BritCham HK’s webinar on the Role of outside advisers
On 2 February 2021, as an author of the HKEX’s “Making inroads into good Corporate Governance and ESG management”, Julia Charlton appeared as a panelist on BritCham HK’s webinar. Julia shared practical insights on how diverse professionals can contribute to the CG and ESG journey of an HKEX listed company. The panelists discussed embedding corporate governance and ESG procedures and structures within HKEX listed companies as well as the value of designing and implementing best practices in ESG.
Risks Section of a listing applicant’s listing documents to include a section on corporate governance
Disclose the board’s role in corporate governance
Disclose the role of the risk management committee and provide details of qualifications and experiences of those personnel in charge
THE HKEX GUIDANCE LETTER GL86-16
The Guidance Letter makes specific mention of a company’s CG and ESG structures
Listing applicants are expected to demonstrate compliance with the HKEX CG and ESG obligations upon listing
The board of a listing applicant is encouraged to appoint appropriate directors to assist with the formulation and adoption of CG and ESG measures and policies
Listing applicants are advised to have in place effective CG and ESG measures well in advance to ensure compliance upon listing
Disclose the board’s role in corporate governance
A listing applicant is encouraged to rely on outside advisers to assist the board in complying with its CG and ESG obligations
THE DIGITAL BOARDROOM
good corporate governance
streamline workflows
create a secure and organised virtual boardroom
improve efficiency, accountability and compliance
THE COMPANY SECRETARY
HKEX Main Board Listing Rule 3.28 requires that every listed company appoint a company secretary
provides ongoing support to the board
ensures regulatory compliance (CG and ESG included)
creates and manages effective systems
“A company secretary is not a figure a board of directors would usually flash and show to other people, but when something goes wrong, a good company secretary can save the day by demonstrating that a sound and vigorously followed control mechanism is in place”
THE COMPANY SECRETARY ROLE
Traditional role
corporate governance
supports the board
facilitate shareholders’ and investors’ communications
induction and professional development of directors
Expanded and evolved role
know-your-client
anti-money laundering regulations
responsibilities of the company secretary have become increasingly more complex
CG and ESG
COMPLAINCE ADVISERS
HKEX Main Board Listing Rule 3A.19 requires that a listed company retain a compliance adviser for the period commencing on the date of listing and ending on the publication of its financial results for the first full financial year after listing
work alongside the company secretary to support the listed company by advising on announcements, connected transactions, use of IPO proceeds and explain listing rules requirements
assist with corporate governance structures and policies
the board must engage the compliance adviser meaningfully and adopt a corporate governance mindset from the outset
INTERNAL CONTROLS CONSULTANT
Why an internal controls consultant ?
assist the board with the development and implementation of internal control systems and structures
assist the board with maintaining appropriate risk management and internal controls systems
assist the listed company with meeting shareholder expectations in relation CG and ESG governance
conduct ongoing risk assessments to identify ‘gaps’ and shortcomings
THE SOLICITOR
Annual retainer
Advise on CG and ESG
CG and ESG committees and their reporting obligations
PUBLIC RELATIONS
The role of a public relations consultant must not be overlooked
Increase in shareholder activism and demands:
communication is extremely important
shape the media’s perception
maintain communication channels
The HKEX’s Corporate Governance Code outlines five core principles of corporate governance. One of these being communication with shareholders.
ESG CONSULTANTS
raising awareness, building capacity and acting as the custodian for ESG matters
central figure for ESG strategy and its implementation
build capacity within the board and add diversity of perspectives and thinking to the board
A listed company must publish its ESG report on an annual basis regarding the same period covered in its annual report (HKEX Main Board Listing Rules appendix 27, rule 4)
GREEN FINANCE AND CERTIFICATIONS
green finance and sustainable business have strong financial and societal benefits
The HKEX Sustainable and Green Exchange (STAGE)
STAGE aims to promote green finance and sustainable integration across asset classes and product types
The Hong Kong Quality Assurance Agency (HKQAA) can provide green finance certifications for green bonds and other green investment products
