Listing Regulation New Proposals for Hong Kong Board Evaluation AML/CFT Update the Paradise Papers HKICS Foundation Charity Sale

CSj January 2018

Listing regulation New proposals for Hong Kong Board evaluation AML/CFT update The Paradise Papers HKICS Foundation Charity Sale

Whilst shopping for the festive holidays, you could also be supporting The Hong Kong Institute of Chartered Secretaries Foundation Limited (the HKICS Foundation) by ordering the Institute’s neckties and scarves which are priced at only HK$200 each.

The Institute is also delighted to present a limited edition of wine charms through the collaboration with Les Beatitudes (LBA 愛連心), a social enterprise set up to support underprivileged women who want and need to work in a flexible arrangement. Only 40 boxes of the Institute’s wine charms are produced for this Charity Sale. A box of six wine charms is selling at HK$300.

All proceeds from this Charity Sale will go to the HKICS Foundation for promoting good secretaryship and corporate governance to the general public. This Charity Sale will end on Thursday 18 January 2018. Please act now! For enquiries, please contact Idy Cheung at 2830 6018 or [email protected].

Guests at the HKICS Annual Dinner 2018 – A Sparkling Night on 18 January 2018 will also be able to purchase their neckties, scarves and wine charms at the event.

The HKICS Foundation, a wholly owned subsidiary of The Hong Kong Institute of Chartered Secretaries, is a registered charity under Section 88 of the Hong Kong Inland Revenue Ordinance (charity reference 91/11348). To find out more about the HKICS Foundation and its activities please visit www.hkics.org.hk.

The Hong Kong Institute of Chartered Secretaries 香港特許秘書公會 (Incorporated in Hong Kong with limited liability by guarantee) www.hkics.org.hk

TIE_2017_2.indd 1 29/12/17 5:15 pm HKICS Foundation Charity Sale

Guests at the HKICS Annual Dinner 2018 – A Sparkling Night on 18 January 2018 will also be able to purchase their neckties, scarves and wine charms at the event.

The Hong Kong Institute of Chartered Secretaries 香港特許秘書公會 (Incorporated in Hong Kong with limited liability by guarantee) www.hkics.org.hk

TIE_2017_2.indd 1 29/12/17 5:15 pm Good governance comes with membership January 2018 About The Hong Kong Institute of Chartered Secretaries CSj, the journal of The Hong Kong Institute of The Hong Kong Institute of Chartered Secretaries (HKICS) is an independent professional body dedicated to the Chartered Secretaries, is published 12 times a year promotion of its members’ role in the formulation and effective implementation of good governance policies, as well by Ninehills Media and is sent to members and as the development of the profession of the Chartered Secretary in Hong Kong and throughout Mainland China. HKICS students of The Hong Kong Institute of Chartered was first established in 1949 as an association of Hong Kong members of the Institute of Chartered Secretaries and Administrators (ICSA) of London. It was a branch of ICSA in 1990 before gaining local status in 1994 and has also Secretaries and to certain senior executives in the been ICSA’s China/Hong Kong Division since 2005. HKICS is a founder member of Corporate Secretaries International public and private sectors. Association (CSIA) which was established in March 2010 in Geneva, Switzerland. In 2017, CSIA was relocated to Hong Kong in which it operates as a company limited by guarantee. CSIA aims to give a global voice for corporate secretaries Views expressed are not necessarily the views of and governance professionals. HKICS has over 5,800 members and 3,200 students. The Hong Kong Institute of Chartered Secretaries or Ninehills Media. Any views or comments are for Council 2018 Committee chairmen reference only and do not constitute investment David Fu FCIS FCS (PE)– President Audit Committee: or legal advice. No part of this magazine may be Dr Gao Wei FCIS FCS(PE) – Vice-President Ernest Lee FCIS FCS(PE) reproduced without the permission of the publisher Paul Stafford FCIS FCS(PE) – Vice-President Education Committee: or The Hong Kong Institute of Chartered Secretaries. Dr Eva Chan FCIS FCS(PE) – Treasurer Dr Eva Chan FCIS FCS(PE) Human Resources Committee: Professor Alan Au FCIS FCS Circulation: 8,200 Dr Maurice Ngai FCIS FCS(PE) Arthur Lee FCIS FCS Annual subscription: HK$2600 (US$340) Membership Committee: To subscribe call: (852) 3796 3060 or Ernest Lee FCIS FCS(PE) Stella Lo FCIS FCS email: [email protected] Stella Lo FCIS FCS Nomination Committee: Gillian Meller FCIS FCS Edith Shih FCIS FCS(PE) Editorial Committee David Simmonds FCIS FCS Professional Development Committee: Kieran Colvert Low Chee Keong Bernard Wu FCIS FCS Paul Stafford FCIS FCS(PE) Mohan Datwani Philip Miller Paul Davis Samantha Suen Wendy Yung FCIS FCS Secretariat Ivan Tam FCIS FCS – Immediate Past President Lydia Kan Li Zhidong Samantha Suen FCIS FCS(PE) Chief Executive Ernest Lee Dr Maurice Ngai FCIS FCS(PE) - Past President Mohan Datwani FCIS FCS(PE) Senior Director and Head of Technical & Research Membership statistics update Credits Louisa Lau FCIS FCS(PE) Registrar As of 30 November 2017 membership Kieran Colvert Harry Harrison Candy Wong Director, Education and Examinations statistics were as follows: Editor Illustrator (cover) Lydia Kan FCIS FCS(PE) Director, Professional Development Students: 3,394 Ester Wensing Images Carman Wong FCIS FCS(PE) Company Secretary Graduates: 546 Art Director iStockphoto Karen Ho Senior Manager, Finance and Accounting Associates: 5,207 Lawrence Wong Senior Manager, Marketing & Fellows: 621 Contributors to this edition Communications Timothy Loh Mohan Datwani Kenneth Jiang FCIS FCS(PE), BRO Chief Representative Timothy Loh LLP HKICS The Hong Kong Institute of Chartered Secretaries Low Chee Keong Kelly Cooper (Incorporated in Hong Kong with limited liability by guarantee) CUHK Business School CSR Asia 3/F, Hong Kong Diamond Exchange Building, 8 Duddell Street, Central, Hong Kong John T Dinner Bryane Michael Tel: (852) 2881 6177 Fax: (852) 2881 5050 John T Dinner Governance Asian Institute for Email: [email protected] (general) [email protected] (professional development) Services Financial Law [email protected] (member) [email protected] (student) Website: www.hkics.org.hk Advertising sales enquiries Ninehills Media Ltd Beijing Representative Office Tel: (852) 3796 3060 Rm 15A04A, 15A/F, Dacheng Tower, No 127 Xuanwumen West Street Jennifer Luk Xicheng District, Beijing, 100031, China Tel: (86) 10 6641 9368 Fax: (86) 10 6641 9078 Email: [email protected] Email: [email protected] Frank Paul Institute of Chartered Secretaries and Administrators Email: [email protected] Governance Institute of Governance New Zealand The Institute of Chartered Australia PO Box 444 Secretaries & Administrators Ninehills Media Ltd Level 10, 5 Hunter Street Shortland Street c/o MCI UK 12/F, Infinitus Plaza Sydney, NSW 2000 Auckland 1015 Durford Mill, Petersfield Australia New Zealand Hampshire, GU31 5AZ 199 Des Voeux Road Tel: (61) 2 9223 5744 Tel: (64) 9 377 0130 United Kingdom Sheung Wan Fax: (61) 2 9232 7174 Fax: (64) 9 366 3979 Tel: (44) 1730 821 969 Hong Kong Chartered Secretaries Canada Tel: (852) 3796 3060 202-300 March Road The Singapore Association ICSA: The Governance Institute Fax: (852) 3020 7442 Ottawa, ON, Canada K2K 2E2 of the Institute of Chartered Saffron House, 6-10 Kirby Street Secretaries & Administrators London EC1N 8TS Internet: www.ninehillsmedia.com Tel: (1) 613 595 1151 Email: [email protected] Fax: (1) 613 595 1155 149 Rochor Road United Kingdom #04-07 Fu Lu Shou Complex Tel: (44) 20 7580 4741 © Copyright reserved The Malaysian Institute of Singapore 188425 Fax: (44) 20 7323 1132 ISSN 1023-4128 Chartered Secretaries and Tel: (65) 6334 4302 Administrators Fax: (65) 6334 4669 The Institute of Chartered No. 57 The Boulevard Secretaries & Administrators Chartered Secretaries Southern Mid Valley City in Zimbabwe Lingkaran Syed Putra Africa PO Box CY172 PO Box 3146 59200 Kuala Lumpur Causeway Harare Houghton 2041 Malaysia Zimbabwe Republic of South Africa Tel: (60) 3 2282 9276 Tel: (263) 4 702170 Tel: (27) 11 551 4000 Fax: (60) 3 2282 9281 Fax: (263) 4 700624 Fax: (27) 11 551 4027 Contents

Cover Story Front-loaded regulation: the implications for listed companies 06 Timothy Loh, Managing Partner; and Greg Heaton, Senior Consultant; Timothy Loh LLP, argue that the new front-loaded regulation adopted by the Securities and Futures Commission (SFC) signals an increasing level of oversight and intervention by the SFC in the regulation of listed companies.

Corporate Governance Corporate governance: an overview 10 Low Chee Keong FCIS FCS, Associate Professor in Corporate Law, CUHK Business School, provides a concise overview of three inter-related questions, namely, what is corporate governance, why is it important and where may it go from here.

Assessing board performance: an outcomes-based approach 16 John Dinner, President, John T Dinner Board Governance Services, argues in favour of an outcomes-based approach to board evaluation.

In Focus AML/CFT: preparing for the new regime 20 Mohan Datwani FCIS FCS(PE), Senior Director and Head of Technical & Research, The Hong Kong Institute of Chartered Secretaries, looks at the background to, and the implications of, Hong Kong’s latest anti-money laundering and counter-financing of terrorism upgrade.

Viewpoint The Paradise Papers 26 Kelly Cooper, Project Manager, CSR Asia, makes the case for companies to create value both for themselves and the communities within which they operate by responsible and transparent tax policies.

Post Panama – the implications for CSPs 30 Bryane Michael, Senior Fellow, Asian Institute for International Financial Law, Faculty of Law, The University of Hong Kong, looks at the implications for corporate service providers (CSPs) of the tougher regulatory requirements imposed on CSPs in the post Panama Papers environment.

HKICS News President’s Message 04 Institute News 34 Student News 47 President’s Message

Looking ahead

committees which would have given the IPOs and for regulating listed companies? SFC a greater say in approving listings. This This latter issue, along with the implications proposal met with deep division during the of the SFC’s ‘front-loaded’ approach to its five-month consultation period and the regulatory role, is addressed in this month’s conclusion in September 2017 was that, cover story. This has been a long-running instead of the two committees proposed debate in Hong Kong. Ever since the inquiry by the SFC, a Listing Policy Panel is to be into the Penny-Stocks Incident back in 2002, established, which will provide the SFC for example, there has been a question as with a forum for advisory input on listings to whether Hong Kong should maintain its policies with broader regulatory or market current dual responsibility model – whereby implications, but leaves intact the primacy of the SFC is the statutory regulator and the The Stock Exchange of Hong Kong Ltd (the Exchange is the frontline regulator – or am honoured to be addressing you as Exchange) in approving listings in the city. proceed to the model adopted in the US IPresident of our Institute after my election and UK where the statutory regulator holds at the Council meeting following our Annual Earlier this year, HKEX put forward the ‘New substantially all regulatory powers. It will be General Meeting on 15 December 2017. Board Concept Paper’ and its consultation interesting to see how this debate evolves in I hope to be able to build on the excellent paper on the Growth Enterprise Market the year ahead and you can rest assured that work of our Immediate Past President (GEM). Revised proposals issued last month we as governance professionals will be core Ivan Tam FCIS FCS, and indeed all of my would align the GEM and Main Board listing contributors to shaping Hong Kong’s future predecessors in this role. Our Institute requirements more closely and make GEM in this area. has achieved a great deal in recent years a standalone market for small and mid- thanks to the hard work not only of its sized companies instead of a stepping stone Before I go, I would like to remind you of Past Presidents, but also of Council, the to the Main Board. The proposals would our Annual Dinner 2018, which will be secretariat and all of our members in Hong also expand the existing listing regime by held on the 18th of this month at the JW Kong and Mainland China. I hope to be introducing two new chapters to the Main Marriott Hotel Hong Kong. Our Annual able to keep up this momentum during my Board listing rules to allow the listing of Dinner always provides an excellent tenure as President, taking forward our biotech issuers which are pre-profit and/ opportunity for Institute members and strategic goals. I will be reporting in more or pre-revenue, as well as issuers from friends to get together in an informal and detail on the agenda for 2018 and the years emerging and innovative sectors that have enjoyable setting, and this year’s event is ahead after our Council strategy meeting. weighted voting rights structures, subject to shaping up to be particularly interesting additional disclosure and safeguards. HKEX since our Guest of Honour will be Paul One issue which looks set to feature also proposes to create a new concessionary Chan Mo-Po GBM GBS MH JP FCIS FCS, prominently for Hong Kong and for our secondary listing route to attract issuers Financial Secretary, the Government of the profession in the year ahead is the future from emerging and innovative sectors that Hong Kong SAR. I look forward to seeing regulatory architecture of our capital market, are primary listed on the New York Stock you at the dinner and working with you all and it is this complex issue which features Exchange, Nasdaq or the ‘premium listing’ in the year ahead. as the central theme of our journal this segment of the London Stock Exchange’s month. The issue has been much in the news Main Market. There will be further recently as both Hong Kong Exchanges and consultation in this regard. Clearing Ltd (HKEX) and the Securities and Futures Commission (SFC) have put forward These latest developments involve important proposals to change the listing framework questions for Hong Kong’s future as a for IPOs and our listing regulatory model. capital market. How can we maintain the competitiveness of our market without In June 2016, the SFC and HKEX consulted compromising investor protection? How the market on a proposal to create two new can we improve our listing framework for David Fu FCIS FCS(PE)

