I want to start off my message this month by paying tribute to a valued senior management staff of the Institute, Mary Lam (Director of Member Support), who passed away on 18 March. Mary had been with the Institute for over 23 years. Throughout all these years I had the privilege of working together with her in various capacities. She was a very loyal, competent and cheerful lady and had contributed greatly to the development of our profession. Mary will be deeply missed by all of us and we express our heartfelt sympathy to her family.
Since the outbreak of the now pandemic novel coronavirus in January, it has been a trying time for all of us. Our daily activities are disrupted. While we are now in springtime, our economy has entered a cold winter. Many commercial sectors are facing a free-fall-like decline in business, and the future is full of uncertainty.
Towards mid-March, it began to look like Hong Kong was turning a corner with the containment of the outbreak, but the latest round of overseas returnees has created a second wave of challenges. A career in insolvency has taught me to never consider a matter resolved until the ink is dry. Although events were held for a few days, and we all wish to return to normal, these are still extraordinary times, and we must continue to act extraordinarily to surmount them.
The Institute’s continuing professional development activities are being delivered via webinars, many staff are working from home, the library is closed, counter hours are restricted, and face-to-face meetings are replaced by teleconferences. Nevertheless, the Institute is hard at work, issuing technical alerts, responding to queries, and putting in place contingency measures to address the evolving situation. These measures are a balance between the needs of members and students to access our services against health considerations for members, students and the Institute’s staff.
Although the cancellation of the Council’s Away Day in February has somewhat delayed the discussion of the strategies and initiatives of the Institute’s upcoming long range plan, I am pleased to say that significant progress has been made in forming the framework to guide the development of tactical action plans. The finalization of the plan should occur in the second quarter of the year.
As has previously been reported, based on the Governance Committee’s recommendation endorsed by the Council late last year, an Independent Working Group (IWG) will be set up to replace the Task Force for EGM Resolution 2. Reporting directly to the Council, the role of the IWG is to explore and help formulate amendments to the Professional Accountants Ordinance for the implementation of one-member-one-vote election of the President and Vice-Presidents. I am pleased to announce that the Council has recently approved the terms of reference and the composition of the IWG. The initial task for the IWG is to submit a draft report to Council on a public consultation.
As accountants, one of our key responsibilities is to know the financial health of the organizations or individuals we work for or advise. Given the deteriorating economic outlook, it is important to take steps to prepare for all possible financial eventualities. The Institute’s Restructuring and Insolvency Faculty Executive Committee has recently published guidance, How to Manage Financial Distress: Advice for Businesses and Individuals, in both English and Chinese to help advise them. The English version can be found here.
To help companies through these difficult times, the Institute has been advocating again the introduction of corporate rescue laws or provisional supervision, similar to corporate voluntary arrangements and administrations in other jurisdictions. Hong Kong, as an international financial centre, needs such provisions, with the introduction of a moratorium period during which all legal actions are stayed. These would help to shield debt-stricken companies and give them the time to restructure their businesses. I urge the government to speed up the process of introducing proper corporate rescue legislation. Proposals for such have been raised a number of times since 1996, and so I hope that now we can finally get the protection needed for businesses to find a “white knight” saviour to help them through this economic downturn.
In addition, on various occasions, I have been calling for a review of the maximum amount of the ex gratia payments out of the Protection of Wages on Insolvency Fund. Some of the limits have not been adjusted for many years and are very much outdated. Considering the situation, the upward adjustments of these limits are warranted.
We are facing challenging and turbulent times. The Institute will continue to support our members and practices in weathering this crisis. Together, we must go forward as one to meet these challenges. I am confident that we will eventually come out of the doldrums much better and stronger!
“We are facing challenging and turbulent times. The Institute will continue to support our members and practices in weathering this crisis.”