A cocktail reception to celebrate 70 years of The Chartered Governance Institute and 25 years of The Hong Kong Institute of Chartered Secretaries in Hong Kong had to be cancelled last month. The three speakers lined up for the event share their reflections with this journal on the past and the future of the Chartered Secretary and Chartered Governance profession in Hong Kong and Mainland China.
Ada Chung FCIS FCS, JP, Registrar of Companies, Companies Registry, The Government of the HKSAR
I would like to congratulate The Hong Kong Institute of Chartered Secretaries (the Institute) and The Chartered Governance Institute on this double anniversary year. As a leading international financial and business centre, Hong Kong attaches great importance to corporate governance. For companies to be successful, competitive and sustainable in the long term, good corporate governance is the key. A high standard of corporate governance is not only essential for individual companies, it is also crucial for maintaining the credibility, stability and competitiveness of a financial market.
While the Institute is officially 25 years old, its origin can be traced back to the year 1949 when about 20 members of The Institute of Chartered Secretaries and Administrators (ICSA) – now known as The Chartered Governance Institute – gathered together to form an informal association. Over the years, members of the Institute and its international body have played a key role in fostering good corporate governance in Hong Kong, through various initiatives and series of professional talks and training courses.
To cite some examples, the Institute has been organising its biennial corporate governance conference since 1998 and its Annual Corporate and Regulatory Update since the year 2000. To keep members abreast of the latest developments affecting the business community and the profession, the Institute has jointly organised conferences with overseas countries and jurisdictions to bring together experts locally and internationally to share experience.
Another notable achievement of the Institute is its successful work with young people, including university and secondary school students. I commend the Institute’s foresight in nurturing the younger generation and its efforts in organising, for example, the Student Ambassadors Programme and the ‘Passing the Torch’ programme.
The Institute has also been promoting international standards in anti–money laundering and counter–financing of terrorism (AML/CFT). It launched its AML/CFT Charter in 2016. As you may be aware, since 1991 Hong Kong has been a member of the Financial Action Task Force (FATF), an intergovernmental organisation which sets global standards for combating money laundering and terrorist financing. Beginning in 2018 and lasting for over a year, the mutual evaluation of Hong Kong was undertaken by an assessment team comprising 10 experts from FATF and the Asia/Pacific Group (APG) on money laundering.
The Mutual Evaluation report of Hong Kong was examined by FATF at its June Plenary held in Orlando, US and by APG at its August Plenary held in Canberra, Australia. The report was published by FATF in September this year and it assesses the compliance and effectiveness of Hong Kong’s AML/CFT regime against international standards. It confirms that Hong Kong has a strong legal foundation and effective system for combating money laundering and terrorist financing. Hong Kong has been assessed, and is the first member jurisdiction in the Asia-Pacific region, to have achieved an overall compliant result. The assessment result is an affirmation of our community’s concerted efforts in upholding a robust AML/CFT regime. In this connection, I wish to take this opportunity to thank the Institute and its members for all your hard work on this front and your valuable support in the mutual evaluation exercise, in particular, during the on-site evaluation of Hong Kong in November last year.
As part and parcel of the government’s efforts in this regard, and with a view to further enhancing corporate governance and transparency, with effect from 1 March last year, all companies incorporated in Hong Kong are required under the Companies Ordinance to obtain and maintain up-to-date beneficial ownership information by way of keeping a Register of Significant Controllers. On the same date, a new licensing regime for Trust or Company Service Providers (TCSPs) commenced operation, with the Companies Registry taking up the role as the licensing authority. You may wish to know that up to the end of September, we have granted about 6,800 TCSP licences.
As you may be aware, currently there are more than 1.3 million companies registered in Hong Kong. In this year alone, up to the end of October, over 100,000 companies have been newly incorporated. In 2018, a total of about 3.6 million documents were delivered to the Companies Registry for registration. That amounts to a daily rate of nearly 14,000 documents, as compared to around 11,000 documents in 2017. Nothing could illustrate better than these figures the workload and importance of company secretaries. The huge number of documents which the Registry received shows firstly the importance of having all those documents/forms properly completed and filed in a timely manner to enhance transparency and in turn facilitate business; and secondly the importance of having a group of well-trained professionals to provide competent and proper advice to companies and their officers on the regulatory requirements whenever necessary.
In the 2018 Corporate Governance (CG) Watch report published by the Asian Corporate Governance Association last December, Hong Kong ranked first in Asia and second in the Asia-Pacific region for corporate governance. In September, the Global Financial Centres Index once again ranked Hong Kong among the world’s top three financial centres, behind only New York and London. In October, the World Economic Forum’s Global Competitiveness Report ranked Hong Kong third, up from last year’s seventh place. According to the World Bank’s Doing Business 2020 report, released on 24 October 2019, Hong Kong ranked third globally in the ‘ease of doing business’ category, moving up one place from last year.