January 2018 04 President’s Message

展望未來

017年12月15日周年會員大會後的今年較早時，港交所提出《建議設立最後，謹此提醒大家，公會2018年周 2 理事會會議中，本人獲選為公會會創新板》框架諮詢文件，以及有關創年晚宴將於1月 18日假香港JW萬豪酒長，很榮幸在這裏以會長的身分向大家業板的諮詢文件。上月公布的修訂建店舉行。周年晚宴一向是公會會員和發言。前任會長譚國榮FCIS FCS以及歷議，將使創業板和主板的上市條件更友好非正式地聚首一堂，輕鬆愉快地屆會長的工作都十分出色，本人希望以趨一致，讓創業板成為中小型公司上交流的好機會。今年公會邀得香港特此為基礎，繼續發展會務。有賴歷任會市的獨立市場，而非作為主板上市的別行政區政府財政司司長陳茂波大紫長、理事會、秘書處及香港與中國內地踏腳石。建議亦將擴充現有的上市機荆勋贤GBS MH JP FCIS FCS作為主礼嘉全體會員的努力，公會近年來做了大量制，在主板上市規則增加兩章，在加賓，周年晚宴將特別吸引。期望在晚工作，成績有目共睹。本人希望在出任強披露及保障措施的前提下，讓尚未宴見到大家，也期望來年與大家共同會長期間延續這勢頭，實現策略目標。有盈利及／或收益的生物技術公司，合作。理事會舉行策略會議後，本人將更詳盡以及採用不同投票權架構的新興及創說明2018年及往後的工作。新型公司能夠上市。港交所亦建議設立新的第二上市途徑，吸引在紐約證來年勢將深獲香港和特許秘書行業關券交易所、納斯達克作第一上市，或注的一項發展，是香港資本市場未在倫敦證券交易所主板市場作高級上來的監管架構。這複雜的課題，正是市的新興及創新型公司。這建議將再本刊今期的主題。香港交易及結算所作諮詢。有限公司（港交所）及證券及期貨事務監察委員會（證監會）最近提出建這些最新發展，牽涉香港作為資本市議，修改首次公開招股的上市框架以場的未來。我們可如何維持香港市及香港的上市監管模式，因此近期此場的競爭力，而又不損對投資者的保事經常獲傳媒報道。障？我們可如何改善上市框架，監管首次公開招股及上市公司？今期的封 2016年 6月，證監會及港交所提出建面故事，探討第二個問題，以及證監議諮詢市場，建議內容是設立兩個新會「前置式」監管方針的影響。這課委員會，讓證監會在批准上市申請的題長期以來在香港一直甚具爭議。例工作上有更大決定權。在為期五個月如自從2002年仙股事件的調查起，就的諮詢期間，各界意見有重大分歧。有討論涉及香港應否繼續維持現有的 2017年 9月發出的諮詢總結提出設立雙重責任模式，即證監會是法定監管上市政策小組，取代證監會建議的兩機構，聯交所是前線監管機構，又或傅溢鴻 FCIS FCS(PE) 個委員會，讓證監會就對監管工作或應改用美國和英國採納的模式，由法市場有影響的上市政策提供意見，但定監管機構掌握大部分監管權力。來維持香港聯合交易所有限公司（聯交年這討論的進展值得關注，而作為管所）在批准香港上市申請的工作中的治專業人員，我們必定提供意見，塑首要地位。造香港這方面的未來發展。

January 2018 05 Cover Story

Front-loaded regulation: the implications for listed companies

Timothy Loh, Managing Partner; and Greg Heaton, Senior Consultant; Timothy Loh LLP, argue that the new front-loaded regulation adopted by the Securities and Futures Commission (SFC) signals an increasing level of oversight and intervention by the SFC in the regulation of listed companies.

n July 2017, Ashley Alder JP, the Chief directly regulate listed companies. These Expansion of enforcement powers IExecutive Officer of the Securities rules and their predecessor, the Securities Traditionally, the SFC has relied on and Futures Commission (SFC), formally (Stock Exchange Listing) Rules, have enforcement powers that can only be introduced a new approach to regulating for almost 30 years given the SFC the exercised through a court or the Market companies listed, or applying to be listed, power to object to any listing or to Misconduct Tribunal (MMT). The SFC on the Stock Exchange of Hong Kong suspend or cancel a listing on various has now, in effect, explicitly added the (SEHK). The new approach, called grounds, including: power to suspend a listed company or to ‘front-loaded regulation’, emphasises cancel the listing of a listed company as ‘earlier, more targeted intervention’ to • where materially false, incomplete additional tools in its arsenal. The power pre-empt or limit investor losses or misleading information has to suspend, in particular, is likely to be from major corporate misfeasance and been included in any prospectus highly effective because: market misconduct. or other document issued in connection with a listing or in any 1. no approval from a court or any Front-loaded regulation does not disturb announcement or other document tribunal is required for the SFC to use the SEHK’s role as the frontline regulator issued by an issuer in connection it, and of listed companies, a role which many with its affairs market participants had argued forcefully 2. though the SFC has indicated that it should be maintained in the course of a • where it is necessary or expedient in will ‘normally’ give a listed company joint SFC-SEHK consultation on the interest of maintaining an orderly a reasonable opportunity to be heard decision making and governance in and fair market, or before it exercises this power, it is listing regulation. However, it gives not obliged under the SMLR to do so. new life to long-standing powers of the • where it is in the interest of the SFC under the Securities and Futures investing public or it is appropriate So far, the SFC has reported that it (Stock Market Listing) Rules (SMLR) to for the protection of investors. has used its power of suspension as

January 2018 06 Cover Story

representations are to be heard by the directors of the SFC. In this case, any director of the SFC who originally made the decision to suspend may not participate in the deliberations or vote in connection with the hearing of the objection but may explain his decision. The listed company is entitled to be represented by its lawyer in the hearing of its objection.

Parallel regulation A further consequence of front-loaded regulation is that it may enable the SFC to supplement the SEHK listing rules. The SFC’s powers of suspension may be exercised, not only when the issuer has disclosed false information, but also whenever the SFC believes that it is ‘appropriate for the protection of investors’. The latter is potentially capable of a very broad interpretation. ‘exceptional early protective action’, decision by the SFC to suspend a listing usually taken during an investigation to to an independent tribunal such as the In May 2017, the SFC issued a Guidance maintain the status quo pending: Securities and Futures Appeals Tribunal note on directors’ duties in the context (SFAT). In contrast, decisions of the SFC of valuations in corporate transactions. 1. further investigation under the SMLR to object to a listing can Earlier, in June 2012, the SFC issued be appealed to the SFAT. its Guidelines on Disclosure of Inside 2. the taking of a specific remedy, or Information. These documents were However, a listed company which issued in the context of the SFC’s 3. the imposition of a specific sanction. objects to a decision by the SFC to powers under the Securities and Futures suspend dealings in its securities may Ordinance (SFO) in respect of conduct In this latter respect, where a listed make representations to the SFC. Such unfairly prejudicial to shareholders of company has acted in a manner prejudicial to its investors, the SFC has Highlights traditionally sought court orders to require the listed company to sue its officers or to disqualify its officers from • under the Securities and Futures (Stock Market Listing) Rules, for almost 30 being directors in the future. years, the SFC has had the power to object to any listing or to suspend or cancel a listing on various grounds Regrettably, because the power of suspension is not subject to any approval • no approval from a court or any tribunal is required for the SFC to use the from a court or tribunal, the basis upon power to suspend a listing which this power is exercised and the • after abandoning proposed amendments to the listing process, it appears the arguments raised against it are not SFC will instead expand its role through greater reliance on its existing powers transparent. There is no right to appeal a

January 2018 07 Cover Story

of oversight and intervention by the SFC fact that the SFC has responded to these traditionally, the in the regulation of listed companies. failures by reverting to the SMLR, suggests Whilst it is always inherently difficult that the SFC will henceforth continue to SFC has relied on to make predictions, this oversight and expand its role through application of the enforcement powers intervention will, in our view, take SMLR on an incremental basis. place through the issuance of guidance that can only be as to expected standards of conduct A second reason why it seems likely exercised through a and through gradual enforcement that the SFC will continue to expand its action under the SMLR. We say this for role through the SMLR is that such an court or the Market two reasons. expansion seems consistent with the Misconduct Tribunal prevailing trend in which the SFC has First, the SFC has repeatedly expressed been taking an increasingly active role in concerns about the quality of regulation deploying its statutory powers – powers of listed companies under the current which the SEHK does not have – to listed companies and the requirement framework, known as the dual-filing regulate listed companies. This trend for listed companies to disclose inside system, under which listing applications is particularly notable in the rise in the information. Significantly, they were are reviewed by both the SEHK and the number of SFC investigations now focused issued to provide guidance on the SFC’s SFC. These concerns were expressed as on listed companies as a proportion of all expectations of listed companies for long ago as 2003, when a three-member investigations. As is often the case with the purpose of exercising specific expert group appointed by the Financial regulation, there is a natural tendency statutory powers. It is not a great leap Secretary of the Government of the to continuously move towards a higher to imagine that, on the same basis, the HKSAR issued a report (Expert Report) degree of regulation and the present SFC would issue guidance on what it recommending that the regulatory trend shows no signs of abating. regards as ‘appropriate for the protection functions of SEHK be transferred to of investors’. the SFC. This was intended to clear the One sign of things to come was the conflict of interests of the SEHK as both a introduction in 2013 of the statutory The validity of such guidance is unclear. regulator and a profit-making entity, and requirement to disclose inside information. Under the SFO, quite apart from the SFC’s to improve the quality and efficiency of This requirement in effect moved power to require the SEHK to make or listing applications. The recommendations the regulation of the key post-listing amend particular listing rules, the SFC of the Expert Report were supported by obligation, namely the duty to disclose has the power to make its own rules in the SFC but faced significant opposition, information on a continuous basis, from relation to listing. However, in so doing, it and ultimately were not adopted. the SEHK to the SFC. Once the new must consult with the Financial Secretary requirement came into effect, the SFC of the Government of the HKSAR and the Most recently, in November 2016 the SFC promptly commenced three actions before SEHK. It does not appear that any similar and SEHK issued a Joint Consultation the MMT, one each against AcrossAsia, requirement for consultation would apply Paper on Proposed Enhancements Mayer and Yorkey, letting it be known that in the case where the SFC simply issues to the Exchange’s Decision-Making it was the new cop on the block. guidance as to how it plans to exercise its and Governance Structure for Listing discretion to suspend a listed company. Regulation, which proposed greater Another sign of things to come is the SFC participation in listing policy and SFC’s not infrequent use of its statutory Looking forward in the review of decisions of the listing powers to seek remedies through the Though the SFC’s new front-loaded committee. These proposals were courts for listed company misconduct. regulation appears to be an evolving abandoned following fierce opposition. These remedies include requiring the approach whose implications for listed listed company to pay compensation companies are not fully known, it seems The failure of these consultations to to investors or to sue directors or probable that it signals an increasing level result in any significant changes, and the former directors who have engaged in

January 2018 08 Cover Story

misconduct, or disqualifying directors an ‘ICE’ team composed of officers from companies that allegedly work together from serving as such. The SEHK does not the Intermediaries, Corporate Finance to defraud minority shareholders through have equivalent powers to compel persons and Enforcement divisions, tasked with market manipulation and by entering into to cooperate with its investigations, nor identifying and responding to problems apparently legitimate transactions that does it have an equivalent ability to seek relating to listed companies, especially in do not make genuine business sense. In these types of remedies. The powers of the Growth Enterprise Market (GEM). Using one recent operation, the SFC used 136 the SFC to suspend or cancel listings go the supervisory tools of the Intermediaries officers from three SFC divisions to search hand in hand with these other statutory division, the SFC undertook a thematic multiple premises. powers and there seems to be no obvious review of price volatility of listings on reason why the SFC would not deploy GEM, focused on placing agents whose The result of the foregoing is that, over its powers to suspend or cancel in practices purportedly resulted in a high the long term, it seems likely that the core appropriate circumstances. concentration of shareholdings among a of the regulation of listed companies will small number of placees. Subsequently, move from the SEHK to the SFC. In ramping up the use of its existing the Enforcement division launched powers, the SFC has sought to improve investigations into a number of listing Timothy Loh, Managing Partner and collaboration among its operational sponsors. ICE has also attempted to Greg Heaton, Senior Consultant divisions. Specifically, the SFC has formed identify and disrupt groups of interrelated Timothy Loh LLP

Postgraduate Degree Programmes

Doctoral Degrees Master's Degrees

SBS Swiss Business School, Macquarie University Graduate University of South Australia, Switzerland School of Management, Australia Australia DBA MBA Reg.210545 MBA CRICOS Provider Number: 00121B - Marketing Reg.212660 - Human Resource Management Reg.212659 University of Wales Trinity - Finance Reg.212642 復旦大學管理學院 Saint David, UK 中文工商管理碩士專案 Reg.252717 University of Greenwich, UK DBA Reg.232126 MBA (International Business) Reg. 252208 LLM International The University of Iowa, USA and Commercial Law Graduate School of Business, Reg.252469 Universiti Sains Malaysia Master of Business Doctor of Philosophy Administration Reg. 262810 Reg.272722

It is a matter of discretion for individual employers to recognize any quali cation to which these courses may lead. 個別僱主可酌情決定是否承認這些課程可令學員獲取的任何資格。 MCSJ1801011

2774 8500 / 8501

January 2018 09 Corporate Governance

Corporate governance: an overview

Low Chee Keong FCIS FCS, Associate Professor in Corporate Law, CUHK Business School, provides a concise overview of three inter-related questions, namely, what is corporate governance, why is it important and where may it go from here.

