It’s 1993. Five partners stare at each other as they sit around a conference room table at lunchtime, bowls of wonton noodles steaming in front of them, and think about ways to expand the firm’s services beyond traditional audit and tax. One of them, Johnson Kong, had just come up with an idea. “I opened up my mouth and said, ‘Why don’t we do liquidations? KPMG is doing very well with the Bank of Credit and Commerce Hong Kong job!’ [Kong was referring to a global bank infamous for its secrecy and fraudulent activities.] They said, ‘It’s a good idea but who’s going to lead it?’”
In the end, that big task was assigned to Kong, who had a mere three months’ insolvency experience under his belt after a secondment during his time at Touche Ross in England. “That was how we started offering our first specialist advisory service, and I had to learn on the job. I hired a senior manager who had experience in that area, so I learned from him too,” he recalls.
Kong notes how the Institute also played a role in helping him quickly grasp his new specialism. “In 1993, I joined my first Institute committee – the Insolvency Practitioners Committee. Through that I had the opportunity to learn from others and expand my network in the field. That was a great stepping stone for me.”
Kong continued on the committee for many years and later represented the Institute on the international federation for insolvency practitioners INSOL Board between 2005 and 2011. He also helped establish and chaired the Institute’s first faculty, the Restructuring and Insolvency Faculty in 2008, as well as introduced the first Specialist Qualification and Specialist Designation (Insolvency).
Since 1994, Kong has been actively involved in the Institute and sat on a wide range of committees. Last year, he was chairman of the Professional Conduct Committee, Small and Medium Practices Committee, Ethics Committee and Greater Bay Area Committee. He has also served on the Institute’s Council since 2015 and was vice-president in 2018 and 2019. “Through being a Council member and two years of vice-presidency, I have gained a lot more knowledge about the Institute’s operations, the practical problems that the management and our members face, and the ways to resolve it. With those experiences, I understand the bigger picture.” This broad view has given him ideas on what he should try to accomplish this year as President.
Three goals
Developing and finalizing the Institute’s Seventh Long Range Plan is first on Kong’s list of priorities. “It is really long overdue,” he says. “But we really need the involvement and buy-in of a Chief Executive to issue a long range plan for the next five years.” With Margaret Chan now at the Institute as the new Chief Executive and Registrar, Kong is hopeful that the Institute can deliver more details on the new plan in the first half of the year.
Another important focus area for him is the improvement of membership services. “Being a membership body, I really want to do a lot more for our members. My intention is to develop a plan to achieve this with the Council,” he explains.
With the Institute’s incredibly diverse range of members, Kong has seen the difficulties of personally reaching out to all of them. “You could have 200 to 300 professional accountants in practice working in a large firm, making it easier for us to get to them. But in the commercial field, you may only have one member in a company. There are thousands of them so we should work differently to reach out.”
“In the commercial field, you may only have one member in a company. There are thousands of them so we should work differently to reach out.”
Creating a new series of continuing professional development seminars or forums targeted at specific groups of members could be a way to address this issue, he says. “For example, we should have a members’ forum for our students, and one for our retired members,” he says. “We have a number of large corporate groups in Hong Kong, which will probably have a high number of members’ within its staff. Why don’t we run a forum specifically for that group? The same applies for government departments like the Audit Commission, Inland Revenue Department or the Treasury. So I would like to have more focused types of members’ forums. Reach out to certain groups, listen to them, gauge their needs, tell them what we do, and answer their questions.”
Kong is keen to help small- and medium-sized practices (SMPs). “For example, one of the problems they face is the lack of resources. I want to build an initiative that would help SMP firms in Hong Kong build a network or affiliations of firms, so that they can share resources.”
Another idea Kong has to enhance the way the Institute connects with members is to set up more interest groups. “We currently have 15 sports and recreational interest groups, and should look into other areas such as cycling, wine appreciation and yoga,” he says. “I would also like to see more professional and specialist interest groups, for example, a group for members working in the public and NGO sectors and another for the academic field. We could gear our seminars and activities towards their specific needs.”
Kong also believes more work can be done to elevate the Institute’s communications and image. “I think we need to have a bigger budget to do that. We really need to work with media outlets.” Placing a significant emphasis on enhancing the image of accountants may help solve a problem the profession is currently facing, he says. “Many members have a low sense of belonging to the Institute, and one of the reasons for that is I don’t think professional accountants have the high social status that they used to have in the past,” he says. “We already interview a lot of successful members for A Plus. I would like to work with broadcast media and, for example, see if they can broadcast interviews with successful CPAs, because they are out there. We need to show not only our members but also the public that when you’re a CPA, the sky’s the limit. You can be Hong Kong’s Financial Secretary or the former Chief Executive of Macau – they are all CPAs. These are just examples of ideas I have.”
In terms of communication with members, “Outreach through social media is really the way forward,” he says. “In addition, the Institute should also introduce new signature events and engage in more thought leadership work.”
Johnson Kong is the Managing Director of BDO Hong Kong. He specializes in financial investigation, forensic and litigation support, restructuring, receivership and insolvency related assignments.
New learning…
This year sees the first examinations of the new Qualification Programme (QP), starting with its new Associate Level in June. Kong believes the revamped programme, which is open to students with non-accounting backgrounds and degrees, is more relevant to the current demands of markets and businesses. “If you’re able to recruit students from a more diversified background, not only does it offer a selection of different talents, skills and experiences that may be of benefit to the organization and their work performance, it can also help foster creativity and offer a range of perspectives and ideas,” he says.
