The best corporate governance goes hand in hand with a good corporate culture

A look at how maintaining good corporate governance is a continual process, and the Institute’s role in ensuring this

With the Best Corporate Governance Awards 2019 now open for entry, this article from the Hong Kong Institute of CPAs discusses how improving corporate governance requires continual effort to internalize strong governance behaviours

For the boards of listed companies, protecting shareholder value is a key responsibility. Good corporate governance can be a key driver in value-creation while also minimizing the risks an organization faces. But demonstrating the best corporate governance is a continual process of improvement rather than a one-time exercise. Practices evolve and organizations must ensure they understand and can meet new standards and requirements.

Continuing developments

The Institute has long campaigned for improving corporate governance in Hong Kong. Last year it released a report on the topic, authored by Syren Johnstone and Say H Goo of Hong Kong University, investigating corporate governance in the United Kingdom, United States, Mainland China and Singapore and whether Hong Kong could leverage on successful developments elsewhere. The report made 28 recommendations for improving corporate governance and culture. Since the publication of the report, the Institute has referred it to the Securities and Futures Commission and Hong Kong Exchanges and Clearing Limited (the stock exchange) and has invited the regulator to attend events discussing ways to strengthen corporate governance in Hong Kong. 
The stock exchange implemented new corporate governance reporting requirements to the Corporate Governance Code at the start of 2019. These changes improved the transparency and accountability of board recruitment, appointment processes and board assessment criteria, especially in relation to independent directors.
All listed companies must ensure they are meeting these new requirements, but those which aim to demonstrate the best corporate governance must be ahead of the curve. “The best performers in most categories were still able to achieve high scores on the strength of their voluntary additional disclosures and practices. These companies were also likely to be early adopters of any changes in requirements, as they see the benefits of a good corporate governance regime to the long-term success and sustainability of the company,” noted The Judge’s Report for the Best Corporate Governance Awards 2018. Early adoption allows organizations try out new ways of doing business and reporting their corporate governance, and be better-prepared for regulatory changes.
Positive external factors
Some organizations may not see good corporate governance as a direct benefit to them. But, as part of society, organizations play an important role in employing citizens and providing them with products and services. The proof of good governance shows that an organization is taking its responsibility to all its stakeholders seriously. This can have positive benefits, as the introduction to The U.K. Corporate Governance Code issued in July 2018 by the United Kingdom’s Financial Reporting Council notes: “Successful  and sustainable businesses underpin our economy and society by providing employment and creating prosperity. To succeed in the long-term, directors and the companies they lead need to build and maintain successful relationships with a wide range of stakeholders.” In this regard, good corporate governance and sustainability is increasingly important to investors, especially institutional investors. This is further evidenced by the stock exchange’s recent consultation proposals, which focused on upgrading the Environmental Social and Governance Reporting Guide under the listing rules.
Geert Peeters, Executive Director and Chief Financial Officer of CLP Holdings, a repeat winner at the Institute’s Best Corporate Governance Awards (BCGAs), said something similar in an interview with A Plus in 2017. “Good corporate governance enhances the credibility and reputation of the company, as well as promoting and safeguarding the interests of our stakeholders.” For CLP, “doing the right thing” is at the heart of operations and a key part of their corporate ethos – from the top of the organization down.
Demonstrating good corporate governance is not about box-ticking, but about ongoing monitoring and reviewing of practices to ensure they are helping the company meet its goals. “We see it as a never-ending commitment to constantly review and assess our policies to respond to the fast-changing environment, regulations and needs of our diversified businesses,” Kevin Hui, Director and Group Financial Controller, The Wharf (Holdings) Ltd, told A Plus in 2018. The Wharf were first time BCGAs winners in 2018. To assist, the company organizes regular training sessions for staff on corporate governance policies, with the expectation that over time the stronger awareness of the rules and codes will improve operations, reduce errors and lower the risks the company faces.
Demonstrate your corporate governance excellence
The Institute is this year celebrating the 20th year of its seminal BCGAs, which are open for entry until 12 August. Awards are available across a range of categories:

  • The main awards are open to listed companies and public sector and not-for-profit organizations.
  • Commendations for Website Corporate Governance Information, aimed at encouraging organizations making good efforts to improve information disclosure about their governance policies and practices through their websites.
  • Self-nomination Awards for smaller organizations and non-profits, to encourage improvements in these important sectors.
  • The Sustainability and Social Responsibility Reporting Awards focus on ESG reporting, which has become a key aspect of good organizational conduct and reporting.

Details about the entry process can be found on the Institute’s website. To demonstrate your organization’s commitment to improving, why not enter now?

Add to Bookmark
Text size
Related Articles
January 2024
The President of the Institute on tackling the talent shortage issue, and the significance of the Institute’s role as a statutory sustainability standard setter
January 2024
Digital transformation
January 2024
Key insights from the Institute’s study on the current state of technology adoption by small- and medium-sized practices in Hong Kong
BCG & ESG Awards
January 2024
Key highlights based on the awardees of the Institute’s business awards which celebrate achievements in corporate governance and ESG
January 2024


We use cookies to give you the best experience of our website. By continuing to browse the site, you agree to the use of cookies for analytics and personalized content. To learn more, visit our privacy policy page. View more
Accept All Cookies