January 2018 10 Corporate Governance

cademic research suggests that there of which were aided by implicit state Secretary Professor Lawrence Summers, Ais a systematic difference between guarantees; while the latter exposed this reform allowed banks to use their countries in terms of the legal protection significant shortcomings with the laissez- deposits to invest in derivatives. By accorded to minority shareholders with faire attitude towards deregulation in doing so, it allowed the larger banks two distinct trends emerging. First, the the financial services industry in the US. to deploy their resources towards the least protection for investors is provided A common thread through these crises creation of increasingly sophisticated and in countries in which companies have was that the concepts of transparency, complex derivatives which coincide with the highest ownership concentration. disclosure and accountability were largely the growth of subprime mortgages as Secondly, expropriation of outside ignored as investors assumed short-term financial institutions sought to increase shareholders arises most significantly outlooks to derive increasing profits from their rates of returns. When the housing where a company is affiliated to a group the steadily rising financial markets. bubble burst, it precipitated the banking of companies, all of which are controlled crisis in 2007 which subsequently spread by the same shareholder. In the lead up to the Asian financial crisis, to Wall Street as by 2008 a number of the companies across the region were guilty major banks – with their over-reaching This evidence suggests that the common of neglecting the principles of good tentacles into the financial markets – law system provides more protection for corporate governance, the difference had become ‘too big to fail’. investors as the transfer of assets and being perhaps in the degree of neglect. profits out of firms for the benefit of their This is evident from instances of corporate Defining corporate governance controlling shareholders is more prevalent abuse through related-party transactions, The term ‘corporate governance’ was in civil law jurisdictions and is significant incidence of capricious decision-making, succinctly defined inThe Cadbury Report for two reasons, namely: shifting of assets within the corporate as ‘the system by which companies are group, undertaking of transactions directed and controlled’. ‘Boards of directors 1. the importance of the centrality without proper disclosure and poor are responsible for the governance of of legal protection for minority financial management by directors. The their companies. The shareholders’ role in shareholders, and repeal of the Glass-Steagall Act of 1933 governance is to appoint the directors and – which separated the commercial and the auditors and to satisfy themselves that 2. the assertion that legal regulation investment banking activities of financial an appropriate governance structure is in can outperform private contracting. institutions – by the Gramm-Leach-Bliley place,’ the Report stated. Act in the US in 1999 is often viewed In short, strong legal regulation and as a key contributor towards the global Although somewhat simplistic, it effective enforcement are critical to sound financial crisis. With the support of the highlights the importance of processes and effective corporate governance. then Federal Reserve Chairman Alan that companies should institute and Greenspan, as well as the then Treasury implement to ensure that effective Does corporate governance matter in practice? Highlights These findings have significant policy implications as good corporate governance practices contribute towards • strong legal regulation and effective enforcement are critical to sound and the overall well-being of a financial effective corporate governance system, as witnessed from both the Asian financial crisis in 1997 as well as • ‘soft’ law is beneficial only where there is active compliance by business the global financial crisis in 2008. The elites, diligent monitoring by capital market actors and effective control by former brought to the foreground the regulatory elites common occurrence of weak corporate • the fragilities of humans have invariably been the dominant or root cause of governance that allowed companies to the crises that we have experienced to date engage in excessive over-leverage, some

January 2018 11 Corporate Governance

Different models for corporate governance The evolution of the ‘comply or explain’ model has continued over the years, assisted by the publication of the Principles of Corporate Governance by the Organisation for Economic Co- operation and Development (the OECD Principles) in 1999, providing a sound as the tentacles of the modern corporation template upon which the various codes of corporate governance across jurisdictions reach further outwards, so too must there be could be harmonised. Recognising that a commensurate level of corporate behaviour good corporate governance is not an end in itself and in response to various that meets the expectations of the various developments in the financial markets, stakeholders which continue to evolve as well as with the global economy, the OECD Principles were updated and revised in 2004 and 2015 respectively. practices transcend the various levels of governance, and in the circumstances the the organisation. These were viewed as committee opined that it would be most While most countries have adopted the necessary responses to what was then appropriate to adopt a principles-based principles-based approach, it is not the seen as the lack of managerial oversight ‘comply or explain’ approach. In a nutshell, only model as some jurisdictions such as which led to the spectacular corporate companies were expected to comply with the US practices a rules-based approach. collapses of the Bank of Credit and the core corporate governance principles The latter has enshrined its applicable Commerce International, Coloroll, the Polly identified in the voluntary Corporate standards of corporate governance in Peck Group and Maxwell Communication Governance Code and if they do not the Sarbanes-Oxley Act thereby making Corporation in the late 1980s and early comply, they needed to explain why not. compliance mandatory. A key objective 1990s. These collapses did not only The underlying aims of this approach was of passing this legislation was to restore result in substantial financial losses to ensure transparency as it was hoped public confidence in the markets following to shareholders, employees, creditors, that market forces and pressure from the scandals which surfaced from the investors as well as the government – they investors would ensure compliance rather collapse and subsequent bankruptcies were also seen as posing considerable than explaining non-compliance. of Enron, WorldCom, Adelphia, Tyco and challenges to the integrity and reputation Global Crossing in the preceding two of the City of London as an international This principles-based self-regulatory years which resulted in billions of dollars financial centre. approach rapidly gained favour across in financial losses, as well as the loss of global capital markets. The idea of a thousands of jobs. Significantly, theCadbury Report voluntary code on corporate governance recommended that compliance should that focuses on structures, processes and However, the irony is that it was with this be based on a voluntary code of best practices has been actively promoted almost draconian legislation firmly in place practice – designed to achieve the since the publication of the Cadbury when its shortcomings were glaringly necessary high standards of corporate Report in 1992 and the present UK exposed with the collapse of Lehman behaviour – supplemented by appropriate Corporate Governance Code, which was Brothers in the US, triggering the global levels of disclosure. It must be noted published in September 2014, now sits financial crisis of 2008 with its well- that the scope of the Cadbury Report at the forefront having being followed in known impact on the American and world was specifically to address issues arising almost every sophisticated corporate law economies. Another knee-jerk reaction from the financial aspects of corporate system in the world. followed with more draconian legislation

January 2018 12 Corporate Governance

passed in the form of the Dodd-Frank Act of 2010 as the black letter law approach, with its severe sanctions for contraventions of the rules, was perpetuated.

Did the self-regulatory and principles- based approach on the other side of the Atlantic fare any better? That is very hard to conclude as was crudely illustrated by the collapse of the Royal Bank of Scotland which necessitated the biggest bank bail- out ever by the British government.

So, what are the choices if any? Despite the differences in approach, both the principles-based as well as the rules-based models share a common objective, namely, to enhance the quality of the processes that support the practice of good corporate governance through lessons learnt from the corporate collapses from the late 1980s through to early 2002. However, is one model to be preferred over the other?

In his speech at the 2003 Washington Economic Policy Conference, William Donaldson, the then Chairman of the Securities and Exchange Commission, noted that ‘corporate scandals have exacerbated the roughly US$7 trillion collapse in the aggregate market value of US corporations over the past few years’ and opined that – ‘a “check the box” approach to good corporate governance will not inspire a true sense of ethical obligation. It could merely lead to an array of inhibiting, “politically correct” dictates. If this was the case, ultimately corporations would not strive to meet higher standards, they would only strain under new costs associated with fulfilling a mandated process that could produce little of the desired effect. They would lose the freedom to make innovative decisions that an ethically sound entrepreneurial culture requires.’

January 2018 13 Corporate Governance

Donaldson goes on to recommend that While voluntary compliance with good In the circumstances, despite the board members should define the culture corporate governance practices based complexities, the appeal of the flexibility of ethics that they expect all aspects on the principle of ‘comply or explain’ of Codes which encompasses both ‘soft’ of the company to embrace, and that has gained wide recognition as possibly and ‘hard’ law becomes increasingly this must apply ‘to the very DNA of one of the best and most comprehensive evident. Guidance on this vexed issue may the corporate body itself – from top to examples of ‘self-regulation’, questions be obtained from the recently released bottom and from bottom to top’. have nonetheless arisen with respect to King IV Report which lays emphasis on whether it is the most effective way of the outcomes that good governance Just simply checking the box is not enough ensuring that corporations act responsibly. should achieve – namely the exercise of and it is trite that the foundations of good ‘Soft’ law is beneficial only where there is ethical and effective leadership by the corporate governance must rest upon an active compliance by business elites, diligent governing body towards the achievement effective system of checks and balances monitoring by capital market actors, and of an ethical culture, good performance, as highlighted succinctly by Monks and effective control by regulatory elites. On a effective control and legitimacy. King Minow in their book Corporate Governance. critical analysis, have codes of corporate IV also moved from ‘apply or explain’ to ‘In essence, corporate governance is the governance contributed significantly to ‘apply and explain’. structure that is intended: improved corporate governance practices? If they have not, is it time – at least in certain Taking cognisance of the paradigm 1. to make sure that the right questions areas – to rethink and re-evaluate the case shifts in the corporate world, the get asked, and for enhanced reliance on ‘hard law’ so as foundation stones upon which King to provide clearer expectations to ensure IV are built include ethical leadership, 2. that checks and balances are compliance? In short, should corporate the organisation in society, corporate in place to make sure that the governance be by rule or by principle or citizenship, sustainable development, answers reflect what is best for the indeed by some hybrid of the two? stakeholder inclusivity, integrated thinking creation of long-term, sustainable, and integrated reporting. The appeal of renewable value.’ What’s next? King IV lies substantially in its universal Amongst the key causes of the global applicability stating as it does that ‘good With moral hazard appearing to increase financial crisis are the failures of ethical leadership, which is underpinned by the on the part of investors, especially with and effective leadership of corporations, principles of good governance, is equally government intervention following characteristics of which make them valuable in all types of organisations’. the global financial crisis, how do we difficult to regulate let alone ponder over effectively respond to the cultural and the impossibility of legislating on such Conclusion structural challenges that are raised issues. Principles of corporate governance Codes of corporate governance have above? How do we get corporate boards need to be more carefully contextualised come a long way since the publication to move away from the ‘shareholder and diversified, especially in the of the Cadbury Report about a quarter primacy’ model – where only profits transnational domain. Simultaneously, of a century ago. It must be remembered matter as charity has no seat at the the status of and relations between that the committee chaired by Sir board – to one that encompasses a more citizenship, states, transnational Adrian Cadbury was tasked simply diverse range of interests which include corporations and non-governmental to deal with the financial aspects of shareholders, employees, consumers, the organisations in a transnational regulatory corporate governance and that we have community and the environment? Should domain needs much closer consideration. in the intervening period since then we – and would it be too onerous – to Only with these issues addressed can a expanded considerably on the scope of impose upon boards of directors a duty more balanced and fruitful discussion of such codes. On the other hand, the US to consider, and to implement, robust corporate governance mechanisms take adopts a ‘black letter law’ approach with standards for good corporate social place, especially when it comes to a legislative framework setting out the responsibility as a safeguard against assessing the merits of ‘soft’ versus ‘hard’ requirements and resulting penalties for reputational risks? law in a given political economy. non-compliance. It is trite that there is

January 2018 14 Corporate Governance

no ‘one size fits all’ as regards ‘soft’ or corporation reach further outwards so root cause of the crises that we have ‘hard’ law since market development and too must there be a commensurate level experienced to date. maturity may differ across jurisdictions of corporate behaviour that meets the compounded by cultural and/or socio- expectations of the various stakeholders Low Chee Keong FCIS FCS economic considerations. Accordingly which continue to evolve. Associate Professor in Corporate what may work well in one country may Law CUHK Business School not necessarily produce similar results The practice of corporate governance – in another. together with its associated codes as well This article draws from and as legislation – have evolved over the past expands upon the chapter titled That said, what is clear is that there must 25 years during which time numerous ‘Corporate Governance Codes be adherence to some basic common corporate excesses have been witnessed, Under the Spotlight’ in du Plessis sensical practices which transcends leading to the Asian financial crisis in JJ & Low CK (eds), Corporate national boundaries especially since 1997 as well as the global financial crisis Governance Codes for the 21st there is a common denominator in the in 2008. Although a number of fora has Century: International Perspectives corporate governance debate namely been set up to raise and discuss some and Critical Analyses, Springer that companies always involve the use of of the issues, as well as to propose (2017) available at: www.springer. ‘other people’s money’ for which there is a changes, it must be expressly recognised com/gp/book/9783319518671. legitimate right to expect that this will be that, despite all best intentions, we must applied responsibly by those empowered recognise the fragilities of humans which The author can be reached at: to do so. As the tentacles of the modern have invariably been the dominant or [email protected].

