This ‘Know your Institute’ series of articles has tracked the evolution of the Chartered Secretarial profession in Hong Kong over the last 65 years and has sought to familiarise readers with the work of the Hong Kong Institute of Chartered Secretaries in this anniversary year for the Institute. This concluding article in the series looks ahead to what the future might hold, both for the Institute and the profession.
Attempting to predict the future is a notoriously risky business, particularly over long-term horizons. Unexpected events have a habit of catching everyone by surprise. With that caveat, however, respondents to this article identify three trends which, at least in the near-term, look set to characterise the years ahead for both the Institute and the profession.
1. The governance trend
Corporate governance advice has become a ‘headline’ part of the services provided by corporate secretaries. This is part of the historical trend which has seen corporate secretaries become increasingly responsible for trusted advisory services to the board – in addition to the administrative tasks, such as organising meetings and keeping company records, which first characterised the role. Respondents to this article believe that corporate governance will continue to rise in the corporate and regulatory agenda, and that corporate secretaries are ideally placed to benefit from this trend.
‘I believe corporate governance, as an area, will continue to become prominent,’ says Paul Moyes FCIS FCS, Chair of the Professional Services Panel, ‘and I see a very bright future for anybody who is involved in that area, whether for listed companies or for other regulated businesses.’
Susie Cheung FCIS FCS(PE), Chair of the Membership Committee, agrees. ‘The future is bright. There is a greater and more active role for company secretaries to play and how effective we are going to be, and how relevant to society, will depend on how much we want to play that role. I think we are establishing ourselves as the guardians of corporate governance.’
Polly Wong FCIS FCS(PE), Chair of the Education Committee, adds that the related issue of sustainability will be one of the key criterion for the future success of companies in Hong Kong. ‘The role of the corporate secretarial profession will be increasingly critical in the coming decades for the sustainable development and success of corporations,’ she says.
Respondents acknowledge, however, that there will be challenges ahead. Research carried out by the Institute into the roles and responsibilities of company secretaries in Hong Kong’s listed companies (see ‘The Significance of the Company Secretary in Hong Kong Listed Companies’ on the HKICS website: www.hkics.org.hk), found that the importance attached to the corporate governance advisory role still depends on the standing of the company secretary and the attitude of directors, particularly the chairman, towards him or her.
HKICS President Edith Shih FCIS FCS(PE) believes that the Institute and individual Chartered Secretaries should work hard to ensure that this great opportunity for the Institute and the profession is not lost. ‘New horizons have opened up bringing new opportunities for the profession. We must work towards establishing the company secretary position as de facto chief governance officer. In this way we can continue to grow,’ she says.
2. The growth trend
The increasingly complex regulatory environment companies operate in today has both increased the demands on, and the demand for, corporate governance professionals. This trend, along with the demographics in Hong Kong and Mainland China, has seen the Institute become the fastest growing division of The Institute of Chartered Secretaries and Administrators (ICSA).
‘I first joined the Institute in February 1995 and since then our membership has grown from about 3,000 to over 5,800, and our student numbers have been maintained at over 3,000 annually,’ says Louisa Lau FCIS FCS(PE), HKICS General Manager and Company Secretary. ‘I have seen growth in almost every aspect of the Institute’s work. In 2003 we had eight staff members in Hong Kong – today we have 30 staff in Hong Kong and four in Beijing.’
The Institute’s relationship with Mainland China will play an important part in maintaining that growth trajectory. ‘This aspect of our work is very important,’ says Edith Shih, ‘and we will continue to work closely with our contacts on the Mainland with a view to mutual recognition. They will need to set up their own professional examination and qualification system but we will be extending whatever help we can with that.’
‘Mainland China offers a lot of opportunity for our Hong Kong members,’ HKICS Chief Executive Samantha Suen FCIS FCS(PE) points out. ‘There is a huge demand in the Mainland for governance professionals. Regulators in China are keen to encourage more self-regulation by companies, while at the same time raising the bar in terms of governance standards. The HKICS, as ICSA’s China Division, will speed up its efforts to promote the profession in Mainland China.’
Kenneth Jiang FCIS FCS(PE), the Institute’s Beijing Representative Office Chief Representative, agrees. He points out that Hong Kong members with the necessary language and professional skills are well placed to enter the Mainland China market. ‘As the fast-growing Mainland capital market continues to converge with its international counterparts, the need for corporate governance professionals with international perspectives keeps growing,’ he says.
The Institute’s stakeholder network on the Mainland has provided a good platform to improve the awareness and knowledge among Hong Kong members about the regulatory and business environment in the Mainland. Last year the Institute launched its ‘PRC Corporation Practices’ executive diploma programme in collaboration with HKU SPACE.
The Institute’s Mainland China work takes time and financial resources, but Edith Shih believes that this is a wise investment. ‘China is a very big market and it is our future. Our China work is not just a matter of developing that market, it is also for our own survival. We have to use our resources very carefully, but it is an expense that will provide a good return, perhaps not a monetary one but certainly a return for the profession in due course which will benefit our members, the corporate arena as well as the community.’
3. Expanding horizons
Another trend, which has been particularly evident in the last decade, has been the closer ties between corporate secretarial professional bodies around the world. The Institute played a key part in the formation of the Corporate Secretaries International Association (CSIA) in March 2010. The Institute was a founding member of the CSIA and April Chan FCIS FCS(PE), HKICS Past President, was its founding president.
Of course, as part of the ICSA, the Institute has always been linked to the global profession, but the ICSA itself has become a lot more globally minded in recent years. Recent structural reforms have given proportional representation to the ICSA divisions on ICSA Council. As the ICSA China Division, the Institute now has two representatives on ICSA Council – President Edith Shih (who was also elected ICSA Vice-President and Executive Committee member earlier this year) and Past President Natalia Seng FCIS FCS(PE).
