, compliance and secretarial advisory services’ listing in its ‘Trade in Services’ business classification listings. This initiative started when I was president of the CSIA and I do hope that the organisation will strengthen its cohesiveness and bring forward this initiative. It will be a long and difficult journey, but it will help to differentiate the CSIA from other governance organisations around the world.’
What do you think the big issues for corporate secretaries will be in the years ahead?
‘I think there will be three major issues. The first one will be the regulatory environment. There will be tighter regulation, more stringent listing rule requirements and more demands from stakeholders.
The second issue will be the changing expectations regarding ethics, values and codes of conduct. The ICAC has just done an opinion survey which looked, among other things, at people’s tolerance of bribery. The survey found that there was a higher tolerance level among younger people (those aged 15–24), when compared to that of the older generation (those aged 25–64). In fact, the younger group’s tolerance was almost double that of the older group. That’s very worrying. Professionals will need to address this issue in the years ahead, looking at questions such as – how can we rejuvenate the code of conduct under which we operate? What ethical standards and values should we uphold and embrace in order to be considered a professional and good company secretary?
The third issue will be keeping informed about the international trends in corporate governance. Company secretaries need to remain up to date with these trends and developments if they want to be considered professional and if they want to stay ahead of the game.’
April Chan was interviewed by Kieran Colvert, Editor, CSj.
SIDEBAR: Career notes
1981 – Admitted as an Associate of the Hong Kong Institute of Chartered Secretaries (HKICS)
1988 – Joined CLP Holdings as Senior Administrative Officer
1994 – Elected as a Fellow of the Institute of Chartered Secretaries and Administrators (ICSA) and HKICS
2004 – Elected a Council Member of the HKICS – served until 2014
2005 – Became Company Secretary at CLP Holdings
2009 – Elected President of the HKICS – served until December 2011
2010 – Elected Inaugural President of the Corporate Secretaries International Association (CSIA) – served until December 2011 and served on the CSIA Council and Executive Committee until December 2015
2013 – Named Asian Company Secretary of the Year by Corporate Governance Asia
2015 – Retired from CLP
SIDEBAR: Career notes
April Chan’s career has been defined not only by her professional work, but also the pro bono work she has done for the profession and other public service organisations. She has served as a director of the Hong Kong Coalition of Professional Services; an ‘Observer’ at the Independent Police Complaints Council; and a member of the Citizens Advisory Committee on Community Relations (CACCR) and the Mass Media and Education Sub-Committee of CACCR at the Independent Commission Against Corruption of the HKSAR.
Her work for the profession culminated in her presidency of both the Hong Kong Institute of Chartered Secretaries (HKICS) and the Corporate Secretaries International Association (CSIA). She has also served as Chairman of the HKICS Membership and Human Resources Committees, and the HKICS Company Secretaries Panel, Technical Consultation Panel and Special Entry Scheme Interview Panel.
She continues to serve as the Chairman of the HKICS Technical Consultation Panel and HKICS Appeal Tribunal (appointed in January this year), and as a member of the HKICS Special Entry Scheme Interview Panel. She also continues to serve both as a Council Member and Company Secretary for the Hong Kong Breast Cancer Foundation and as the Honorary Secretary of the Hong Kong Women Professionals & Entrepreneurs Association.