CSj is the only publication dedicated to corporate governance in Hong Kong.

Each issue is distributed to over 8,000 members of HKICS, and read by approximately 20,000 individuals.

CSj is the most effective way to source your future Corporate Secretarial colleagues.

To advertise your vacancy in the Careers section, please contact us at: [email protected]

January 2018 15 Corporate Governance

Assessing board performance: an outcomes-based approach

January 2018 16 Corporate Governance

Board evaluations have become an established part of board governance best practice around the world, but John Dinner, President, John T Dinner Board Governance Services, argues their ultimate value for organisations can be increased if an outcomes-based approach to the evaluation process is adopted.

egulators and other oversight bodies organisations consistently demonstrate In doing so, it is recommended the Rhave included board and related leadership in the area of board-related evaluation process design should include evaluation processes as a part of good evaluations, as well as other governance the following: governance practices and guidelines practices. The following represents for more than 25 years. These were themes identified during a broad review • management participation should precipitated by a focus on boards of board-related assessments and be limited to those who have regular and their effectiveness in response to the process used to complete them. interaction with the full board or one significant corporate failures, the lessons These themes reflect best practices and or more of its committees, and learned and an effort to clarify how personal expert experience in conducting good governance is achieved. Since board assessments. • the same confidentiality should be then, there have been regular iterations provided to management as that of guidelines and practices in which Engaging management committed to board members. board evaluation processes have been a The success of board evaluations can consistent component. be enhanced by soliciting input from Reporting should not separate out as many individuals as possible who conclusions reflecting board and However, based on anecdotal evidence, have first hand observation/experience management input. As there tends to be it would appear the approach to board of board performance. In addition a high level of consistency of responses evaluations has not evolved significantly to members of the board, it can be between the two groups, all responses and this article encourages a new focus particularly beneficial to also include (both survey and interviews) should be on governance outcomes, as opposed to members of management or staff in melded into a single assessment report. traditional inputs, when assessing board the process as they bring unique and Where there is disparity of responses, performance and effectiveness. This valid perspectives to the assessment these different perspectives should not premise recognises that sustained efforts process. While management may not be assigned to either the board to adopt and refine governance inputs be well positioned to respond to all or management, as this can have have failed to satisfactorily impact how related issues, they can add an a negative impact on the candour organisations are governed. Governance important perspective to the broader management will exercise in its outcomes result from actually realising evaluation process. assessment of the board. the purported benefits that would result from the effective implementation of Highlights governance inputs. These inputs relate largely to the many component pieces that come under the banners of board • the outcomes-based approach relies on a shift away from governance inputs structure, governance processes and to governance outcomes boardroom dynamics and relationships. • most boards have been measuring governance inputs without undertaking the Optimising board assessments much harder work of understanding the degree to which the intended ends – Boards can easily defend the status the outcomes – are achieved quo in terms of how they evaluate their • this new focus reflects the board’s contribution to organisational success in performance as a team, as well their tangible, relevant ways component pieces. That said, many

January 2018 17 Corporate Governance

used an outsider for their board governance outcomes evaluations in 2013. Spencer Stuart, the international executive search firm, relate to the benefits, predicts that as many as 35% of major payback or reward US companies will follow suit in the next several years. realised when the underlying principles Most North American boards that use an external resource for their board of good governance evaluations also tend to follow the are fully achieved UK approach of ‘every three years’ instead of annually. Board evaluations in the intervening years are generally conducted internally, often using a survey format or short phone calls from the board chair or chair of the nominating/governance committee to each director.

Interviewing evaluation participants other term has been served. The rationale Adopting an outcomes-based There is real value to be derived from for this policy is entirely understandable approach making one-on-one confidential and can be easily supported. It reflects The concept of governance outcomes, interviews as a central part of the a belief that new directors need to have while not revolutionary, is far from assessment process. Relative to relying a certain exposure and service on the mainstream. This approach is new, solely on survey results, interviews board to be able to meaningfully assess innovative, leading edge and, in most are highly effective in uncovering and provide an informed perspective on jurisdictions, largely untested. However, more meaningful, relevant and how well their colleagues deliver on their it is no longer without precedent. thoughtful feedback. In my professional fiduciary duties. The 2016 King Report on Corporate experience, evaluation participants Governance (King IV) in South Africa often view surveys simply as a task to At the same time, there is real value addresses governance outcomes explicitly, be completed. As much as they serve to be derived from all board members representing what the authors cite as the as a useful starting point in a more participating in the board assessment ‘original intellectual thinking of the King rigorous evaluation process, they do not process, despite the limited tenure of Committee’. These governance outcomes always uncover the most salient issues newer directors. Newer directors can include: impacting good governance. bring a fresh perspective and probe different issues that may not be top of • establishing an ethical culture The use of interviews results in increased mind of more veteran board members. demands on directors’ time, but the • creating sustainable organisational expected payback relative to the time Use of external facilitators performance and value creation investment by directors is significant and The provisions of the 2014 UK Corporate worthy of serious consideration. Governance Code, which now require • protecting and building trust in the board evaluations of FTSE 350 companies organisation, its reputation and Participation by new directors to be externally facilitated every three legitimacy Many organisations defer participation years, are clearly the direction in which by new directors in full board assessment board evaluations are heading. About • adequate and effective control by processes until at least a full year or some 19% of the largest public US companies the governing body, and

January 2018 18 Corporate Governance

• setting an example by the board’s and has identified the following as being own ethical behaviour. primary governance outcomes: over time… the practice Arguably, some of these governance • trust and confidence in the work of of assessing board outcomes can be viewed as inputs. Is the board and management on the effectiveness using establishing an ethical culture an outcome part of key stakeholders, particularly in and of itself or does it, in turn, lead an organisation’s owners and the same process and to something else – an outcome (or customers metrics produces outcomes) that boards and organisations in general should pursue? An ethical culture • deep reputational respect across a diminishing returns should lead to trust and confidence in that broader set of stakeholders organisation, the work of the board and the leadership that reports to it. • mission and vision achievement, and Similarly, adequate and effective control • identifying new opportunities the by a board is, surely, a governance input • increasing organisational value. board of directors could leverage to that is fully intended to produce some continue on its good governance greater, more impactful outcome. But An outcomes-focused approach relies journey. to date in the recent history of focus on a markedly different board evaluation on governing well, most boards have model with an entirely new focus Final remarks been measuring these and other inputs – namely a shift away from metrics Over the past quarter century, many without undertaking the much harder related to governance inputs to ones boards have responded positively to new work of identifying, understanding and linked to governance outcomes. This ways of encouraging greater oversight defining metrics that will show proof of new focus reflects the board’s impact effectiveness. One of the most significant the degree to which the intended ends – on the organisations, as opposed to developments has been the practice of the outcomes – are achieved. isolated practices, the board’s value as a regularly assessing board performance. strategic asset to the organisations they Over time, however, the practice of As much as the work of the Institute of oversee, and the board’s contribution assessing board effectiveness using the Corporate Directors in South Africa has to organisational success in tangible, same process and metrics produces helped launch and move the governance relevant ways. diminishing returns. Board performance outcomes agenda forward, there may assessment practices need to evolve as well be more work to determine exactly Assessing governance outcomes is likely well so they are positioned to deliver what constitutes genuine governance to achieve success in the following ways: new insights and serve as a catalyst for outcomes. continuous board improvements. The • refreshing and re-energising the purpose of this paper is to encourage The author believes governance more traditional approach to board boards to adopt this proactive posture outcomes relate to the benefits, payback assessments organisations have in adopting new practices and applying or reward realised when the underlying typically employed, with diminishing greater rigour to its approach to assessing principles of good governance are fully returns resulting from the repetitive their effectiveness. achieved. Examples of these principles process include: leadership; stewardship; John Dinner, President independence; transparency; owner • challenging process participants to John T Dinner Board Governance rights; and accountability. think about how the board performs Services from different perspectives, The author has been exploring the concept frustrating some while energising The author can be reached by email of governance outcomes for many years others, and at: [email protected].

January 2018 19 In Focus

AML/CFT: preparing for the new regime

Two new sets of anti-money laundering and counter-financing of terrorism (AML/CFT) legislation are due to be enacted in Hong Kong by 1 March 2018. Mohan Datwani FCIS FCS(PE), Senior Director and Head of Technical & Research, The Hong Kong Institute of Chartered Secretaries, looks at the background to, and the implications of, Hong Kong’s latest AML/CFT upgrade.

January 2018 20 In Focus

f you have been following the prior to the Panama Paper leaks, the is scheduled for this year. Our overall Idevelopment of AML/CFT law and international community was not really standing as an international financial regulation, you will have noticed that focused on this particular issue. AML/CFT centre is at stake, hence the two sets wholesale changes always follow regulation tended to focus on financial of complex legislation on beneficial triggering events. So, for example, tougher institutions following certain large-scale ownership and TCSP regulation which sanctions compliance requirements money laundering scandals involving the government hopes to push through followed the fateful 911 events of 2001. leading banks, for example laundering the legislative process in an accelerated Similarly, the current renewed emphasis money in Mexico. manner to make them effective by 1 on AML/CFT compliance requirements March 2018. have come in the wake of the Panama Aside from beneficial ownership Papers leak in 2015. disclosure, the international community Beneficial ownership/significant control also began to consider the complementary To ensure compliance with FATF There were around 11.5 million documents FATF Recommendation 22, in respect of Recommendation 24, Hong Kong has leaked from the Panamanian law firm, ‘designated non-financial business and proposed the Companies (Amendment) Mossack Fonseca, which served as trust professions’ (DNFBPs), inclusive of the Bill 2017 (CO Amendments). The CO and corporate service provider (TCSP) TCSP sector. TCSPs serve to incorporate Amendments follow the UK legislation to over 214,000 entities, including and provide services to legal entities, and in Hong Kong we will be creating companies, trusts and foundations. The and as such should conduct appropriate a new Division 2A to Part 12 of the immediate takeaway of the Panama leak customer due diligence before onboarding Companies Ordinance. The main was that people were hiding their wealth their clients. In fact TCSPs, as the first difference between the Hong Kong and and some of these must have been ill- point of contact for establishing and the UK legislation is that the disclosure of gotten gains, including from tax evasion managing legal entities, have a significant beneficial ownership would not be made and other predicate offences which role to play in combating financial crimes. to the public as is being done in the UK, amounts to money laundering. They need to engage in proper customer but is to be retained by the company for due diligence regarding their clients, in searches by law enforcement officers as The Panama Papers leak involved over particular to meet bank standards and well as compliance review by the Registrar 200 countries, 140 state leaders, and requirements as many of their clients of Companies (Companies Registrar). 29 Forbes-listed billionaires and it was need to establish bank accounts. followed by a mad scurry by people, In terms of terminology, instead of especially politicians, to distance Hong Kong is now playing catch up with using the term ‘beneficial owner’, Hong themselves from the scandal. The reaction these global trends. There is renewed Kong as with UK, will focus on persons was pronounced in Europe, where a urgency locally since a mutual evaluation who have significant control, that is number of prominent state leaders were of Hong Kong’s AML/CFT regime by FATF ‘significant controllers’ (SCs) (see ‘The named in the leaked papers. To appear whiter than white, Europe implemented Highlights new laws requiring public disclosure of beneficial ownership at more than 25% of ownership of legal entities. • two sets of complex legislation on beneficial ownership and regulation of trust and company service providers are due to become effective by 1 March 2018 In this connection, there had always been the Financial Action Task Force (FATF) (the • Institute members should study the new legislation and the Companies Registry global AML/CFT agency) Recommendation guidelines, and implement their own compliance programmes 24 which requires countries to prevent • the Institute will also be offering training to its members and thought the misuse of legal entities for money leadership articles in this journal to assist compliance with the new and laundering or terrorist financing through complex AML/CFT regime disclosure of beneficial ownership. But