Respondents to this article believe that this trend, together with the trend for practitioners to take on a corporate governance advisory role, is leading to a closer identification of the corporate secretarial role with corporate governance. Where this trend will lead the profession is hard to say – will we be seeing more ICSA divisions deciding to use the term ‘governance’ in their names?
Earlier this year the Australian division of ICSA changed its name to the ‘Governance Institute of Australia’.
Whatever decisions are made regarding the name change issue, the profession is taking a broader perspective of the work of its members – whatever their specific designation. This trend is already apparent in the decision by the ICSA to broaden the curriculum of the Chartered Secretarial qualification to make it more relevant to those members of the profession who are not corporate secretaries.
‘We have found that there are a lot of lawyers who want to become members, a lot of risk managers, compliance managers, internal auditors, tax people and even directors find our qualifications have value,’ said ICSA President Frank Bush FCIS in interview with CSj recently. ‘We have to recognise those different roles and we do so by introducing additional subjects to our curriculum that are more oriented towards some of those specific job descriptions.’
SIDEBAR: Panel in focus: Company Secretaries Panel
History: The Company Secretaries Panel (CSP) was set up in November 1994.
Remit: The CSP consists of 18 company secretaries from major listed companies in Hong Kong. They combine to represent a third of Hong Kong’s market capitalisation. The CSP promotes the Institute’s relationship with listed issuers, regulators and the government. CSP members also contribute to consultation topics with regulators and the government.
Membership: Edith Shih (Chair); April Chan; Hamilton Cheng; David Fu; Eric Ip; Nereid Lai; Timon Liu; Joseph Mau; Neil McNamara; Gillian Meller; Patrick Ng; Paul Stafford; May Tsue; Terry Wan; Bill Wang; Grace Wong; Eirene Yeung; Louisa Yuen.
SIDEBAR: Panel in focus: Professional Services Panel
History: The Professional Services Panel (PSP) was set up in November 2004.
Remit: The PSP consists of 12 senior practitioners from the trust and company service providers sector. It provides support and guidance to members of the profession who provide professional services to clients, as opposed to working as in-house company secretaries. The PSP is currently working on anti-money laundering and counter-terrorist financing issues. It is also looking at the implications of the changes brought in by the new Companies Ordinance. The PSP also handles the Institute’s relationship with the Companies Registry through the Companies Registry’s Customer Liaison Group.
Membership: Paul Moyes (Chair); Paul Campbell; Frances Chan; Loretta Chan; Edmond Chiu; Katherine Chiu; Teresa Lau; Liza Murray; Mabel Ng; Dr Maurice Ngai; Natalia Seng; Alberta Sie.
SIDEBAR: The HKICS at 65+20: what do members think?
Respondents to this series of articles (in alphabetical order) reflect on the past and look forward to the future in this double anniversary year.
‘Since I joined the HKICS, I have seen the Institute grow much stronger. This has a lot to do with what’s happening in society around us, in particular the demand for higher standards on the compliance side and the corporate governance side, but the Institute has also been good at picking up on this opportunity.’ Susie Cheung, Chair of the Membership Committee
‘This year has been a time for celebration in relation to the achievements of the last 20 years. With the inevitable tide pushing all walks of society towards, and converging upon, good governance, this is also a time to plan and look forward to continuing to push good governance to the forefront of decision makers and to assist with regulatory developments which I hope to contribute a part to.’ Mohan Datwani, Director, Technical and Research
‘In my view, the Institute does seem to be going from strength to strength. The number of new members we are receiving each year is growing. I think our prominence is growing because corporate governance is such an important business area and our roles and responsibilities have very much been brought to the front of decision making. I think we are very well placed as the future governance professionals in China.’ Paul Moyes, Chair of the Professional Services Panel
‘I would like members to think about what they can do for the Institute and about what the Institute can do for them. There are many ways members can get involved. That might take the form of attending a seminar or one of the Institute’s functions or activities. It might be signing up to become a mentor for our students or providing funding for our Chartered Secretarial Foundation, but I would encourage members to become more active participants in the Institute’s work. Getting involved is not just about making our Institute stronger, it is also about giving members the opportunity to be a part of our work and feel an affinity with the Institute – that is surely better than sitting around waiting for things to happen.’ Edith Shih, HKICS President
‘The world is changing. Globalisation, technology, information flow, demographics, new regulations and crossborder activities will bring challenges for businesses and professionals, but they will also bring opportunities. We should address these new challenges and capture this window of opportunity to make the HKICS the leading professional institute in governance in Greater China – that is, Hong Kong, Mainland China, Macau and Taiwan.’ Samantha Suen, HKICS Chief Executive
‘The board secretary is becoming more and more important as the demand in the capital markets for good corporate governance increases. At the same time, with the internationalisation of the economy and the opening up of the capital markets in the Mainland, the Institute will have a rare opportunity for development. In the future, the Institute will be of unique significance in promoting the development of corporate governance and professionalising the board secretary in Mainland China.’ Dr Gao Wei, HKICS Vice-President
‘This year marks a milestone anniversary for the Institute that symbolises the well-established and deep-rooted standing of the Institute as a professional body in Hong Kong. Also, this is a time for the Institute to launch new initiatives for sustainable development and success in the years ahead.’ Polly Wong, Chair of the Education Committee
‘It has been great to witness the growth of the Institute and the Chartered Secretarial profession over the years. With the increased complexity in regulations there has been an increasing demand for governance professionals, but our growth has also been largely due to the contribution of members and their efforts in promoting the profession.’ Candy Wong, Director of the Education and Examinations Department