The 13th Biennial Corporate Governance Conference (CGC) 2022

The Hong Kong Chartered Governance Institute (HKCGI) (香港公司治理公會) organized the 13th Biennial Corporate Governance Conference (CGC) on 23^rd Sep 2022. The theme is “Repurposing in Changing Times – the Company, Governance and the Governance Professional”. FHKI has free online ticket for advisors and members in Compliance Committee. I was one of them to attend the online meeting. 

In the beginning, Mrs. April Chan (Past President and Chairman, Technical Consultation Panel, HKCGI) gave welcoming address. She surveyed participants’ preference and found that 50% like hybrid mode (Physical and Online) conference arrangement.

Then Mr. Ernest Lee (President, HKCGI; Technical Partner, Deloitte, China) gave welcoming remark. He introduced conference aim and topics.

The guest of honour Mr. Nicolas Aguzin (CEO, Hong Kong Exchanges and Clearing Limited) gave a speech and he said ESG journey in good corporate governance and became corporate DNA.

Session One: Tackling Climate Change

The first speaker in session one was Ms. Tereasa Ko (Senior Partner, Hong Kong and China Chairman, Freshfields Bruckhaus Deringer; Co-Vice Chair, IFRS Foundation) and her topic named “The pressing issue of our times – climate change and harmonizing reporting standards”. She introduced sustainability reporting and ISSB standard for developing global baseline.  Finally, she concluded three key points.

i)         ESG is not just paper work. It needs implementing in each company and integrated into operation.

ii)       No longer accepted just claimed sustainability (No lip service).

iii)      Following the work of ISSB standards which will be accepted by HKEX.

The second speaker was Mr. David Simonds (Chief Strategy, Sustainability and Governance Officer, CLP Holdings Ltd) and his presentation entitled “Climate change governance - challenging yet rewarding”.  Firstly, he discussed about consumer changing to stand up for ESG.

Lastly, Mr. Simonds briefed CLP governance framework that including Sustainability Committee in Board level and establishing Sustainability Executive Committee in management level. For working level, they had department, group function and business unit, as well as Group sustainability forum.

Before end of session one, panel discussion was performed. The chairlady Ms. Gillian Meller surveyed participants and obtained following response.

-          94% participants (141) agreed that Hong Kong company directors need to consider ESG matters to properly discharge their fiduciary and statutory duties.

-          85% agreed that organizations should consider the risks (and opportunities) posed by climate change and allocate resources to address these.

-          61% said their company have a strategy to decarbonize their business.

Session Two: Harnessing Technology

The first speaker in session two was Mr. Adam Stuckert (Group Chief Digital Officer, Tricor Group) and his topic entitled “Harnessing technological advances”. In the beginning, he showed us a survey that 97% feedback agreed pandemic accelerated digital transformation.  Then he discussed to develop digital experiences.

Finally, Mr. Adam Stuckert concluded in three key points. The first point is pace of change that increasing the change and adopt the digital technology. The second point is customer focus especially their digital experience. The third point is foundations including security of data and system.

The second speaker in this session was Mr. Kok Tin Gan (Partner, PwC Hong Kong) and his topic named “Managing technology related risks”. He firstly pointed out 50% of CEOs concerned about cyber risks. Threat actors continue to innovate at unprecedented pace and scale.

Mr. Kok Tin Gan also added Hong Kong organizations should be aware of the increased sophistication of cyber threats because of the accelerated remote work practices due to COVID-19. Then he introduced a robust cyber governance structure.

Session two panel discussion also performed some survey and the result summarized as follows.

-          86% of participants think the pace of technology change is increasing in 2022 after the COVID-19 pandemic.

-          Bell shape was observed about confident that your organization is sufficiently managing and mitigating cyber risks. Assumption: C-suites and board members should set their company’s culture and tone for brand and reputation protection via a cybersecurity framework.

-          57% response that their organization have a Data Protection Officer (or similar role).

-          78% didn’t agree AI would replace human decision-making.