January 2018 21 In Focus

the main difference between the Hong Kong and the UK legislation is that the disclosure of beneficial ownership would not be made to the public in Hong Kong

meaning of significant control’ text to privacy versus regulation will be an we believe that where in the chain box) over an applicable company. An unending debate. of ownership leading to a registrable ‘applicable company’ means a Hong person there is a listed company, the due Kong private (and not listed) company. The significant controller register diligence should end. Under the current Further, irrespective of whether there is A Hong Kong incorporated private draft legislation, only where in the chain an SC or not, there will be a need for all company must have an SCR whether it of ownership the registrable legal entity Hong Kong private companies to create a has an SC or not. That is, all companies is a Hong Kong listed company, is it significant controller register (SCR). This is are required to conduct due diligence and exempt from the obligation to identify because any Hong Kong private company verification as to whether the company the registrable person. As there is the is supposed to conduct due diligence as to has an SC or not. The process would be a obligation upon a Hong Kong private whether it has an SC or not and to note continuous one. Where the company has company to identify whether it has an SC, this within its SCR. an SC, it would be obliged to enter in the and for the SC to confirm the relevant entry SCR the SC’s related registrable person in the SCR, there are potentially nine case In accordance with emerging as well as the registrable legal entity. scenarios ranging from there being no SC international practice, whether a person In most cases, the registrable person to a company not being sure as to whether is an SC is in general tied to a 25% is a natural person. But a registrable there is an SC or not (see ‘SCR compliance’ test. However, as there are other indicia person could include a specified entity, text box), in addition to the plain vanilla of whether a person is an SC or not, namely a corporation, a government, case where readily available and confirmed the reference to an SC is potentially international organisations and/or a local information is entered into the SCR. open ended. In practice, this makes entity. For example, where Government A identifying an SC especially complex with holds more than 25% interest in a Hong Penalties and other matters trust-using Hong Kong incorporated Kong company through Government There are many technical aspects to the companies. For example, aside from the A Company, then Government A is a CO Amendments which require detailed trustees, would the protector, beneficiary registrable person and Government A study by Institute members. The Companies and settlor be an SC over a trust Company is a registrable legal entity. Registry website is a good starting point, structure? There is no straightforward the draft amendments and the Institute’s answer to this question, which means The Institute made clear in its submission comments have already been circulated that there is scope for law enforcement to the Legislative Council Bills Committee to Institute members. Just as a reminder, officers to seek information. The right considering the draft legislation, that the CO Amendments Bill is riddled with

January 2018 22 In Focus

penalty provisions. If a company fails The AMLO Amendments FATF mutual evaluation. The government to keep an SCR, it and its responsible In addition to the focus on the FATF realised that to maintain Hong Kong’s person faces a Level 4 fine (HK$25,000). Recommendation 24 requirements international reputation as a leading Where particulars are not updated, the relating to the disclosure of beneficial financial centre, there was a need to fine would be at Level 4 plus HK$700 ownership, the international community, regulate beneficial ownership disclosure per day. The steepest penalty is where a together with the Institute, have and DNFPBs. The AMLO Amendments person knowingly or recklessly makes a recognised the equal importance of the extend financial institution standards misleading statement which is false or FATF Recommendation 22 requirements relating to customer due diligence, deceptive in a material particular. This will relating to the customer due diligence record keeping and training to DNFPBs. incur a fine of up to HK$300,000 and two obligations of DNFBPs. The main focus Compliance with these standards will years’ imprisonment. has been on the client onboarding process be less of a challenge for Institute of TCSPs. The Institute’s late Professional members since they have been familiar The company must appoint a designated Services Panel chairman, Paul Moyes, with the Institute’s AML/CFT guidelines representative for complying with the began to implement a long-standing first issued in 2008 and added to most CO Amendments. This must be a natural idea of formalising the Institute’s AML/ recently in 2016. person who is a director or employee of CFT Guidelines for the TCSP sector in the company, or a licensed TCSP (under collaboration with Past Presidents of the The effect of the AMLO Amendments the Anti-Money Laundering and Counter- Institute Natalia Seng FCIS FCE(PE), Edith are to make the Companies Registrar Terrorist Financing (Financial Institutions) Shih FCIS FCS(PE), and Samantha Suen the regulator of TCSPs, and to require Ordinance (AMLO) Amendments discussed FCIS FCS(PE) – who is also the Institute’s all TCSPs to obtain a licence before below). Therefore, by studying the CO current Chief Executive – and the author being permitted to act as a corporate Amendments well, there is potential as draftsman. service provider in matters such as scope for Institute members to become incorporating companies and providing designated representatives for companies The Guidelines took some two years to nominee directors and shareholders, as and this represents a business opportunity muster up support and buy-in from the well as other services detailed under FATF to those willing to invest the time and government and stakeholders. Part of the Recommendation 22. This means that all effort for a detailed understanding of the support came from the fact that Hong Institute members who desire to provide CO Amendments Bill. Kong was going to be subject to the TCSP services to clients (and not only to their own companies), need to have a The meaning of significant control licence. The exception would be where the Institute members are also either a legal professional and/or certified A person has significant control if one or more of the following conditions are met – public accountant, where they could if the person choose to be regulated instead by their professional body. • holds, directly or indirectly, if the company has a share capital, more than 25% of the issued shares in the company, or, if the company does not have a share All those working in the TCSP sector capital, a right or rights to share in more than 25% of the capital, or, as the should familiarise themselves with the case requires, profits of the company AMLO Amendments, along with the three • holds, directly or indirectly, more than 25% of the voting rights in the company sets of guidelines when issued by the Companies Registrar. The issue to flag is • holds, directly or indirectly, the right to appoint or remove a majority of the that the AMLO Amendments are pitched board of directors of the company, and/or at the lowest standards in terms of TCSP • has the right to exercise, or actually exercises, significant influence or control licensing. The current draft legislation over the company. is that anyone over 18 and who has not committed certain crimes under AMLO

January 2018 23 In Focus

and/or other specified Ordinances (the Significant controller register compliance fit and proper test) would be permitted to register themselves as a TCSP. This contrasts with the standards in The • Case 1 – where there is no significant controller. The company needs to state Grand Cayman, BVI and Singapore. in the SCR that it knows, or has reasonable cause to believe that there is no In Singapore’s case, in addition to significant controller. legal professionals, certified public • Case 2 – where there is an unidentified registrable person. The company accountants, Chartered Secretaries, and needs to register in the SCR that it knows or has reasonable cause to believe other professionals, there are provisions that there is a significant controller; and to make a separate note in respect of for those persons that have three years each person that the company has not been able to identify. relevant experience over the last five years to be registrable as a filing agent • Case 3 – where particulars of an identified registrable person are not subject to similar fit and proper test as confirmed. The company needs to register in the SCR that it has identified a with Hong Kong. registrable person but not all the particulars of the person have been confirmed and make a separate note in respect of each person whose required particulars At a LegCo Bills Committee meeting in the company has not been able to confirm. November 2017, which the Institute • Case 4 – where a company’s investigations are ongoing. The company must attended and at which the author spoke, note in its SCR that the company has not yet completed taking reasonable the government made it plain that the steps to ascertain whether it has a significant controller. new AML/CFT legislation was designed The company must note in its to improve Hong Kong’s score at the • Case 5 – where matters have ceased to be true. SCR the matter that has ceased to be true and note in the register the date on upcoming 2018 mutual evaluation. It which the matter ceased to be true. remains to be seen whether standards will have to be raised further. For now, • Case 6 – where notice requirements have not been complied with within Institute members should study the new the specified period. The company must note in its SCR that the company legislation and the Companies Registry has given a notice under Section 653P(2) or 653P(3) in respect of which a guidelines, and implement their own requirement made under Section 653Q or 653R has not been complied with compliance programmes. TCSPs should within the specified period (one month) and make a separate note in the also consider joining the Institute’s AML/ register in respect of each such notice. CFT Charter to demonstrate to the market • Case 7 – where notice requirements have been complied with after the their serious commitment to combat specified period. The company must note in its SCR that the company has financial crimes. The Institute will also given a notice under Section 653P(2) or 653P(3) in respect of which all of the be offering training to its members and requirements made under Section 653Q or 653R have been complied with after thought leadership articles in this journal the specified period and make a separate note in the register in respect of each to assist compliance with the new and such notice. complex AML/CFT regime. • Case 8 – where the change notice requirement is not complied with within Mohan Datwani FCIS FCS(PE) specified period. The company must note in the entry for the addressee in its Senior Director and Head SCR that the company has given the notice to the addressee and note in the of Technical & Research, register that the addressee has failed to comply with the requirement within The Hong Kong Institute of the specified period. Chartered Secretaries • Case 9 – where the change notice requirement is complied with after specified period. The company must note in the entry for the addressee in its More information on the Institute’s SCR that the addressee has complied with all of the requirements after the AML/CFT Charter can be found at: specified period and note in the register the date of the compliance. www.hkics.org.hk.

January 2018 24 A Sparkling Night HKICS Annual Dinner 2018

Guest of Honour Chan Mo-Po, Paul GBM GBS JP FCIS FCS

Financial Secretary the Government of the Hong Kong SAR

Thursday Ballroom 18 January 2018 JW Marriott Hotel 6.30pm Cocktail reception Hong Kong 7.30pm Dinner See you there!

For enquiries, please contact Vicky Lui at 2830 6088 or Vincy Wong at 2830 6048 or [email protected]. The Hong Kong Institute of Chartered Secretaries 香港特許秘書公會 (Incorporated in Hong Kong with limited liability by guarantee) Viewpoint

The Paradise Papers Internet leaks prove the need for responsible business practices

January 2018 26 Viewpoint

Tax ethics are once again in the public spotlight in the wake of the Paradise Papers revelations. Kelly Cooper, Project Manager, CSR Asia, makes the case for companies to create value both for themselves and the communities within which they operate by responsible and transparent tax policies.

n November 2017 the mass leak of 13.4 common threats to business operations. by virtue of their secrecy and the breaking Imillion documents publicly exposed An act as simple as logging on to public of the social contract of taxation. It seems the offshore interests of hundreds of wi-fi can lead to a security breach and that the lessons in risk taking and secrecy high-net-worth individuals and global the theft of confidential, highly sensitive we hoped had been learnt in the fall- businesses. The cache of ultra-sensitive documents. The world’s largest technology out of the global financial crisis, which documents was dubbed The Paradise organisation, Apple, was just one of the was in large part spawned by financial Papers. The documents were leaked from big-name brands exposed by the scandal. malpractice in 2008, seem not to have offshore legal firm Appleby, as well as Apple’s registered offshore holdings been learned. several business services companies meant taxes were disproportionately whose clients include banks, corporations, shouldered by the consumer on purchase Today’s interconnected society has HSI and FTSE 100 companies. The Paradise of Apple products. Paradoxically, the large amassed a new landscape for business Papers detailed how some of the world’s corporation that reaps the profits shifted and customer relationships. It is no wealthiest corporations and individuals them to a low-tax haven in Jersey, UK, longer sufficient for a company to be are avoiding tax by masking their riches in meaning Apple largely avoided paying the most recognisable brand, have a covert tax havens. tax on sales made outside the US. The desirable product or a superior price irony of technology giant Apple having point. Mobile technology has armed The BBC estimated that the sums of its digital data stolen is not lost. It proves, the millennial market with relentless money held in the aforementioned rather unnervingly to some, that not even connectivity and as a result there is an offshore accounts is around 10 trillion the most technology savvy can protect unprecedented demand from the public US dollars, which amounts to almost the themselves from cyber-attack. to disclose product information on a same collective economic output of Japan, scale previously unheard of in the public the UK and France. The leaked Paradise The risks of reduced transparency domain. Subsequently, both the product Papers have been subject to a series of The Paradise Papers release is only the and the organisation behind it must prove international investigations led by the latest in a series of revelations into the themselves worthy of having a positive International Consortium of Investigative aggressive tax avoidance methods of the impact, not only on the individual, but Journalists, and have whipped up a media ultra-rich. While not illegal, the operations on a greater scale; for society and the frenzy fed by public outrage over the lack incite public distrust and disappointment planet. With such high expectations, of honesty and transparency shown by beloved brands and trusted organisations. Highlights Damage to company’s public perception by aggressive tax avoidance • the Paradise Papers detail how some of the world’s wealthiest corporations and In the past, information leaks such individuals are avoiding tax by masking their riches in covert tax havens as these would need to be handed physically from person to person, rarely • tax transparency is essential in the context of today’s technology, which allows gaining much traction, particularly not for the instant transfer of mass information dumps on a global scale. Today’s technology • while not illegal, shifting profits from high-tax countries within which allows for the instant transfer of mass organisations are selling their products to low-tax countries breaks the social information dumps. Fears of digital contract of taxation safety and the risk of cybersecurity are

