Kenneth Jiang FCIS FCS(PE), Chief Representative, The Hong Kong Institute of Chartered Secretaries Beijing Representative Office, reviews the work of the Institute on the Mainland in the past year in serving listed companies, promoting corporate governance and facilitating the professionalisation of the board secretary.
This year marks the 20th anniversary of the establishment of the Hong Kong Special Administrative Region. For the past two decades, The Hong Kong Institute of Chartered Secretaries (the Institute) has witnessed Mainland China and Hong Kong develop and flourish. The Institute has been actively promoting good corporate governance and advocating the professional development of the board secretary on the Mainland, as well as gaining the support and recognition of listed companies and regulators in Mainland China and Hong Kong.
The Institute’s Beijing Representative Office celebrated its 20th birthday last year and organised various activities on the theme of ‘our mission, our road ahead’. This article intends to bring readers up to date on the work of the Institute in Mainland China over the past 12 months.
Affiliated Persons programme
The Affiliated Persons programme continued to gain the support of listed companies. Through recommendations by word of mouth, the programme attracted increasing numbers of board secretaries, or practitioners in a similar capacity, of red chip, A-share and to-be-listed companies besides alongside those from H-share companies. As at 30 June 2017, the Institute had 168 Affiliated Persons from 125 H-share companies; 28 red chip companies; seven A-share companies and to-be-listed companies; and eight non-listed companies. A total of 43 Enhanced Continuing Professional Development (ECPD) seminars were organised, with attendees of over 5,000. The seminars attracted not only board secretaries but also directors, supervisors, staff of the board secretary’s office and other senior managers. Currently, Affiliated Persons, directors and senior managers, and staff of the board secretary’s office each account for one-third of the participants of ECPD seminars. The objective of these seminars is to provide board secretaries with updates on regulatory trends and engage in discussions on practices, and to raise the awareness among directors, supervisors and senior managers of good corporate governance, as well as to enhance their recognition of the importance of the board secretary role. The ultimate purpose is to promote the effective exercise of the corporate governance function of the board secretary and to raise the governance standards of listed companies. These seminars have become choice programmes for practitioners on the Mainland, attracting an ever growing audience.
The Institute continues to provide services in professional research as well as sharing and communication for Affiliated Persons, helping to solve problems in the daily work of board secretaries. In 2014, the Institute collaborated with the Board Secretary Committee of the China Association for Public Companies (CAPCO) to prepare a report on the Amendment of the Prerequisite Clauses for the Articles of Association of Companies Seeking Listings Outside the PRC, and submitted the report to the China Securities Regulatory Commission. Over the past year, the Institute collected signatures of H-share companies in support of the above amendments and passed them to CAPCO for submission, together with the amended report, to the Legal Office of the National People’s Congress to promote the adoption of the amendment.
Every year, regular meetings of the five Regional Board Secretary Panels in Beijing, Shanghai, Shenzhen, Guangzhou and Southwestern Region (Chongqing and Chengdu) are convened to discuss hot topics, and to promote communication and experience sharing among regional board secretaries. Five Regional Board Secretary Roundtable sessions were held this year in Hong Kong, Beijing, Shanghai, Guangzhou and Chongqing, during which discussions were held on the topic of shareholder communications. Over 120 people attended.
In May 2017, the Institute was invited by China Huarong Asset Management Co Ltd to conduct training for its directors, supervisors and senior managers on the continuing obligations and duties of directors of listed companies in Hong Kong, as well as the regulation and best practices in Hong Kong regarding inside information. The training was welcomed by the participants. This is a new initiative of the Institute in respect of career specific services.
Opening up broad-based intensive cooperation with the Mainland
Following the conclusion of Memoranda of Understanding since 2011 with the Shanghai Stock Exchange, Shenzhen Stock Exchange, CAPCO and the Insurance Association of China, the Institute has maintained close cooperation with these parties in discussions on corporate governance, training, professional interchange and resource sharing in various aspects . By June 2017, the Institute had co-organised with the Shanghai Stock Exchange six rounds of training for board secretaries of A+H share companies. The third training programme for corporate governance practitioners in collaboration with the Insurance Association of China will be held in Hong Kong in October this year.
This year, the Institute was also one of the organisers of the Stock Connect – Shanghai Corporate Access Day, fulfilling its role as an international professional body in assisting with dual listing on the Mainland and Hong Kong. Over 200 representatives from 80 Hong Kong-listed companies and Mainland securities companies participated in the event.
Technical consultation panel on the Mainland to be set up for networking and professional exchange
To reflect the views of Hong Kong-listed Mainland companies on the consultation papers issued by regulators in Hong Kong and to study practical issues faced by board secretaries on the Mainland, the Institute intends to set up a technical consultation panel on the Mainland this year. Comprising Mainland members or Affiliated Persons, the panel will be mainly responsible for:
- discussing and giving comments on legislation and regulatory policies promulgated by the government and regulators in Hong Kong in relation to professional skills and practices of board secretaries,
- considering professional and technical issues raised by Mainland members or Affiliated Persons and providing professional advice,
- coordinating the efforts of Mainland members or senior Affiliated Persons acting as board secretaries to discuss and compile guidance notes and conduct experience sharing to meet the practical needs of board secretaries,
- when appropriate, assisting the Institute in lobbying for recognition of the professional status of the board secretary by the government or regulators,
- providing support to the conferences and ECPD seminars for Affiliated Persons organised by the Institute, and
- representing the Institute in liaising with relevant bodies on the Mainland regarding areas of interest to members and Affiliated Persons.
New qualifying route – master in corporate governance programme
Chartered Secretary qualifying examination test centres have been set up in Beijing and Shanghai for the convenience of Mainland students. Since September 2016, in collaboration with The Open University of Hong Kong, the Institute has been offering the first accredited master in corporate governance programme in Shanghai. This is a distance learning course supplemented by a weekend face-to-face tutorial session every month. Students who complete the programme can apply for credits in the Master in Corporate Governance programme of The Open University of Hong Kong. After further studying in Hong Kong, students can get a master degree in corporate governance. Holders of this degree are eligible to apply for full exemption from the qualifying examination of the Institute. After accumulating sufficient working experience, candidates can apply for membership of The Institute of Chartered Secretaries and Administrators and the Institute here in Hong Kong. The second programme in Shanghai will commence in September 2017.
Tougher regulation in the major capital markets of the world has evolved into the new normal after the global financial crisis. New governance requirements include strengthening the regulation of risk management and information disclosure; enhancing the supervision of directors’ and senior managers’ performance of their duties; and promoting shareholder engagement and shareholder communications.
The governance roles and functions of the company secretary have also been clarified, and the importance of corporate governance has become more evident. With the further reform and opening up of the Mainland capital market, the implementation of the One Belt and One Road strategy and further interconnection between the Mainland and Hong Kong, there will be rapid growth in the demand on the Mainland for high quality corporate governance professionals, such as board secretaries, who have an international vision and possess professional expertise. There will therefore be huge development potential for Chartered Secretaries on the Mainland. The Institute will make the most of this trend and explore professional reforms to adapt to these new developments in corporate governance. As usual, the Institute will provide support and assistance to the professionalisation of Mainland board secretaries, and contribute to the enhancement of corporate governance standards on the Mainland and Hong Kong and to the training of more quality corporate governance professionals.
Kenneth Jiang FCIS FCS (PE),
The Hong Kong Institute of Chartered Secretaries Beijing Representative Office
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