Against a backdrop of rising demand in the Mainland for high-quality governance professionals, Kenneth Jiang FCIS FCS(PE), Chief Representative, The Hong Kong Institute of Chartered Secretaries (the Institute) Beijing Representative Office, reviews the work of the Institute to develop the profession and promote good governance in the Mainland.
The year 2018 marks the 25th anniversary of the listing of H-share companies in Hong Kong. For 25 years, the Institute has been assisting the development of the capital and securities markets of the Mainland in pursuit of the mission to promote good corporate governance and facilitate the professionalisation of the board secretary. Amidst great changes in the past year in the corporate governance landscape internationally, in the Mainland and in Hong Kong, the Institute has forged ahead with its work. Professional development in the Mainland has embarked on a new journey and further progress has been attained on various fronts.
Growth in numbers of affiliated persons, students and members
Thanks to the efforts of the Institute in the Mainland over the years and the large number of new economy enterprises listing in Hong Kong following the reforms to Hong Kong’s listing regime, the professional qualification awarded by the Institute is increasingly recognised by listed companies and regulators in Hong Kong and the Mainland. The numbers of students and members of the Institute have been growing steadily. As at 31 July 2018, the Institute had 255 students and 50 members in the Mainland, representing a year-on-year growth of 54% and 38% respectively. The number of affiliated persons was 168, a growth of 2% over that in 2017.
To facilitate sharing among affiliated persons, students and members, regular meetings of the Regional Board Secretary Panels in Beijing, Shanghai, Shenzhen, Guangzhou and the Southwest (Chongqing and Chengdu) are held every year to discuss topical issues. These promote professional exchange and experience sharing among practitioners, including board secretaries, in the region. This year, five meetings of the Regional Board Secretary Panels were held in Hong Kong, Beijing, Shanghai, Shenzhen and Chengdu, bringing together local practitioners, including board secretaries, to discuss the board secretary practices under the tightened regulations on directors and senior management. Over 125 participants joined the meetings.
In view of the great demand in the Mainland for high-quality governance professionals, and to allow more candidates interested in the profession to get the qualification, the Institute, in addition to administering International Qualifying Scheme (IQS) examinations in the Mainland, launched the Postgraduate Programme in Corporate Governance in collaboration with the Open University of Hong Kong. This distance learning programme aims to train more Mainland-based corporate governance professionals with an international outlook. 17 students from the first intake have already graduated. The 32 students of the second intake have completed the first year of the programme. Close to 40 students have registered for the third intake. With new economy enterprises coming to list in Hong Kong and the importance they attach to corporate governance, more and more people in the industry are beginning to realise the importance of the Chartered Secretary qualification and start the quest for this international professional qualification. It is believed that in the near future, there will be more corporate governance professionals with the Chartered Secretary qualification serving listed companies in the Mainland, working towards enhancing the governance of listed companies.
Supporting board secretaries
As an integral component of the affiliated person(AP) programme, the Institute hosts regular Enhanced Continuing Professional Development (ECPD)seminars every year in Hong Kong and the Mainland for affiliated persons. As at 31 July 2018, a total of 46 sessions have been held with a total attendance of over 5,500. In the 2017/2018 financial year, four sessions were organised, with an attendance of 555. The proportion of non-affiliated persons (mostly directors, senior management and related personnel) participating in the seminars has grown, accounting for more than 77% (about 74% in 2016/2017) of attendees. This shows the increasing recognition of the professional standard of the Institute and the growing importance attached to corporate governance and continuous practical training by affiliated persons and their companies.
The Institute continues to provide research support for affiliated persons and board secretaries at large, providing assistance in resolving practical issues encountered by board secretaries. In 2012, the Institute collected the views of affiliated persons and members, and drew up the Guidelines on Practices of Inside Information Disclosure of A+H Companies. What is unique about these guidelines is that the implementation and application of rules was for the first time incorporated into the internal control system of companies and translated into management workflows and KPIs. The guidelines have attracted considerable attention in the industry. This is the result of collaboration among board secretaries and company secretaries in the Mainland and Hong Kong respectively, and is a summary of the governance experience of board secretaries in the Mainland.
In 2014, the Institute and the Board Secretary Committee of the China Association of Public Companies (CAPCO) set up a joint working group on the amendment to the Prerequisite Clauses for the Articles of Association of Companies Seeking Listings outside the PRC, and submitted a report to the China Securities Regulatory Commission (CSRC). In response to the call of listed companies and at the request of CAPCO, the Institute collected signatures of H-share companies in support of the above amendments. These were submitted, together with an updated report by CAPCO, to the Legal Office of the National People’s Congress to promote the adoption of the amendments. The CSRC has started work on the amendments of the Prerequisite Clauses ahead of the amendments to the Securities Law.
In 2017, the Institute set up the Mainland Technical Consultation Panel to pull together the efforts of board secretaries of companies listed in Hong Kong to solve their practical problems, give practical guidance, and provide research support for the policy decisions of regulators. Research on three topics commenced in June this year: updates to the Guidelines on Practices of Inside Information Disclosure of A+H Companies, compilation of Guidelines on Practices of Connected Transactions for A+H Companies, and regulatory practices for Shanghai Connect and Shenzhen Connect. Research on the three topics is in progress and is expected to be completed by the end of this year or early next year.
Networking and collaboration with stakeholders
Since 2011, the Institute has signed Memoranda of Understanding (MoU) with the Shanghai Stock Exchange (SSE), the Shenzhen Stock Exchange (SZSE), CAPCO and the Insurance Association of China (IAC) to strengthen collaboration with various parties in research, training, information exchange and resources sharing in respect of corporate governance. These MoUs have allowed the Institute to promote the principles and practices of good corporate governance to wider groups, and to facilitate the professionalisation and enhance the status of the board secretary.
By now, the Institute has held eight sessions of ECPD training for A+H share companies in collaboration with the SSE, and three sessions of professional training on corporate governance for board secretaries and related senior management of insurance companies in the Mainland in collaboration with the IAC. Widely welcomed by participants, these collaborative training programmes have met the objectives of resources sharing, using complementary expertise, and enhancing the corporate governance standards of companies in the Mainland.
In 2018, the Institute has also linked up with Zhongguancun Science and Technology Park in Beijing and the management committee of Zhangjiang Hi-Tech Park in Shanghai. Possibilities are being actively explored to help new economy enterprises, especially those intending to list in Hong Kong, improve their corporate governance systems. In collaboration with various parties, the Institute will provide timely training on listing matters, facilitating the listing of new economy enterprises in Hong Kong.
Promoting relevant research and board secretary professionalisation
The Institute has all along striven to promote the principles and practices of good corporate governance in Hong Kong and the whole of Mainland China. Its target for the Mainland is to promote the development of the board secretary profession, and establish and develop the corporate governance profession in the Mainland.
With the growing importance attached by listed companies and regulators globally to corporate governance, the wide recognition of the importance of the board secretary in corporate governance and the fast growth in the number of listed companies, market demand for quality board secretaries is great. Members of the Institute, being corporate governance experts with an international outlook, have very good career prospects.
Kenneth Jiang FCIS FCS(PE)
The Hong Kong Institute of Chartered Secretaries Beijing Representative Office