January 2018 27 Viewpoint

while not illegal, the operations incite public distrust and disappointment by virtue of their secrecy and the breaking of the social contract of taxation

organisations must ask themselves what countries and jurisdictions to tackle BEPS with societies, generating trust and value they bring to the communities tax avoidance strategies that exploit gaps identifying social needs that can be used within which they operate, and to and mismatches in tax rules to artificially by the business to create more value. The understand the risks of being engaged in shift profits to low or no-tax locations. value generated not only benefits the hidden or immoral business practices. business’s bottom line, but simultaneously The necessity of such legislation is proving generates value for society. Subsequently, The public expects and demands the value to be increasingly essential, unless communities hold business in higher of massive corporations to uphold the companies can act on their own volition regard and the bottom line of the business same values as the societies within which to openly share business processes with is supported, creating strong relationships they operate. This includes following the public, garner public trust and support with communities and long-term value societal rules such as paying taxes. and prove themselves worthy of creating for investors. For a long time, we have While it is important to recognise that moral business practices which have a encouraged environmentally friendly organisations are not engaging in illegal long-term relationship and a positive practices and responsible investment, now misconduct, shifting profits from high-tax impact upon society. it is imperative that companies create true countries within which organisations are value for the communities within which selling their products, to low-tax countries Promoting value for business and the they operate, starting with responsible simply results in fewer tax payments being community and transparent contributions through made in the country where the product is To make a profit for shareholders whilst taxation and the proper disclosure of being sold, resulting in lower investments also supporting the community where contributions. for schools, roads and health care to a business operates can be mutually invest in developing the community. There beneficial, and if done correctly will Kelly Cooper, Project Manager is already a call to introduce legislation garner the trust and increase transparency CSR Asia designed to force companies to be open around business practices, lowering about the tax arrangements that they have. the risk to brand and cementing the The author can be contacted at: For example, the OECD’s base erosion and organisation as a trusted member of [email protected]. profit shifting (BEPS) initiative has already society. Business can operate to enhance created a framework agreed by over 100 and serve the community by engaging Copyright: CSR Asia

January 2018 28 Viewpoint

January 2018 29 Viewpoint

Post Panama – the implications for CSPs

Bryane Michael, Senior Fellow, Asian Institute for International Financial Law (AIIFL), Faculty of Law, The University of Hong Kong, looks at the implications for corporate service providers (CSPs) of the tougher regulatory requirements imposed on CSPs in the post Panama Papers environment.

January 2018 30 Viewpoint

raft of new laws promises to change thus seem ripe for industry consolidation A the way that company secretarial as more regulatory requirements force firms attract clients and do business. these firms to offer extra advisory This article provides an except from a services in the areas of compliance, larger report – The Role of Hong Kong’s corporate governance. The simple half- Financial Regulations in Improving day one stop-shop incorporation will Corporate Governance Standards in probably disappear. China: Lessons from the Panama Papers for Hong Kong – looking at the way the A cursory look at the data suggests Panama Papers will change corporate that our proposals (see ‘Our proposals’ governance practices in Hong Kong box text) would cost Hong Kong’s and the Mainland. The report, authored incorporation industry relatively little. by myself and Say Goo, Professor and Across the sector, these firms employ Director of AIIFL, describes how The close to 10,000 people – a number which Hong Kong Institute of Chartered the HKTDC data roughly confirm. If only Secretaries (the Institute) can help 1% of incorporations deal with non- small incorporation agents and Hong Kong companies (that is offshore), intermediaries to move up the value we can assume that new regulations chain or exit the market. would impact the ‘expected value’ of only two firms and US$10 million in The evidence suggests that tightening revenues. If these new regulations choke incorporation rules and strengthening off even 20% of this business, Hong corporate governance would not Kong still only loses about $2 million – radically affect the number of company hardly a huge dent in an industry worth registrations in Hong Kong. Excluding over US$1 billion. Yet, the undeniable outliers (the jumbo-sized global conclusion remains. As roughly 35% of incorporation firms), most of the 1,100 all newly incorporated businesses drop incorporation, secretarial and corporate out after some time, one must question services firms registered by the Hong the long-term effectiveness of these Kong Trade Development Council (HKTDC) incorporation agents. employ on average 10 people. Moreover, we should bear in mind that a very few of What would the remaining incorporation Hong Kong’s incorporation agents’ newly agents morph into? Large international incorporated creations stand the test of companies handling incorporations time. Incorporation agents in Hong Kong in Hong Kong tend to provide a

Highlights

• tougher regulatory requirements are likely to lead to consolidation in the corporate service provider industry in Hong Kong • firms that offer a fuller range of services will remain more competitive • small incorporation agents may need to move up the value chain or exit the market

January 2018 31 Viewpoint

range of services – from advising on incorporation to complex corporate matters like accounting, restructuring, and compliance across borders. Simply complying with the Institute’s AML/ Company secretarial and CFT Charter will push equilibrium other advisers… should employment and compliance expenses in these companies higher – pushing endorse the right to out the smaller and less competitive information as a core firms. Even paying for Thomson Reuters’ value in companies’ World-Check (to check individuals’ background information) will pose a mission statements problem for the smaller firms in the incorporation market.

A professional body like the Institute could help inform incorporation agents rules will change the nature of The post-reform era represents a potential of all sizes about the factors shaping competition in Hong Kong’s corporate boon for company secretarial firms left their market – and provide advice secretarial services sub-sector. standing. They would be offering a greater to those having to change their Firms that offer a fuller range of range of value-added services – and service offerings or exit the market. services – like helping Mainland and thus earn higher profit margins. They As such our 31st recommendation other companies adopt corporate would also attract less ire, ire which encourages the Institute to offer governance reforms – will remain ultimately encouraged hackers to attack workshops explaining how the changes more competitive than the simple Mossack Fonseca in the first place. Even to Hong Kong’s corporate governance incorporation service providers. if the Institute does not agree with this analysis or the recommendations within, Our proposals the Institute will have an important role to play in preparing the industry for the post-Panama transition.

• The Hong Kong Institute of Chartered Secretaries, along with The Law Society Bryane Michael, Senior Fellow of Hong Kong and the Hong Kong Institute of Certified Public Accountants, Asian Institute for International should adopt professional rules to include a ‘presumption of transparency’ Financial Law rather than the current ‘presumption of confidentiality’ to discourage the Faculty of Law, The University of supply and demand for legal/regulatory avoidance. Hong Kong • The Hong Kong Institute of Chartered Secretaries should conduct workshops preparing small incorporation agents and intermediaries to move up the value This article reflects the views chain or exit the market. of the author only. The full • Put a beta version of beneficial ownership registers online which company report – ‘The Role of Hong secretarial advisory and management firms could assist clients with. Kong’s Financial Regulations in Improving Corporate Governance • Company secretarial and other advisers giving advice on key corporate Standards in China: Lessons governance documents should endorse the right to information as a core value from the Panama Papers for Hong in companies’ mission statements. Kong’ – is available online at: For the other 27 recommendations, see the full study (URL provided in the end note). https://papers.ssrn.com/sol3/ papers.cfm?abstract_id=2914865.

January 2018 32 Viewpoint

HKICS Online CPD seminars CS Practical Training Series: Annual General Meeting — Private and Listed Companies ytime anyw n he Options for Winding Up a HK Private Ltd Co — A re

Liquidation vs Deregistration at y o Director Induction/Training & Development u r

ESG Reporting c o

n v

SFC Means Enforcement Business e

n i

HK Incorporated NGOs – Public n

c Governance Standards/Business Review e As Ltd or Guarantee Co under NCO

Handling a Difficult AGM

Registration: http://ecentre.ouhk.edu.hk/cpd/coursesHKICS/coursesOnOfferForHKICS CPD section of HKICS website: www.hkics.org.hk Enquiries: 2830 6011 / 2881 6177 / [email protected]

January 2018 33

The Hong Kong Institute of Chartered Secretaries 香港特許秘書公會 (Incorporated in Hong Kong with limited liability by guarantee) Institute News

Professional Development

Seminars: November 2017

9 November 15 November The rise of corporate risks Company secretarial practical when leveraging digital & training series: the essential social media elements of a corporate compliance programme

Chair: Eric Chan FCIS FCS(PE), Chief Consultant, Reachtop Chair: Susan Lo FCIS FCS(PE), Institute Professional Consulting Ltd Development Committee member, and Executive Director, Speaker: Ryan Lim, Principal Consultant and Founding Partner, Director of Corporate Services and Head of Learning & QED Consulting Pte Ltd Development, Tricor Services Ltd Speaker: Elaine Chong FCIS FCS, General Counsel-Hong Kong, CLP Power HK Ltd

10 November 20 November Risk management Valuation and compliance for developments in Hong Kong corporate transactions

Chair: Stella Lo FCIS FCS, Institute Council member, and Group Chair: Jerry Tong FCIS FCS, Institute Education Committee Company Secretary, Guoco Group Ltd member, and Financial Controller and Company Secretary, Speakers: Alva Lee, Partner, Advisory; and Karan Kumar, Director, Sing Lee Software (Group) Ltd Risk Consulting; KPMG China Speaker: Spencer Tse, Partner, Valuation Advisory Services, PwC HK

13 November 21 November Ready for the proposed Implementing new risk changes in AML/CFT management and ESG regulations? provisions (with case study)

Chair: Jenny Choi FCIS FCS(PE), Institute Professional Services Chair: Terry Wan FCIS FCS(PE), Institute Membership Panel member, and Executive Director, Global Compliance Committee member, and Group Company Secretary, Li & Reporting of Corporate Secretarial Services, Ernst & & Fung Ltd Young Company Secretarial Services Ltd Speakers: Gloria So, Principal; and Winnie Leung, Risk Manager; Speaker: Michael Chan, Regional Compliance Manager, Asia & Shinewing Risk Services Ltd Middle East, Walkers

January 2018 34 Institute News

22 November 28 November Recent developments in Fund structures and beneficial ownership in cross-border insolvency law BVI and Cayman Islands Chair: Edmond Chiu FCIS FCS(PE), Institute Membership Committee member and Professional Services Panel member, and Executive Director, Corporate Services, Chair: Daniel Chow FCIS FCS, Institute Exemption Sub- Corporate & Private Clients, Vistra (Hong Kong) Ltd Committee member, and Senior Managing Director, Speakers: Denise Wong, Partner; and Regina Fan, Counsel Corporate Finance and Restructuring, FTI Consulting (England & Wales); Walkers (Hong Kong) Ltd Speakers: Jamie Stranger, Partner; and Alexander Tang, Senior Associate; Stephenson Harwood Seminar fee discount for HKICS registered students 23 November Effective from 1 January 2017, registered students of the Institute 中国金融科技发展与监管研究 can enjoy a 30% discount on the Institute’s regular ECPD seminars.

Seminar Regular Discounted rate for duration seminar rate registered students

1.5 hours HK$320 HK$230 Chair: Cynthia Chen FCIS FCS, Named Company Secretary, Asiasec Properties Ltd 2 hours HK$400 HK$280 Speaker: Sofia Yao, Senior Partner, Dentons 2.5 hours HK$480 HK$340

ECPD forthcoming seminars

Date Time Topic ECPD points

19 January 2018 6.30pm – 8.50pm Governance for innovation; innovation in governance 2

23 January 2018 6.45pm – 8.15pm Legality and regulation of cryptocurrencies and other digital tokens 1.5

25 January 2018 6.45pm – 8.45pm Directors and senior executives liabilities – SFC’s new regulatory approach 2

29 January 2018 6.45pm – 8.15pm How to resolve shareholder disputes in the case of deceased 1.5 shareholders?

31 January 2018 3.00pm – 5.45pm New connected transactions rules 2.5

1 February 2018 4.00pm – 5.30pm Development of data privacy law in the PRC 1.5

For details of forthcoming seminars, please visit the CPD section of the Institute’s website: www.hkics.org.hk.

January 2018 35 Institute News

Professional Development (continued)

CPD requirements All members and graduates are reminded to observe the deadlines set out below. Failing to comply with the CPD requirements may incur an administrative penalty of HK$3,000 payable upon the Institute’s demand and constitute grounds for disciplinary action by the Institute’s Disciplinary Tribunal as specified in Article 27 of the Institute’s Articles of Association.

CPD year Members and graduates who CPD or ECPD Point accumulation Declaration qualified on or before points required deadline deadline

2017/2018 30 June 2017 15 (at least 3 ECPD points from 30 June 2018 31 July 2018 the Institute’s ECPD seminars)

Key update on the revised CPD Policy (effective from 1 July 2017)

Revised CPD Policy

Basic CPD All members/graduates are required to fulfil the minimum CPD requirements of at least 15 CPD hours per requirements CPD year, at least 3 ECPD hours should be from the Institute’s ECPD seminars.

Accredited The accredited providers of ECPD seminars are listed below. providers of ECPD seminars • Companies Registry • Official Receiver’s Office • Hong Kong Exchanges and Clearing Ltd • Security Bureau • Hong Kong Institute of Certified Public Accountants • The Law Society of Hong Kong • Hong Kong Monetary Authority • The Securities and Futures Commission • Independent Commission Against Corruption • Other organisations considered appropriate • Office of the Privacy Commissioner for Personal Data by the Professional Development Committee

Administrative Where a relevant person: penalty a. fails to file the declaration under Clause 6.2 of the CPD Policy within one month of the end of the previous CPD year; and/or b. fails to supply to the Institute’s satisfaction the requisite information required under any random check referred to under Clause 6.3 of the CPD Policy with the declaration; and/or c. fails, based on other grounds identified by the Institute, as otherwise not having complied with the CPD Policy; the relevant person shall incur an administrative penalty of HK$3,000 payable upon the Institute’s demand should the failure subsist as at the end of 90 days from the end of the previous CPD year, without prejudice to the right of the Institute to refer the matter to the Institute’s Investigation Group in accordance with Clause 3 of the CPD Policy for commencement of discipline.