-          67% agreed that there would be a need for a board of directors with the onset of blockchain-based corporate governance.

Session Three: Welcoming Diversity and Inclusion

The first speaker in session three was Mr Nicholas Allen (Chairman and Independent Non-Executive Director, Link Asset Management Ltd) and his presentation entitled “Diversity and inclusion – need to be real and now”. In the beginning, Mr. Allen discussed about individuals to make the sacrifices necessary for the earth and the role of corporate on carbon offset.

Then he proposed three rules including diversity of board members, educating and developing our workforces, as well as, walk the talk culture. Lastly, Mr. Nicholas Allen discussed the right people in place through the four steps and they were corporate intolerance for certain behavior, green leases, genuine education and realistic views.

The second speaker was Ms Bonnie Y Chan (Head of Listing, Hong Kong Exchanges and Clearing Limited) and her topic was “A regulatory concern – and achieving practical regulations”. Ms. Chan firstly briefed their milestone of diversity policy from 2012 to 2022. Then she introduced new rules on diversity.

Finally, she mentioned to build an inclusive corporate culture. HKEX believe “Diversity, as one of the five core values at HKEX, is a critical component of business success, long term sustainability and that it is crucial for societal resiliency and prosperity. We are committed to the vocal advocacy of diversity in all that we do.”

The third speaker was Mr. Nicholas Chilton (Head of Board Advisory, South Pacific, Nasdaq) and his topic named “Diversity Equity & Inclusion an International Overview”. In the beginning of the talk, he discussed some key positive and negative trends.

Then Mr. Chilton discussed some statistics about women on boards and there were separated into hard and soft mandate as well as no mandate in different countries in the world. He finally concluded that culture is key to defining diversity as material to the organization.

Session Three Panel Discussion was performed afterwards.

During the discussing, Ms Edith Shih introduced the board matrix to exam the corporate’s board diversity.

Then they discussed some survey results from participants and showed as follows.

-          44% under active consideration and 38% not need because they had already met the new HKEX requirement for independence and diversity.

-          56% participants voted less than 16% women in their board.

-          52% agreed that it is important for a board to be diverse in both gender and race.

-          67% selected diversity of socioeconomic background aside from gender.

-          53% believed by regulation/laws to incentivize good behaviors towards temperature rise within 1.5 degree Celsius.

Session Four: Enhancing Hong Kong’s competitive advantage

Prof. Frederick Ma Si-hang GBS JP (Chairman, FWD Group Holdings Ltd) was session chair and introduced speakers in the session.

The first speaker was Mr Joseph H L Chan JP (Under Secretary for Financial Services and the Treasury, The HKSAR Government) and his presentation topic named “The positioning and development strategies of Hong Kong as an International Financial Centre”. Mr. Chan briefed Hong Kong’s strengths in four dimensions to be international financial centre.

Moreover, we are leading in Asia across capital markets, insurance business, and asset & wealth management business said by Mr. Joseph Chan. Lastly, he introduced five-pronged approach for FinTech development in Hong Kong.

The second speaker was Mr Amar Gill (Managing Director, Head of APAC Investment Stewardship, BlackRock) and his topic entitled “Hong Kong’s governance leadership - ESG and beyond”. In the beginning, Mr. Gill overviewed global sustainable fund industry and discussed Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

At the end, Mr. Amar Gill suggested ten recommendations for Hong Kong to be a true International Financial Centre.

Session Four – Panel Discussion

Group photo of the session

Corporate Governance in Conversation: Repurposing company reporting

Mr Peter Greenwood (MA FCG HKFCG) was session chair and introduced Prof. Mervyn King.

Prof. Mervyn King SC (Chairman Emeritus, The International Integrated Reporting Council (IIRC)) was the last speaker in the conference. He discussed the major changes in the governance and its impacts.

At the end, Mrs. April Chan (Past President and Chairman, Technical Consultation Panel, HKCGI) gave closing remark.

Reference:

HKCGI - https://www.hkcgi.org.hk/

FHKI – https://www.industryhk.org/en/

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