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Following is a speech by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, at the presentation ceremony of Hong Kong Institute of Certified Public Accountants Best Corporate Governance Disclosure Awards today (November 29):
Edward (Chow), distinguished guests, ladies and gentlemen,
Thank you very much for inviting me here this afternoon to join this important event, which honours companies and organisations for quality corporate governance disclosures in annual reports. Let me first congratulate those who find themselves on the awardees' podium today, and pay tribute to the Hong Kong Institute of Certified Public Accountants for the efforts of putting these together in promoting the corporate governance culture.
The prestigious Best Corporate Governance Disclosure Awards are now in their 6th year, and have become one of the annual highlights in our corporate governance agenda. Annual reports we showcase today not only vividly offer more extensive disclosures and improved presentation, but also demonstrate that good corporate governance practices have been implemented in organisational structures and daily business. I am very pleased that the new group of awardees, ranging from listed companies on the Main and GEM boards to other public-sector and not-for-profit organisations, have established benchmarks for their counterparts to follow, and inspire greater confidence in our market transparency.
Best disclosures are not simply getting the numbers right. Of course financial statements must be true and fair reflection of business performance, but today's awardees are very much applauded for their having a communicative mindset in preparing annual reports. If the quality of annual reports is measured only by ticking the compliance boxes, it follows that such reports will wind up with a minimalist approach that conforms only to what is required by laws and rules, and rarely more. We should not stop here. Moving a step further from a mere compliance mindset will help you communicate with investors, stakeholders and other members of the public better. For listed companies in particular, with the investing public in a better position to appraise the company performance and corporate governance policies, quality and timely disclosures enhance the capability of capital formation through listings and, consequently, the shareholders' value. In short, adopting this communicative mindset makes good business sense.
Market sentiment, locally and also internationally, is sensitive to corporate disclosures. We must put ourselves in the forefront in meeting the best international corporate governance disclosure practices, never falling behind what London and New York have achieved. We have taken pride in Hong Kong's Q-mark as an international financial centre and a premier capital formation centre for the Mainland, and, referring to the "Q-mark", it is good corporate governance on our part that assures the market and sets us apart. As we are approaching the end of 2005, we have some good stories to tell regarding the many milestones that have been reached through the concerted efforts of the Government, regulators and professional bodies. First, with the Institute's contribution, the Hong Kong Financial Reporting Standards eventually are in full convergence with the International Financial Reporting Standards since January 1, 2005. Joining this simultaneously in January were the Exchanges' implementation of a new Code on Corporate Governance Practices and the latest Listing Rules amendments which, as you are aware, reflect the best current market practices and international standards. What's more, in June, I introduced the Financial Reporting Council Bill into the Legislative Council which is currently scrutinizing it. The Bill has the full support of the Institute, as the establishment of the new Financial Reporting Council will further upgrade the investigatory regime and assure the public confidence in the integrity of the accounting profession. As you are aware, these marked improvements have been well received by the market and recognised in a recent corporate governance survey. And looking ahead, the Government will, in this legislative session, introduce legislative amendments to give statutory backing to major listing requirements. We cannot afford to lag behind.
After all, the regulatory framework is only the hardware. While the Government, regulators and professional bodies like the Institute will provide the guidance, we need your continued support to turn it into a way of life, business life. I am glad that our strengthening of the overall regulatory infrastructure is complemented by your putting recommended corporate governance practices into actions in your esteemed companies and organisations. You did it successfully, and your unwavering commitment to corporate governance excellence at the real corporate level earns you the well-deserved recognition today.
In closing, ladies and gentlemen, I must thank distinguished members of the judging and review panels for taking on the challenging task of selecting awardees from among many deserving entrants. I also want to thank all the parties involved in making this year's Awards another resounding success, particularly Edward and his colleagues in the Hong Kong Institute of Certified Public Accountants. I cannot stress more that good corporate governance is the key to maintaining the excellent reputation of Hong Kong as a world-class financial market, and I know you and the Institute will always be there playing a part in helping to make this possible. Thank you very much.
Ends/Tuesday, November 29, 2005
Issued at HKT 14:49
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