For details of the revised CPD Policy, please visit CPD Policy under the CPD section of the Institute’s website: www.hkics.org.hk.

January 2018 36 Institute News

Online CPD (e-CPD) seminars The Institute has launched a series of e-CPD seminars in collaboration with The Open University of Hong Kong (OUHK). Through the online learning platform of OUHK, members, graduates and students are able to easily access selected video-recorded seminars with any smart device anytime, anywhere. The launch of e-CPD seminars enables members, graduates and students to schedule their professional learning more flexibly.

Details and registration are available at the CPD courses section of the OUHK website: http://ecentre.ouhk.edu.hk. For enquiries, please contact the Institute’s Professional Development section at: 2830 6011, or email: [email protected].

Membership

Forthcoming membership activities

Date Time Event

18 January 2018 6.30pm – 10.00pm HKICS Annual Dinner 2018 (full)

23 January 2018 7.00pm – 9.30pm Mentorship Programme − mentors’ training (by invitation only)

3 February 2018 2.30pm – 7.30pm Fun and interest group − indoor war game (jointly organised with Hong Kong Institute of Certified Public Accountants and The Hong Kong Institute of Architects)

10 February 2018 2.30pm – 4.30pm Fellows’ Only – visit to Hong Kong Observatory

For details of forthcoming membership activities, please visit the Events section of the Institute’s website: www.hkics.org.hk.

Members’ activities highlights: December 2017

9 December 16 December Members’ Networking – golf fun day Community Service – 关爱独居长者行动 (行动 2)

January 2018 37 Institute News

Membership (continued)

Recruitment of volunteers for single elders Tentative schedule visit programme The Institute organised two community service events February 2018 Kick-off briefing and first visit to single elders in November and December 2017 to raise its members’ March 2018 Volunteer groups’ visit to single elders awareness of the needs of single elders in Hong Kong. The April 2018 Volunteer groups’ visit to single elders participants found both events meaningful and rewarding. The Institute will launch a series of community service May 2018 Gathering for all volunteers and single elders programmes from February to July 2018 whereby volunteers June 2018 Volunteer groups’ visit to single elders will form groups to visit single elders. Members, graduates and students who are willing to commit to the monthly visits July 2018 Gathering for all volunteers and single elders and debriefing during the specified period are invited to join as volunteers.

Interested members, graduates and students are welcome to apply on or before Thursday 8 February 2018. For details, please contact the Membership Section at 2881 6177 or email: [email protected].

Chartered Secretary Mentorship Programme 2018 The Chartered Secretary Mentorship P rogramme is running its fourth term in 2018. The Institute has received a record-breaking number of applications from over 130 mentors and mentees for the 2018 Programme – proof of how mentors and mentees have found the programme to be beneficial and constructive for career and personal development.

On 5 December 2017, a ceremony was held to close the 2017 Programme, and to launch the 2018 Programme. At the ceremony, Institute President Ivan Tam FCIS FCS thanked the mentors for their time and welcomed new participants joining the programme. He also encouraged mentees to make use of this platform to broaden their horizons. Institute Treasurer and Membership Committee Chairman Dr Eva Chan FCIS FCS(PE) gave a review and provided practical tips on maintaining a successful mentoring relationship.

A series of activities will be arranged for the 2018 Programme. Details will be reported in future editions of CSj.

January 2018 38 Institute News

New associates Congratulations to our new associates listed below.

Chan Chun Sing Choi Hau Yung Lam King Fung Mok Hon To, Quinness Wong Chak Kuen Chan Dik Cheung Choi Shuk Mei, Tammy Lam Man Fung Mui Ka Wai Wong Chun Kit, Gally Chan Hiu Leong Chow Kai Yu Lau Mei Fong Ng Chun Chi Wong Chun Sek, Edmund Chan Ka Yan Chow Shu Ting Lau Tsz Shan Ng Hoi Yan, Jennifer Wong Hei Ching Chan Kam Yin Chow Tsz Lun, Aaron Lau Wai Keung Ng Ka Man Wong Hoi Sui Chan Mei Ki Chow Wing Kei Lau Wing Yiu Ng Kim Hung Wong Ka Wai Chan Mei Ping Choy Se Hon Lau Yee Wing Ng Pak Hiu Wong Kin Chung Chan Nga Ting Chu Lok Lai Lau Yin Hing Ng Wai Yee Wong Kwan Yeung Chan Pik Kwan Chui Nga Lem Law Hoi Ching Ng Yat Kwan Wong Man Pui Chan Pui Ching Chung Chor Wai Law Sze Nga Or Kam Ting Wong Mau Shek Chan Sheung Nga Chung Suk Ting Lee Man Na Peng Sisi Wong Pui Yee Chan Suet Yiu Fong Kei Kwong, Karen Lee Man Yu Po Ka Wai Wong Shun Tsz Chan Sze Wai Fong Yi Yeung Lee Sze Wai Poon Kiu Yan Wong Sze Man Chan Ting Ho Chiu Yee Lee Ying Yeung, Clive Pui Joanne Wong Sze Man, Nana Chan Tsz Yeung Ho Ka Ki, Vicki Lei Ming Fung Qiu Shaomeng Wong Tsun Wah Chan Wai Han, Vivian Ho Siu Wing Leong Kai Weng, Subrina Shi Shaoming Wong Wing Gee Chan Wai Yee Ho Ting Shan, Suki Leung Heung Ping Shing Wai Kwan Wong Yau Kit Chan Wing Wing Ho Wai Kuen Leung Ngai Nam, Cara Shum Yick Chun Wong Yu Chan Yip Keung Huang Yin Leung Shui Bing Siu Wing Shan Wong Yuk Kwan, Jennifer Chan Yip Wang Hui Ka Yan Leung Sze Ming Sum Suet Yi Yau Yan Yi Chan Yuen Sze Ip Tsz Sum Leung Wai Hang, Victoria Sung Kit Lin Yeung Bo Yee Cheng Kwai Yuk Kaur Satpreet Leung Wing Chi Tam Lai Ching Yeung Ian Ian Cheng Chi Chung, Kevin Kwan Sau In Leung Yuet Ting Tang Hoi Ting Yeung Kam Chi Cheng Ka Yan Kwok Chun Yu Li Kit Chung Tang Po Man Yeung Ming Man Cheng Pak Kay Kwok Po King Li Kwok Fat Ting Siu Bong Yeung Siu Wai, Kitty Cheung Hing Lung, Raphael Kwok Yee Tai Li Wing Wah Tong Ho Fai Yim Wing Sze Cheung Hoi Man Kwong Chung In Li Yu Ming Tong Oi Tai Yip Wai Ching Cheung Hong Ting Kwong Ka Ki Li Yuen Shan Tsang Kwai Ping Yiu Ho Pui Cheung Ka Lai Lai Mei Ki Lo Chu Wing Tsang Siu Kit Yu Oi Ling Cheung Ka Lun, Karen Lai Wai Leuk Lo Kwan Yeung Tse Kwan Ting Yuen Lok Lam, Lorraine Cheung Sin Kei Lai Wing Kwan Lo Wai Sum Tse Pui On Yuen Sin Hang Cheung Sin Ping Lam Chi Fai Lui Chi Hin Tse Shing Wa Yuen Yee Tak Cheung Wan Sze Lam Chi Wai Lun Hau Mun Tse Sui Lun Yung Pik Chu, Judy Cheung Wing Suet Lam Ho Kuen Ma Sui Hung Tsoi Wing Ki Zhou Xiaoke Ching Tsui Wah Lam Ho Yan Mak Po Man, Cherie Wan Ho Yan Chiu Ka Ming Lam Hoi Yan Mok Hoi Ying Wan Wing Yi, Carol

January 2018 39 Institute News

Membership (continued)

New graduates Congratulations to our new graduates listed below.

Cheng Pui Shan Lau Tsz Wai Li Cheuk Hung Luo Shuyu Wong Pui Yue Chung Yuk Mei Leung Siu Miu Lo Shuk Yee Ng Sui Yin Zhang Mengchi

Advocacy

Chief Executive visits HKSAR Beijing Office President attends the inauguration ceremony On 23 November 2017, Institute Chief Executive Samantha Suen of the China 100 Board Secretaries Committee FCIS FCS(PE) and Professional Development Senior Manager Ken Forum Yiu ACIS ACS(PE), visited The Office of the Government of the On 25 November 2017, Institute President Ivan Tam FCIS FCS Hong Kong Special Administrative Region of the People’s Republic attended the ‘China Financial Technology Innovation and Listed of China in Beijing (HKSAR Beijing Office) and met with HKSAR Companies Industry Development Forum’ and the ’Launching Beijing Office’s Assistant Director Mandy Wong and Commercial Ceremony of the China 100 Board Secretaries Committee Forum’, Relations Officer Emily Tse. They discussed the development of and delivered a congratulatory speech on behalf of the Institute the Chartered Secretarial profession in the Mainland and the at the inauguration ceremony of the China 100 Board Secretaries strength of Hong Kong as a corporate governance hub for Asia. Committee Forum.

Institute Vice-President Dr Gao Wei FCIS FCS(PE) who is one of the founder members of the China 100 Board Secretaries Committee Forum and Beijing Representative Office Chief Representative Kenneth Jiang FCIS FCS(PE) also attended this event. The three Institute delegates communicated and shared views on relevant topics with the board secretaries, other professionals and officials who were at this event.

At the HKSAR Beijing Office At the inauguration ceremony

January 2018 40 Institute News

Advocacy (continued)

HKICS President and Council for 2018 The Institute held its Annual General Meeting (AGM) on 15 December 2017 with over 30 members attending.

At the Council meeting following the AGM, the Honorary Officers for 2018 were elected with David Fu FCIS FCS(PE) being elected as President. Mr Fu is currently the Company Secretary of Swire Pacific Ltd, Cathay Pacific Airways Ltd, Hong Kong Aircraft Engineering Company Ltd, and Swire Properties Ltd. Ivan Tam FCIS FCS, who will retire from the presidency The Council after two years on 31 December 2017 will continue to serve as a Council member in the capacity of Immediate Past A thank you dinner was held to express appreciation to the President. Dr Maurice Ngai FCIS FCS(PE) will continue to serve as Council, Committee, Panel and Working Group members of the a Council member in the capacity of Past President. Edith Shih Institute, members and peers who have contributed to student FCIS FCS(PE) will retire from Council on 31 December 2017 after and member development and professional training, as well as serving as an ex-officio member for three years. The Institute those who have supported the Institute by taking up external would like to thank Ms Shih for her contributions. appointments in other government bodies and associations.

HKICS Council 2018

Honorary Officers: David Fu FCIS FCS(PE) President Dr Gao Wei FCIS FCS(PE) Vice-President (re-elected to Council) Paul Stafford FCIS FCS(PE) Vice-President Dr Eva Chan FCIS FCS(PE) Treasurer (re-elected to Council)

Council Members: At the AGM Professor Alan Au FCIS FCS Gillian Meller FCIS FCS Arthur Lee FCIS FCS David Simmonds FCIS FCS (newly elected) (newly elected) Ernest Lee FCIS FCS(PE) Bernard Wu FCIS FCS Stella Lo FCIS FCS Wendy Yung FCIS FCS

Ex-officio: Ivan Tam FCIS FCS Immediate Past President Dr Maurice Ngai FCIS FCS(PE) Past President

At the thank you dinner

January 2018 41 Institute News

Advocacy (continued)