I believe that good corporate governance, effective regulatory regimes and a high standard of professional services are essential factors contributing to these remarkable achievements in Hong Kong. It is vital that company secretaries continue to perform their critical role in upholding good corporate governance and ensuring proper compliance in an ever-changing business environment. I would like to thank the Institute for its continuous efforts in enhancing professional standards and promoting good corporate governance in Hong Kong.
Edith Shih FCIS FCS(PE), International President, The Chartered Governance Institute
This year we are celebrating the 70-year history of the Chartered Secretary and Chartered Governance profession in Hong Kong. We have come a long way, but I believe the most significant and strategic chapter in the history of our global institute is unfolding before us now.
The ICSA changed its name to The Chartered Governance Institute on 16 September 2019 and launched a new website and corporate identity on 5 November 2019. This historic change of our 125-year-old institute reflects and embraces how our global membership of governance professionals has evolved over the past decade. The ethos and new visual corporate identity encompass a wider remit to support and qualify Chartered Secretaries, governance advisers, risk and compliance managers and non-executive directors – basically anyone who takes on governance responsibilities in our increasingly regulated and risk conscious societies.
The new name positions The Chartered Governance Institute as the qualifying and membership organisation for anyone involved in governance, and it is the only such institute that is Chartered. Our global institute is the only international organisation that can offer qualifications which empower a person with skills that transcend borders. It facilitates the international movement of governance professionals, ensuring membership portability. The Chartered Governance Institute also sets the standards of the profession globally and defines the future of good governance.
As the International President, I commend the good work done by our China Division in Hong Kong and the Mainland, as well as our other eight divisions across the world from Australia, Canada, Malaysia, New Zealand, Singapore and Southern Africa, to the UK, Republic of Ireland and Associated Territories and Zimbabwe.
Governance standards and requirements are evolving rapidly and so is our profession. This evolution is irreversible, and is expanding and accelerating as well. All these present great opportunities for qualified governance professionals. I say with confidence that there has never been a better time to be a governance practitioner. If you are not yet a Chartered Secretary or Chartered Governance Professional and are interested in the profession, please get in touch with our Institute to find out how to become qualified.
David Fu FCIS FCS(PE), President, The Hong Kong Institute of Chartered Secretaries
Our profession has come a long way since 1949, the year that the first informal grouping of members of The Chartered Governance Institute was established. Whilst we celebrate our past with pride, we also look forward to the bright future of our profession. Our Institute has been working to better align our brand with the core value we bring to organisations – the achievement of excellence in governance. The majority of our members in Hong Kong and the Mainland have already transitioned to the dual Chartered Secretary and Chartered Governance Professional (CS/CGP) designation. Next up will be the transition to our new qualifying programme – the Chartered Governance Qualifying Programme (CGQP) – which replaces the International Qualifying Scheme (IQS) in January 2020 with an updated curriculum in applied governance, company law, corporate secretaryship and compliance, as well as a greater emphasis on risk management, strategy and boardroom dynamics.
Governance standards and requirements are evolving rapidly to enhance better controls, performance, transparency and sustainability of organisations, and so is our profession. The CGQP, our thought leadership reports and guidance notes, as well as continuing professional development training courses, will deliver the reinforced skill set governance professionals need in the ever-more dynamic and regulated business environment. We believe that these new strategic developments will enhance the capabilities of our current and future members, the quality of what we do and the value we bring to all stakeholders.
We cannot predict the future but we can prepare for it together. Whilst our Council is fully committed to steering our Institute towards the sustainable development of our profession in Hong Kong and the Mainland, we need the continual support of our members, our collaborative partners and stakeholders in different ways. May I extend our deep appreciation to your contribution to us in the past and reach out to you for your continuing help and support.
I would also like to take this opportunity to thank our sponsors and donors for their generous support. We established The Hong Kong Institute of Chartered Secretaries Foundation Ltd on 5 January 2012 as a company limited by guarantee and a registered charity under Section 88 of the Inland Revenue Ordinance. Its main objectives are to support education and research in the company secretarial and governance arena and publish reports and articles, organise or sponsor non-profit making training courses and educational programmes, as well as provide awards and scholarships to people in need to pursue studies in company secretarial and governance related subjects. Over the years, the Foundation has received donations and sponsorships from our members, graduates and students, friends and friendly organisations, and in particular the Companies Registry. To mark the 25th anniversary of the establishment of our Institute in Hong Kong, our Council has unanimously decided to donate HK$250,000 to the Foundation in support of its good work for the general public in the years to come.
Ada Chung, Registrar of Companies, Hong Kong Companies Registry; Edith Shih, International President, The Chartered Governance Institute; and David Fu, President, The Hong Kong Institute of Chartered Secretaries; were to speak at the HKICS Double Anniversary Cocktail Reception planned for 11 November 2019 at The Hong Kong Club.