There are many routes into the Chartered Secretarial profession, but whatever route you take there are a number of key skills you will need to acquire. This month, senior Chartered Secretaries in Hong Kong give tips on how to reach the top of your chosen profession.
When Edith Shih, the top legal counsel and Company Secretary of Fortune 500-company Hutchison Whampoa Ltd, was at a dinner three months ago, she found herself sitting next to a university professor who seemed puzzled by her attendance. The scholar wondered why a secretary was at the VIP table. It took a while for the penny to drop that she wasn’t a typist, but a very senior executive at Hutchison, he admitted to Shih during later conversation.
Such misunderstandings are common among those with little business knowledge, which is why Shih believes that ‘board secretary’ (the term used in mainland China) would be a more apt title than ‘company secretary’ for this position (see ‘Time for a name change?’ on page 12 for more on this issue). In addition to the need to address the misunderstandings referred to above, there is also the argument that the job title needs to better reflect the changing job description of the company secretary, since the clerical, ‘secretarial’ functions of the role have diminished and the corporate governance advisory functions have increased.
The role of the company secretary has changed dramatically since Edith Shih, the current President of the HKICS, became Hutchison’s Company Secretary in 1997. ‘In those days, which wasn’t long ago, a company secretary was more of a clerical, mechanical person dealing with the drafting of minutes, resolutions and a lot of form filling and filing,’ says Shih. ‘The listing rules were fairly simple. Now the relevant legislation and regulation have expanded to cover many more aspects, such as the Securities and Futures Ordinance, anti-corruption, anti-bribery, anti-money laundering and the environment and social responsibility requirements. They all come under the heading of governance and the company secretary is expected to be a governance expert.’
Grace Wong, Company Secretary for China Mobile, has also experienced the changes to the company secretarial function during her career. She moved into the role after working for years in investor relations. Dealing with investors is often a key part of the company secretary’s portfolio. She organises roadshows, attends conferences and meets analysts, shareholders and institutional investors on a regular basis. That means Wong spends a lot of her time travelling, another change from the traditional company secretarial job description.
‘The role has changed greatly. In the beginning it was more related to compliance and serving the directors. Gradually it has changed and it’s interesting that you are involved in many other things,’ says Wong, who has been Company Secretary at the telecoms giant since 2005. ‘It’s now a senior role. We attend all the board meetings and work closely with the directors, including the independent directors. It’s not just all about compliance, filling in forms and acting as company registrar as it used to be. We’re involved in different things such as HR, accounts and even the sustainable development of the company.
Wong received a postgraduate diploma in corporate administration from Hong Kong Polytechnic in 2000, a qualification which she studied for in her own time.
China Mobile is not listed on the mainland’s exchanges, but is listed through ADRs (American Depositary Receipts) on the New York Stock Exchange, so she must ensure the company complies with requirements of the US Securities and Exchange Commission and prepare an annual report for the US, complying with that infamously onerous legislation – the Sarbanes-Oxley Act of 2002. She also has to file documents in Hong Kong, where China Mobile is listed and to various authorities in Beijing, where China Mobile’s parent is based.
‘It’s difficult because, apart from your daily job, you do need to keep abreast of what’s happening outside,’ she says. Young professionals must follow the media closely for changing regulations and trends, as well as attend seminars organised by the exchanges, legal and accounting firms and professional bodies such as HKICS.
‘There are a lot of events so you need to select carefully what is most suitable for you and your company,’ Wong says. Company secretaries must have a high awareness of confidentiality and also not be too timid since they will regularly face difficult issues which require them to speak out, she adds.
Since the career offers a wide variety of different aspects practitioners can focus on, Wong also recommends that aspiring company secretaries should identify and pursue the aspects that interest them most. ‘The job requires a lot of patience and if you are not interested in the work, it will be very difficult,’ she says.
Choose your route
Passing the International Qualifying Scheme (IQS) examinations and becoming a qualified Chartered Secretary is not the only route into the profession. In Hong Kong, qualified lawyers and accountants can also take up work as company secretaries. Edith Shih, for example, started as a lawyer in private practice, she joined an investment bank for two years and then moved into business development at Hutchison Whampoa. Shih says that her legal experience prepared her well for the challenge of being on top of corporate governance and compliance with ever-changing company rules and regulations. That said, however, she spent years working on the business side too, which helped equip her for her current role.
‘Not all lawyers have the necessary knowledge of corporate compliance requirements or the relevant business perspective. You can learn on the job and grow into it,’ she says.