President’s visit to Beijing On 20 and 21 November 2017, an Institute Listed Companies Supervision Department the implementation of internal control delegation led by Institute President Ivan Deng Ke. Mr Yang expressed his systems and their effectiveness. Mr Peng Tam FCIS FCS visited four organisations in appreciation of the Institute’s efforts in suggested the Institute consider collating Beijing, namely: China Securities Regulatory providing professional training services to information on the effectiveness of internal Commission (CSRC), Insurance Association relevant personnel of Mainland companies control systems of other jurisdictions, and of China (IAC), Ministry of Finance (MoF), listed in Hong Kong. CSRC will continue also consider including an internal control and State-owned Assets Supervision and to support the Institute’s initiatives to element in the Institute’s professional Administration Commission (SASAC). Other facilitate the development of both the qualification scheme. delegates participating were Past President Hong Kong and Mainland market. Dr Maurice Ngai FCIS FCS(PE), Council The Institute delegates also took the member Bernard Wu FCIS FCS, Chief During the visit to IAC, Institute delegates opportunity to meet with several Institute Executive Samantha Suen FCIS FCS(PE) met with IAC Deputy Secretary-General Li members and students in Beijing on 20 and Beijing Representative Office Chief Xiaowu, and discussed future cooperation November 2017. They updated members Representative Kenneth Jiang FCIS FCS(PE). in 2018 and promotion of board secretary and students with the Institute’s latest professionalisation. At the meeting developments and listened to their During the visit to CSRC, Institute delegates with SASAC Deputy Director-General of opinions and suggestions on building introduced the latest developments of the Enterprises Reform Bureau Yang Jingbai, up the board secretary profession and Chartered Secretarial profession and the the two parties discussed and agreed the Institute’s professional development Institute’s development in Mainland China, to consider cooperation in terms of activities in Mainland China. and discussed with Mainland officials topics promoting communication and experience that were of concern to both parties. At sharing among board secretaries and The Institute would like to express its the meeting with CSRC officials, Institute joint research on corporate governance appreciation to all the officials, members delegates met with: CSRC Vice-Chairman issues of centrally administrated and students with whom the Institute Jiang Yang; Head of International Affairs enterprises. Institute delegates also met delegates met during this visit in Beijing for Department Jiang Feng; Head of Marketing with MoF Deputy Inspector, Accounting their time and support. Department Li Jizun; and Deputy Head of Department, Wang Peng, and discussed

At CSRC At IAC At MoF

At SASAC Meeting with Institute members and students in Beijing

January 2018 42 Institute News

Chief Executive talks at 2017 Forum for Corporate Governance Professionals in Taipei Institute Chief Executive Samantha Suen FCIS FCS(PE) was a speaker at the Forum for Corporate Governance Professionals in Taipei on 6 December 2017 organised jointly by the Governance Professionals Institute of Taiwan, Taiwan Corporate Governance Association, National Chengchi University and KPMG Taiwan. Ms Suen introduced the Institute, The Institute of Chartered Secretaries and Administrators, the Chartered Secretarial profession, and the roles and functions of company secretaries in the corporate world. The other speakers covered the importance and value of having corporate governance professionals in corporations as well as their roles and functions. The forum was attended by about 100 participants who were professionals and university students. At the forum

Engage your stak holderse

Investor communications In-house newsletters

Annual reports Professional magazines

Sustainability reports Copywriting

T: +852 3796 3060 E: [email protected] W: www.ninehillsmedia.com

January 2018 43 Institute News

Advocacy (continued)

The 45th AP ECPD seminars The Institute held its 45th Affiliated Persons Enhanced Continuing Professional Development (AP ECPD) seminars on the topic of ‘Annual Financial Audit and Annual Reporting’ in Beijing between 22 and 24 November 2017. The seminars attracted over 250 participants from H-share, A+H share, red-chip, A-share and to- be-listed companies.

Speakers from Hong Kong Exchanges and Clearing Ltd, senior professionals and board secretaries shared their knowledge and experience on a wide range of topics including: the opportunities and challenges of investor education in the context of the increased interconnection between Hong Kong and Mainland China; updates on the latest amendments of the Hong Kong Stock Institute representatives with speakers Exchange listing regulations; continuous obligations and penalties for infringement for directors of listed companies; financial audit and annual report preparation; inside information monitoring and disclosure, and counter-measures for insider dealing; AGM trend analysis of major global markets; new perspectives and thinking in risk management; investor relationships and financial public relations in the context of the increased interconnection between Hong Kong and Mainland China; the implementation of the corporate governance requirement regarding putting party- building content into listed companies’ Articles of Associations; and the communication with international institutional investors. At the group discussion session, the participants were grouped by industries and discussed the problems they encountered in the preparation of Environmental, Social and Governance reports and At the seminar shared their practical experiences.

Institute Vice-President Dr Gao Wei FCIS FCS(PE), Past President The Institute would like to thank the speakers, participants, event Dr Maurice Ngai FCIS FCS(PE), Council member Bernard Wu FCIS associate organiser (Shinewing CPA), supporting organisations FCS, Chief Executive Samantha Suen FCIS FCS(PE) and Beijing (Computershare Hong Kong Investor Services Ltd, Herbert Smith Representative Office Chief Representative Kenneth Jiang FCIS Freehills LLP, Ernest & Young, Tricor Services Ltd) and sponsor FCS(PE), chaired sessions at the seminars. (Equity Financial Printing Ltd), for their support.

January 2018 44 Institute News

The 7th Golden Bauhinia Hong Kong summit and award ceremony The Institute participated in the 7th Golden Bauhinia Hong • Huang Wensheng FCIS FCS, China Petroleum & Chemical Kong Summit and Awards Presentation Ceremony organised Corporation by Ta Kung Wen Wei on 30 November 2017 as one of the joint organisers. Institute President Ivan Tam FCIS FCS was one of • Li Jiewen, China National Offshore Oil Corporation the officiating guests. He delivered a speech and presented the ‘Listed Companies of Most Investment Value’ awards (最具 • Wu Enlai, PetroChina Company Ltd 投资价值上市公司奖项) at the ceremony. In appreciation of its contribution, the Institute received the ‘20th Anniversary • Xie Bing FCIS FCS, China Southern Airlines of Hong Kong’s Return to Motherland Special Contribution to Capital Market’ award (香港回归二十周年资本市场特别贡献奖) • Xie Jilong, CRRC Corporation Ltd this year. Institute Council member Bernard Wu FCIS FCS, Chief Executive Samantha Suen FCIS FCS(PE) and Senior Director and • Yu Xingxi, China Railway Construction Corporation Ltd Head of Technical & Research Mohan Datwani FCIS FCS(PE) also attended this ceremony. • Zhang Zhankui, Aluminum Corporation of China Ltd

Congratulations to the following Institute members and Affiliated Persons who received the ‘Best Board Secretaries of Listed Companies’ awards (最佳上市公司董事会秘书奖项) (in alphabetical order):

Group photo with the ‘Listed Companies of Most Investment Value’ awardees Ivan Tam at the ceremony

January 2018 45 Institute News

Advocacy (continued)

Inauguration and first meeting of the Institute’s Mainland China Technical Consultation Panel The Institute established its Mainland China Technical Consultation Panel (MCTCP) this year as a panel of the Institute’s Mainland China Focus Group. It was established to provide technical support on issues of common interests of the Mainland board secretary profession through meetings, consultations and guidelines.

The MCTCP comprises 13 members with diverse expertise. Institute Vice-President Dr Gao Wei FCIS FCS(PE) was appointed by Institute Council as the MCTCP Chairman. Board Secretary of China Shenhua At the first MCTCP meeting Energy Company Ltd Huang Qing FCIS FCS, and former Board Secretary of Haitong Securities Dr Jin Xiaobin FCIS FCS, were appointed as MCTCP Vice-Chairmen. At the meeting, which was chaired by Dr Gao Wei, amongst other things, three Interest Groups were established under The MCTCP held its first meeting on 28 November 2017 at the MCTCP, namely: Regulation Consultation Group, Practical Institute’s Beijing Representative Office (BRO) with 11 members Guidelines Group and Corporate Governance Practical Training participating. Institute Chief Executive Samantha Suen FCIS Materials Development Group. Members also had a full FCS(PE), Professional Development Director Lydia Kan FCIS FCS(PE) discussion on proposed projects and agreed to work on two and BRO Chief Representative Kenneth Jiang FCIS FCS(PE) also projects in 2018. attended the meeting.

Secretariat Christmas dinner On 20 December 2017, a Christmas dinner for the Institute secretariat was held. Institute Council member Bernard Wu FCIS FCS, President Ivan Tam FCIS FCS and newly elected Council member for 2018 Arthur Lee FCIS FCS joined the dinner and the seasonal celebrations. This year, some family members of secretariat staff also attended. Thanks to the generous contributions of lucky draw prizes by the Council, the Chief Executive and Department Heads, the secretariat staff and their families spent a joyous dinner gathering together.

At the dinner

January 2018 46 Student News

International Qualifying Scheme (IQS) examinations

June 2018 diet schedule

Tuesday Wednesday Thursday Friday 5 June 2018 6 June 2018 7 June 2018 8 June 2018 Hong Kong Financial Hong Kong Strategic and Operations Corporate Financial 9.30am – 12.30pm Accounting Corporate Law Management Management

2.00pm – 5.00pm Hong Kong Taxation Corporate Governance Corporate Administration Corporate Secretaryship

Please enrol between 1 and 31 March 2018.

IQS study packs go green Recommended reading list The Institute has launched online versions of four IQS study packs. This service, which is update – Hong Kong Taxation free to all registered students, enables students to schedule their professional learning and The recommended reading list of Hong studies more flexibly, economically and in an environment-friendly manner. Students are Kong Taxation has been updated with highly encouraged to activate their online account and obtain access to the study packs for Hong Kong Taxation and Tax Planning examination revision as soon as possible. For details of the account activation, please select as the main reading material. Starting Education under the News section of the Institute’s website: www.hkics.org.hk, or refer to from December 2017, the Institute’s the Student Handbook of the Institute. Hong Kong Taxation study outline will no longer be available for sale. For details For further information regarding the online study packs, please contact Ally Cheung of the updated recommended readings at: 2830 6031, or Ruby Ng at: 2830 6006, or email: [email protected]. For technical list of Hong Kong Taxation, please questions regarding the PrimeLaw account, please contact Wolter Kluwer’s customer select ‘recommended readings’ of the service: [email protected]. ‘International Qualifying Scheme (IQS)’ under the Studentship section of the Institute’s website: www.hkics.org.hk.

Postgraduate Programme in Corporate Governance in Shanghai – student orientation The 2017/2018 intake of the Postgraduate Programme in Corporate Governance (PGPCG) offered by The Open University of Hong Kong in Shanghai, commenced in September 2017. An orientation for the PGPCG students was held at the East China University of Science and Technology (ECUST/上海华东理工大学) in Shanghai on 4 November 2017. During the orientation, Institute Education and Examinations Director Candy Wong introduced the Institute and its studentship registration policy to the attending students. At the orientation

January 2018 47 Student News

Studentship

HKICS Academic Advisory Panel luncheon The Institute’s Academic Advisory Panel (AAP) luncheon was held on 30 November 2017. The luncheon was hosted by Institute Council member and Education Committee Chairman David Fu FCIS FCS(PE), Education Committee Vice- Chairman Polly Wong FCIS FCS(PE) and Education Committee member Winnie Li FCIS FCS; and attended by Chief Executive Samantha Suen FCIS FCS(PE), Education and Examinations Director Candy Wong, as well as 12 representatives from local universities and tertiary educational AAP members institutions. The luncheon provided a platform for discussion on the Institute’s Professor Kevin Lam, Head and Professor, Anna Sum FCIS FCS, Senior Lecturer, recent developments and other related Department of Accountancy, Programme Lee Shau Kee School of Business and educational matters. Director of BBA-CG Programme, Hang Administration, The Open University of Seng Management College Hong Kong Guests (in alphabetical order) Professor Dennis Chan, Associate Dr Peter Lau, Associate Dean, School of Dr Claire Wilson, Head, Department of Professor of Business Education, Business, Hong Kong Baptist University Law and Business, Hong Kong Shue Yan Department of Accounting, Hong Kong University University of Science and Technology Professor CK Low FCIS FCS, Associate Professor in Corporate Law, CUHK Dr Raymond Wong, Associate Head, Dr Suwina Cheng, Assistant Professor, Business School, The Chinese University of Associate Professor, Department of Department of Accountancy, Faculty of Hong Kong Accountancy, City University of Hong Business, Lingnan University Kong Dr Christina Ng ACIS ACS, Principal Professor David C Donald, Professor, Lecturer, Faculty of Business and Dr Susana Yuen ACIS ACS, Professor and Faculty of Law, The Chinese University of Economics, The University of Hong Kong Dean, School of Business and Hospitality Hong Kong Management, Caritas Institute of Higher Dr Mark Ng, Associate Head, Department Education of Business Administration, Hong Kong Shue Yan University

Policy – payment reminder Studentship renewal Exemption fees Students whose studentship expired in November 2017 Students whose exemption was approved via confirmation letter are reminded to settle the renewal payment by Thursday in October 2017 are reminded to settle the exemption fee by 25 January 2018. Saturday 27 January 2018.

January 2018 48 Join us to explore what a career in Chartered Secretary and Governance profession can offer.

Insights of Chartered Secretaries Interview preparation workshop On-site internship interview Networking and refreshments Lucky draw

Open to undergraduates of all degree disciplines and HKICS Registered Students Chartered Secretaries Preview Day

Saturday, 17 March 2018 | 1.30pm–5.00pm Salon Rooms, 5/F, Harbour Grand Hong Kong, 23 Oil Street, North Point, Hong Kong (MTR Fortress Hill station, Exit A) Free Admission For registration and enquiries, please contact Eva Cheung at 2830 6019 or [email protected].

Welcome refreshment Coffee break sponsor Sponsors Media Partner sponsor

Supporting organisation

The Hong Kong Institute of Chartered Secretaries 香港特許秘書公會 (Incorporated in Hong Kong with limited liability by guarantee) www.hkics.org.hk

Career Day_2018_yellow.indd 2 22/12/17 3:58 pm