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Chartered secretaries ensure proper corporate governance

Firmly established as one of the world’s leading financial centres, Hong Kong continues to see new IPOs, start-ups and large-scale corporate transactions, all of which adds to the demand for qualified chartered secretaries.

These are the professionals who ensure that every listed company — and others across the spectrum from SMEs to multinationals — is run in compliance with the relevant regulations and properly administered in terms of reporting requirements, audits, AGMs, risk management, corporate announcements and much else.

“We are also an adviser to the board,” says Edith Shih, executive director and company secretary for CK Hutchison Holdings. “We understand and ensure compliance with listing rules, stock exchange regulations, the Companies Ordinance and the SFC Ordinance, and we advise on good corporate governance. The value of a good company secretary is being able to deal with every situation, respecting and applying stringent requirements, and realising that you can’t afford to fail because there are consequences.”

To meet the increasing demand for such expertise, the Hong Kong Institute of Chartered Secretaries (HKICS) is understandably keen to see more graduates and young executives signing up to complete the necessary professional qualifications.

The institute offers two clearly defined routes, both of which provide extensive training and pave the way to fulfilling careers and senior-level roles within the broader business community.

The first route, chosen by many who are already in full-time jobs, involves registering with the HKICS and then working towards a series of public exams. Candidates follow an approved syllabus which covers eight main areas including law, taxation, corporate governance and corporate administration.

Each course requires a fair amount of individual learning and revision, or “self-study”, but the institute makes sure to provide guidelines, texts, online study packs, past papers and model answers, as well as regular seminars on key topics and workshops on exam technique.

Importantly, HKU Space also runs exam preparation courses. These cover all the required subjects and offer 30 hours of teaching.

When first registering, candidates should have an undergraduate degree, which can be in any subject. Many are already working either for a large organisation’s company secretarial department or for a professional services firm which provides relevant support and advice for its clients. This makes it possible to gain practical, on-the-job experience from the outset, but that is not viewed as a necessity.

In general, candidates take the exams in sequence and aim to complete all eight in anything up to six years. They can, though, take longer if they need to. And anyone who has previously qualified with a law firm or has an accountancy degree can apply for certain subject exemptions.

Shih notes that the exams are tough and the usual pass rate is not that high. That is because strict standards must be set and maintained if Hong Kong is to retain its standing as a well regulated financial centre and maintain the confidence of local and international investors.

After passing the exams and getting three to six years of recognised work experience, individuals can then apply for membership of the HKICS.

The alternative route is to take a two-year part-time master’s course in corporate governance instead of the public exams. Such postgraduate programmes are now offered by four universities in Hong Kong, with the syllabus approved and accredited by the HKICS.

This option costs more overall, but it also brings a master’s degree and many individuals like the fact that it provides more classroom teaching, tutoring and potential networking opportunities.

Both routes currently lead candidates to the qualification of chartered secretary, or CS. From next year, however, there will be a dual qualification, combining CS and CGP (corporate governance professional).

“We’re getting the institute ready to present the new course,” says Shih, who is also international president of the ICSA (Institute of Chartered Secretaries and Administrators) and a past president of the HKICS. “It will become a dual qualification in future and we also plan to bundle the two with an international designation.”

At present, she notes, the Hong Kong CS qualification entitles holders to practise in other countries including Britain, Singapore, Malaysia, Australia and Canada. This offers plenty of scope for overseas exposure.

However, the main priority right now is to meet the growing need for suitably qualified professionals in Hong Kong, where even with the institute’s 6,000-strong membership, there is still an estimated shortfall of some 20 to 30 per cent.

Johnson Kong, managing director and international liaison partner at professional services firm BDO Hong Kong, is quick to point out there are already close to 2,000 listed companies on the local bourse, and each one needs a chartered secretary. Add to that continuing demand from firms like his — and the push from regulators to step up their compliance efforts — and it is easy to see that the volume of work and related career opportunities will only multiply.

“The CS is a very versatile qualification, with the training and the academic education it gives,” Kong says. “It opens up a lot of avenues that lead to senior management level and provide portable skills for the financial sector.”

He notes that the firm’s graduate recruits usually start by doing compliance issues and looking after advice on change of directors or shareholdings. They would then progress to handling things like company formations, board minutes, disclosures, and enhancing clients’ risk management, setting up trusts, and perhaps doing some liquidation work.

The firm provides very good on-the-job training, with practical experience and CPD (continuing professional development) courses covering new regulations and recent case studies, he adds.

“As an employer, we offer study leave for staff taking the public exams,” says Teresa Lau, head of corporate secretarial at BDO Hong Kong, whose department currently has close to 30 staff. “And if anyone studying for the CS has questions, they can always go to a senior manager and ask for advice or opinions. We take about 10 new recruits every year and offer summer internships too.”