Gist of Q&A
Q1:
How can the company secretary get assistance or support from board members to enhance corporate governance if the company is not so willing to spend time and resources on it?
 
Dr Charles LAU Kin-shing:

  • Enhancing the company's transparency and ensuring that the board members are well informed of the company's affair, in written format are important. The company secretary has the responsibility to explain to the board members of the consequences, on both board members and the company, in case of any violation of the rules. It will be easier for the company secretary to promote corporate governance if the measures mentioned above can be implemented. As a professional, the company secretary plays an important role in the company's governance and he should play this role to the full. Furthermore, the company secretaries may turn to the INEDs for assistance.

Dr Moses CHENG Mo-chi, GBS, JP:

  • Once the company's senior management realises that corporate governance could help the company run smoothly and bring more returns to the investors, I believe they are more willing to adopt best practices in corporate governance in their companies.

Dr Peter LAU Kwok-kuen:

  • There are two types of directors, namely executive directors and non-executive directors or INEDs. If the executive directors have violated the rules and thus disagree to promote corporate governance, the company secretary must not tolerate with it. However, if the executive directors disagree simply due to busy schedule or ignorance, the company secretary can turn to the INEDs and it may be a way out.

 
Q2:
Quite a number of the listed companies in Hong Kong are family-run. Does it affect the corporate governance performance of the said companies?
 
Dr Gregg LI:

  • About 60% of the listed companies in Asia are family run. They hold different views on governance and to a large extent, it depends on the governance of the family itself. In general, the quality of the governance of the listed vehicle is pretty much set in context by the quality and understanding of good governance by the family. The family governance will directly affect the company's corporate governance and one example where this has an impact is the succession of the next generation. A family may want to place a son into a listed vehicle, to encourage family ownership, but he may not be the best candidate to run the firm. A few family businesses are aware that for a firm to have sustainable value, the issue of succession must be formalised and rigorous. Professionals must not believe there is a glass ceiling and that the family treasures professional management. This is complicated and if those family-run listed companies are willing to tackle this issue, it means they are ready to perfect governance of their companies. This is a good sign.