governance is not just about adopting best practices; it also entails a moral and ethical mindset.
The Hong Kong Chartered Governance Institute (the Institute) is a professional institute representing Chartered Secretaries and Chartered Governance Professionals in Hong Kong and the Mainland. The Institute is also the Hong Kong/China Division of The Chartered Governance Institute as part of a global profession promoting governance.
As senior governance practitioners, members of the Institute now play a leading role in advising boards on good governance practices in increasingly regulated and risk- conscious environments. In May 2020, to raise awareness of the work of governance professionals in Hong Kong, the Institute launched its 'Careers in Governance' project. The project gives a personal and professional portrait of members and students of the Institute in Hong Kong, featuring their views on governance, and their career paths.
The Careers in Governance project not only focuses on those who have reached the pinnacle of their careers – there are also portraits of recent graduates and students of the Institute who represent the future of the profession. The project reveals the people behind the profession and helps to raise awareness of what it means to possess the Chartered Secretary and Chartered Governance Professional dual qualification. Governance professionals can specialise in very different areas of practice and they can hold very different job titles, but they are linked by their dedication to excellence in governance.
Careers in governance
Given the increasing complexity of the regulatory framework within which companies must operate, and the increasing awareness of the need for good corporate governance, the role of the Company Secretary and Governance Professional will become increasingly more important in Hong Kong and the Mainland of China.
FCG(CS, CGP) HKFCG(CS, CGP)(PE)
the work of a governance professional is not only a compliance exercise, they should always be looking for opportunities to bring improvements to internal processes.
governance professionals...have to be able to add value to their organisations beyond just compliance
the advisory role of governance professionals will continue to grow, which will place greater emphasis on people and influencing skills to supplement the core technical skills of governance professionals
a successful governance professional protects and advances the values of an organisation and the value of that organisation.
the work of a governance professional is not a back office job, it's more about what goes on in the board room
History of the Profession
In 1891, when a group of 18 company secretaries got together in the UK to form the Institute of Secretaries of Joint Stock Companies (Institute of Secretaries), members of the Chartered Secretary profession were still largely seen as administrative officers. They were best known as the company officers who arranged board and shareholder meetings, took the minutes of board meetings and managed the company’s statutory registers and filings.
In the intervening 130 years, much has changed. The importance of good governance, applies not only for organisations commercial and not-for-profit, but also for the whole of the capital market and societies within which they operate. Alongside this development is the increasing importance of the roles of governance professionals.
In recent years, the Institute has been implementing a repositioning exercise to broaden the understanding of the governance role of company secretaries.
This led to the launch in 2019 of the dual qualification of Chartered Secretary and Chartered Governance Professional (CS/CGP), and the launch in 2020 of an updated qualifying programme – the Chartered Governance Qualifying Programme (CGQP). The CGQP, together with the continuing professional development (CPD) services provided by HKCGI, provide focused elements relating to governance, board dynamics and risk management in the training of members. All HKCGI members have successfully transitioned to the new designation and are eligible for the new post-nominals of FCG HKFCG for Fellows and ACG HKACG for Associates. Going forward, students who successfully complete the CGQP will attain the dual qualification as well.
This repositioning exercise culminated in the adoption of the HKCGI's current name, in 20 July 2021, in line with the recognition of the governance roles and responsibilities performed by its members, and the global convergence towards the importance of governance.
Chartered Governance Profession Today
The core functions of the traditional company secretary are diverse but, focused on facilitating effective decision-making by the board and ensuring effective internal controls. Company secretaries have always had a seat on the board – in the administrative role of minute-taker and a trusted adviser in regulatory compliance and governance. The company secretary therefore acts as de facto 'CGOs' – chief governance officers – of their organisations.
Hong Kong's regulators are keen to ensure that listed companies get the full benefit of the company secretary role. Under a new Listing Rule effective from 3 July 2021, a company secretary is expressly recongnised as part of ‘senior management’ in a listed company. The Hong Kong's Corporate Governance Code (the Code), together with the Guidance for Boards and Directors (the Guidance) published by Hong Kong Exchanges and Clearing Ltd (HKEX), provide a good summary of the key benefits company secretaries bring to the organisations they work for. HKEX's Guidance, for example, highlights these company secretaries should:
- help issuers construct and maintain a sound and effective corporate governance framework and, in particular, a set of risk management and internal control systems to ensure regulatory compliance
- be aware of developments in laws, rules and regulations that may affect issuers' business and operation
- be pro-active and think about issues that may arise and provide advice to the board in accordance with the laws, rules and regulations
- ensure that the board receives continuous training on regulatory developments that are relevant to their business developments and needs, and
- provide compliance advice to the board and senior management in the decision-making process.
Directors and senior managers of listed companies know the strategic contributions of the company secretaries in governance and their work to facilitate communications between the board and management, the issuer and its shareholders, and the issuer and regulators.
The professional background and training of members of the profession has been diversifying in recent years. Currently about 18% of members and graduates are also qualified lawyers and accountants, and a range of different players, including directors, risk managers, compliance officers, legal counsels and managers, are increasingly drawn to the CS/CGP qualification.
Another visible trend is the increasing importance of technology including board portals and data management software, have become permanent features of the practitioners' toolkits. This development has increased the efficiency of company secretarial departments and enabled senior members of the profession to focus more on the advisory and strategic sides of their roles as good judgement cannot be delegated to an algorithm.