Following is the speech by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, at the Opening Ceremony of the Hong Kong Junior Chamber's 38th National Convention today (September 26):
Alice, ladies and gentlemen,
It is my pleasure to be among so many young and aspiring leaders today, to participate in the Opening Ceremony of the Hong Kong Junior Chamber's 38th National Convention. To all delegates who have come from abroad, a warm welcome to Hong Kong, Asia's world city.
Over the past 53 years, members of the Hong Kong Junior Chamber have dedicated tremendous efforts to furthering the leadership skills of young people in our community. The impressive list of leadership training and community development programmes you have organized speaks for itself. They have provided a valuable opportunity for our young people to enhance their abilities and prepare themselves to face the challenges of these highly competitive times.
I am delighted that you have chosen 'Enhancing Corporate Governance, Reinforcing Business Ethics' as the theme of this year's National Convention. Adhering to international corporate governance standards is fundamental to our mission of maintaining Hong Kong's position as an international financial centre. Corporate governance is therefore a subject close to my heart and high on my policy agenda. At the beginning of this year, I drew up a Corporate Governance Action Plan together with the SFC and the HKEx. The Action Plan identifies priority areas, assigns ownership and sets a timeframe for implementation of the initiatives. Let me take this opportunity to update you on the progress of this action plan.
Firstly, on the legislative front, we successfully rolled out the Securities and Futures Ordinance in April 2003. Its commencement brings about a fair, efficient and transparent regulatory regime governing our securities and futures markets that inspires confidence, facilitates market innovation and development. We also introduced the Companies (Amendment) Bill 2003 into the Legislative Council in June 2003. The Bill contains important proposals to enhance shareholders' powers and the powers of the court to award damages in case of unfair prejudices.
Secondly, the Standing Committee on Company Law Reform is consulting the public on a series of recommendations the Committee has put forward in Phase II of its Corporate Governance Review. These recommendations involve the duties of directors, the rights of shareholders, and corporate reporting.
Thirdly, we have just issued a consultation paper on proposals to enhance the oversight of public interest activities of the accounting profession and to establish a Financial Reporting Review Panel. I look forward very much to receiving your comments on our proposals to strengthen the oversight of the accounting profession and financial statements of companies.
Fourthly, we will introduce a series of measures to enhance our listing regime. HKEx has completed the streamlining of the listing process in order to improve quality control at the point of entry by focusing on critical matters. HKEx is also in the course of amending the Listing Rules to improve the initial and continuing listing requirements and delisting procedures. In addition, we will shortly seek public views on providing statutory backing to our listing rules and improving the regulatory framework.
I also attach great importance to the quality of directors. Directors perform the important dual role of setting the company's strategy and preventing corporate abuse. This is why the quality of directors has a direct impact on the quality of corporate governance. At present, the Hong Kong Institute of Directors organises training programmes for directors. I have encouraged the Institute to institutionalise their programmes and place more emphasis on the professional knowledge required for a director. We are considering ways to encourage directors to undertake training. One of the options is to require listed companies to disclose in their annual reports their arrangements for directors' training. I believe many of you are already directors of companies, or will become a director in the near future. May I appeal to you to join the training programmes so that you will be better equipped for this important job.
Corporate Governance in fact falls under the wider subject of business ethics. I do not intend to go into the details of the huge subject of business ethics today. But putting it simply, business ethics is doing business in a responsible way - responsible to the company, responsible to the shareholders, and of equal if not more importance, responsible to society. This element of social responsibility should not be undervalued. Apart from maximising profits in the interest of the company and its shareholders, do not forget the role companies can and should play in improving the quality of our society.
Ladies and gentlemen, I cannot emphasize more that fostering good business ethics and corporate governance should not and cannot be the work of Government alone. Regulators, issuers, directors, professionals, and investors all have a vital part to play. Systems and legislation are no more important than the people who put them into implementation. In your capacity as company directors, executives, professionals and investors, all of you can, in different ways, contribute to enhancing Hong Kong's corporate governance standards. I have placed corporate governance high on my policy agenda, and I urge you, as young leaders of our community, to do the same. I can assure you that your support would make a difference. It is time for action.
End/Friday, September 26, 2003