In a detailed report produced for the Hong Kong Institute of Certified Public Accountants (HKICPA), Syren Johnstone and Say H Goo, both from the Faculty of Law, The University of Hong Kong, have proposed a number of wide ranging recommendations for improving Hong Kong’s corporate governance system.
The report examined the corporate governance systems of the United Kingdom, the United States, Mainland China, and Singapore. While Hong Kong’s corporate governance system is generally on a par with international best practices, the report suggests more needs to be done in several areas.
This includes adopting better mechanisms to protect shareholders from potential abuses of the board through improved transparency and strengthening the role of independent non-executive directors. The ability of shareholders to bring actions has fallen behind other markets, particularly the UK and Mainland China, which have facilitated collective redress. A number of the recommendations would enable regulators to undertake more effective and graduated means of consequence management without requiring changes to the current model of regulatory oversight.
While more discussion and debate will be necessary in order to agree on detailed changes, the HKICPA has stated it is ready to work with other stakeholders to facilitate further progress in Hong Kong’s corporate governance development.
The study “Report on Improving Corporate Governance in Hong Kong” is available on the HKICPA’s website.