Grace Wong’s route into the career was atypical. An English Literature graduate, she was a news anchor earlier in her career, later joining China Mobile to work her way up through the firm. She believes a stint with a corporate services firm is a good way to join the profession.
‘I didn’t have that experience. Working with corporate services will give you experience of different companies but not in-depth knowledge,’ she says. ‘If you’re determined and focus on one company, you need to learn a lot about the company and the industry and can prosper.’
Tricor Group employs some 700 people in their corporate services firm, servicing about 800 listed companies in Hong Kong, more than half of the city’s public companies. Natalia Seng, Chief Executive Officer, China & Hong Kong, Tricor Group, recommends spending at least three to five years with a corporate services firm as a good foundation to learn about international governance standards as well as the relevant legislative and regulatory requirements. Young professionals at Tricor, for example, will handle a portfolio with multinational clients which will give them a broad knowledge and diverse experiences.
‘You will have clients with different requirements so you learn. It’s interesting because you have to have a very broad knowledge base,’ Seng says.
April Chan, Company Secretary of CLP Holdings, agrees that a stint with a corporate services company is a good way for aspiring company secretaries to get broad experience. She cautions, however, that when practitioners seek work in the listed company sector, they should look for a company with good standing in corporate governance and a culture that is compatible with their own ethics.
‘You have to persevere in resisting any temptation to depart from the governance standards that you want to uphold,’ she says.
Respondents to this article emphasised that some form of Continuing Professional Development (CPD) training is essential for today’s company secretaries. ‘CPD will give you the basic nuts and bolts, the tools you need,’ Edith Shih says.
This may seem to be an obvious point, but as Natalia Seng points out some company secretaries are so busy doing their jobs that they like to stay within their comfort zone and forget to keep up to date with the issues that affect their career. Seng took an executive MBA in 2004 to broaden her horizons.
‘It’s a lifetime of learning,’ she says. Hong Kong, for example, has signed a lot of double tax treaties in recent years which need to be understood. ‘You’re not a tax professional but this is something you need to know,’ she says. ‘You have to understand on a continuous basis what are the changes in laws and regulations that affect your industry and business, Taking reference from OECD principles and guidelines on corporate governance and the latest international standards about anti-money laundering issues helps me to devise prudent and ethical business guidelines/ practices within our corporate services firm to ensure sustainable business development.’
Seng started back in the late 1970s by taking a three-year higher diploma course at Hong Kong Polytechnic, then she took the ICSA exam. No universities in the city offered such courses then, but demand for governance professionals was rising as Hong Kong’s economy morphed from manufacturing to services and the city established itself as an international financial centre.
CPD is now mandatory for all Chartered Secretaries in Hong Kong. The HKICS brought in its requirement for a minimum of 15 hours of CPD training for its members in August 2011 and this requirement has been backed up by a similar requirement in Hong Kong’s listing rules since 1 January 2012. In both cases, the implementation of this requirement is subject to transition arrangements set out on the HKICS and Hong Kong Exchanges and Clearing websites (www.hkics.org.hk and www.hkex.com.hk).
The Institute’s CPD programme has been expanding, particularly since the introduction of mandatory CPD. Last year (July 2012 to August 2013) the HKICS organised around 80 seminars, each with an average of 133 participants. The total number of participants attending HKICS seminars last year was 10,542. Moreover, the choices available to practitioners are not limited to the HKICS CPD offerings. Seminars run by the Law Society and Hong Kong Institute of Certified Public Accountants, together with those provided in-house by employers, mean that practitioners have an impressive scope of CPD training available.
As CPD has become increasingly accepted as an essential part of any professional career, it has expanded to include many non-core topics to help professionals improve their skills in diverse areas. CPD is not only about keeping up to date with regulatory and legislative changes, it can help with improving essential ‘soft’ skills such as communication skills and even how to interview for a job. Respondents to this article point out that, while communication skills might be seen as a ‘soft’ skill, it can no longer be considered an optional extra for company secretaries since the job requires practitioners to be the point of contact for most of the company’s stakeholders, as well as being responsible for good information flow between the board and management.
‘The company secretary needs to connect different business functions internally and different stakeholders externally,’ says Grace Wong. She points out that this means that company secretaries are continually dealing with questions raised internally and externally. ‘We may not be the ones who can provide the answer to all of those questions,’ she adds, ‘but we know where and how to retrieve the answers.’