After the launch, the work shouldn’t stop there, he notes, particularly amid an ever-changing business environment. “I think we need to keep monitoring the syllabus and keep up in particular with IT advances and changes in our auditing and accounting standards. We really need to update our syllabus and study material on a regular basis.”
He sees the QP as being vital in providing students with a breadth of knowledge and skills an accountant needs at a general level. “But I think as a way forward, one should really look into a specialization, and that’s one thing I would really like to push as President. We need to introduce more specialist qualifications and designations to equip our members.”
…But new challenges
Kong believes much of the year will bring difficulties for businesses and members, thanks in part to uncertainties brought by the United States-China trade war and a challenging macroeconomic environment. “The U.S. and China signed a trade deal this month, but that’s only the first phase. There’s also the social unrest we have in Hong Kong, which will likely become a normality going forward. With those backdrops in mind, I think the downside risks are high. We have seen the economic reports in the last quarter showing declining numbers of tourists and trade volume, initial public offerings slowing down, so it’s going to be difficult year,” he says.
“We have to take the opportunity, no matter if we’re in commercial or practising, to enhance our own value, branch out and diversify so we can be more competitive. It’s really a game of survival.”
Kong sees the weak economic climate having a negative impact on some members and less so on others. “Some members in the practising sector would be indirectly affected as clients will probably ask for reduction of fees or there will be fewer IPOs and mergers and acquisitions. On the other hand, insolvency and restructuring work is increasing based on my firm’s experience.”
To prepare themselves, members should remain agile and move away from their comfort zone, he says. “We have to take the opportunity, no matter if we’re in commercial or practising, to enhance our own value, branch out and diversify so we can be more competitive. It’s really a game of survival.”
Moving members
One way for members to move out of their comfort zone is through exploring the potential business opportunities in the Greater Bay Area (GBA), says Kong.
After the central government issued the Outline Development Plan for the Guangdong-Hong Kong-Macao GBA in February last year, the Institute set up its Greater Bay Area Committee last July, with Kong as its chairman. “We have done a lot of research on the GBA in the last six months, and we’ve created the ‘GBA Resource Centre’ section of the Institute’s website to display the information. We have also created a list of useful contacts that can be used when we start to push out our plans for the GBA.
“The GBA is such a big project. I don’t think we alone can do the work ourselves. We have to collaborate with other organizations and other people, and governments including Hong Kong’s Commissioner for the GBA and the steering units of each of the 9+2 cities.”
As chair of the committee, Kong has led a number of delegations, gathering information for members, particularly those concerned about the hurdles of working and living in the GBA. “We’ve found out that there are a lot of schemes and concessions being implemented by various cities and municipal governments,” he explains. These policies include free or low office and accommodation rents for start-ups and Hong Kong citizens, and cash allowances to cover travel costs.
With most of the preparation work done, Kong is keen to start using the information collected to kick-start projects that will help members interested in moving across the border. One thing he would like to do is develop informative seminars for members about livelihood issues related to working and doing business in the GBA. “For example, how do you get your work visa? How do you hire staff and rent an office space? How do you register for tax and social security? How do you open a bank account? We should provide this information to those who are interested.
“The second thing is, I want to give younger members an opportunity to try out working and living in the GBA. We have to work together with the local large enterprises, the state-owned enterprises in the Mainland and the large companies in Hong Kong with Mainland establishments. Providing those short-term employment opportunities to our younger members will give them first-hand experience of working and living there, and let them judge through that experience.”
Keeping it in the family
For Kong, the decision to pursue an accounting career was made very early on. “I come from a rather poor family. My father passed away when I was eight years old so my mother brought me up single-handedly,” he says. His mother wanted him to become a professional. “I’m not very good at science, so doctor was out. I’m not very eloquent or articulate, so lawyer was out too,” he laughs. “But I’m really glad I’m an accountant. I’ve gained a lot from being an accountant. I’ve got a good career, I’ve got a good home, a good family.”
In fact, he is part of a family of accountants. “My wife is a Canadian chartered accountant, my son is a QP graduate and my daughter is a U.S. CPA. Hand on my heart, I’ve never steered them on what they should do in their future careers, but somehow they ended up in accounting. I must not be doing that bad,” he laughs.
Kong is not into sports, fitness or the complex tasting notes of wine. He likes to eat – especially around midnight. “I enjoy going out for midnight supper or late night snacks,” he says. “I enjoy driving my car from my home to, say, Wan Chai or Sheung Wan around 11:30 p.m. when it’s nice and quiet. While I’m driving, I’ll turn on the music that I like. It’s a feast because I’ll go to one shop for a bowl of noodles and then when I’m done I’ll go to another shop for a bowl of congee.” After eating his way through the city, Kong would be back at home around 1:00 a.m. “That’s how I get work-life balance.”
Choosing to slow down the pace once in a while is perhaps understandable for a person whose professional life has been mostly defined by fast-pace changes and growth. Kong qualified as a CPA in the United Kingdom in the 1980s and came back to Hong Kong in 1987, joining KPMG for 18 months. He then joined what would become BDO in 1989.
“I’ve been with this firm for over 30 years now. We started off as a local firm, not even a BDO member firm until 1997. I became one of five partners in 1991 and at the time we were a medium-sized local firm with less than 100 people,” Kong remembers. “Now we have grown to more than 1,100 staff in Hong Kong and over 40 partners. Seeing the firm grow over the years and building up the entire non-assurance practice of the firm has been very fulfilling.”
The Greater Bay Area Committee, which is chaired by Johnson Kong, has put together an ongoing collection of policies, research and event information from the Big Four, the government, institutes and chambers on the “Greater Bay Area Resource Centre” section of the Institute’s website.