For these reasons, the career requires you to have excellent interpersonal skills and the willingness to speak out when necessary. ‘In the old days, because it was mainly an administrative role, company secretaries could work comfortably in their offices’, says April Chan, ‘but these days you need a lot of communication with directors, managers and external parties. You need to go out and actively participate in the discussions and debates. If you are bold enough to go and speak at forums and public events, you can let your inner self out and dig deep into your own thinking.’
Going beyond the manual
While CPD is clearly central to staying informed and honing your soft skills, there will always be opportunities to learn on the job.
‘There are a lot of things’, April Chan points out ‘that can’t be learned from the books.’ She believes that early in a career it’s a good idea to get a mentor. ‘You have to learn on the job. You come across a lot of scenarios on the job and it’s good if somebody can point you in the right direction. Things can be dealt with in different ways, ending in different consequences. If they can help get you to the right destination at the right time, that helps a lot.’
There will also be times when the best guide will be your own conscience. ‘The company secretary is the conscience of the company,’ says Dr Davy Lee, Group Corporate Secretary of Lippo Group. He points out that company secretaries will face many challenges which are far more demanding than ensuring compliance with the rules.
‘A company secretary is not just a compliance officer, but a professional trained to look after the good corporate governance of a company,’ he says. ‘Company secretaries are trained to look after the interests of the stakeholders of the company, such as the shareholders, employees, customers and the investing public. Our profession demands a person of good business ethics.’
While CEOs may focus on profitability and performance, the company secretary’s role is to ensure that all plans meet good corporate governance standards, he adds. Fulfilling this role, however, takes a significant degree of tact. ‘Social skills’ are rarely mentioned in the context of company secretarial work, but Davy Lee points out that it’s always better to persuade rather than to confront company leaders on ethical issues, so learning how to advise on reputational and ethical risks is a skill that practitioners will need if they aim to reach the top of their chosen profession.
Dave Bannister, Journalist
SIDEBAR: Time for a name change?
The opportunities for company secretaries in Hong Kong have never been greater, but some members of the profession argue that one issue holding practitioners back is the ‘company secretary’ job title. This issue, as you might expect, is being debated widely and there are strong feelings on both sides of the debate.
The report published in May 2012 by the All Party Parliamentary Corporate Governance Group (APPCGG) in the UK – Elevating the Role of the Company Secretary – indicates that there is frustration with the existing title. Some respondents to the report, for example, argued that the existing title emphasises the administrative functions of the role and is holding company secretaries back from the opportunity to extend their remit and really take ownership of the governance agenda in their organisations.
However, those in favour of retaining the existing title point out that it is well established and understood among the profession’s closest stakeholders, and changing the title may be very divisive among members of the profession. They also point out that the term ‘secretary’ is attributed to very senior positions such as ‘general secretary’ or ‘financial secretary’, so it should not be assumed that ‘company secretary’ will be seen as synonymous with personal assistant. ‘When the cabinet secretary, the foreign secretary and the secretary general of the UN go in for re-branding, I will think about changing my mind,’ said one respondent to the APPCGG report.
Perhaps the greatest obstacle to the name change proposal is the lack of a consensus on an alternative. Some have suggested a title focused on the compliance function, but ‘compliance officers’ are relatively common in organisations around the world and while their job description may overlap that of the company secretary in the area of compliance, it does not include other aspects such as board support, investor relations, etc.
Perhaps a more likely contender is a title focused on ‘governance’. Suggestions in this vein include: ‘corporate governance director’, ‘corporate governance officer’ and ‘chief governance officer’. This last title already has some traction in the US where many companies have adopted the term ‘chief governance officer’ for their dual corporate secretaries/ general counsels. Just as with the compliance themed titles, however, the title focuses exclusively on one aspect of the company secretarial role.
In Hong Kong this debate has its own local characteristics. Firstly, being outside of the Anglo-Saxon environment practitioners here may be less wedded to the existing title than in the UK. Secondly, the profession in Hong Kong has ever closer ties to the profession in mainland China where the title ‘board secretary’ (董秘) is well established.
‘I think the title they use in mainland China is better,’ Edith Shih says. ‘People know where you are when you use the word “board”, otherwise you are the girl that sits outside the office, but obviously we are open to other, better and more representative titles.’
Do you support a change of job title for company secretaries? If so, what title would you propose to replace it? Join this important debate by emailing the CSj editor at: firstname.lastname@example.org.