1. Corporate Governance in Hong Kong
Hong Kong’s position as an international economic and financial center is attributed to its exemplary corporate governance. With Hong Kong’s various authorities and regulatory bodies emphasizing on transparency and accountability for listed companies, Hong Kong was ranked first for corporate governance among 11 Asian countries in 2007. (Refer to Appendix 1) The Stock Exchange of Hong Kong (SEHK) describes corporate governance as the “duties, functions and power of the board of directors as a whole and executives and non-executive directors individually”. These binding responsibilities include the fulfillment of their legal obligations towards the company and its shareholders, the proper conduct of their functions in relation to the company’s business assets, abiding by standards of best practice and ethics as well as accepting responsibility for their actions. 2.Alternative Labels
The common label applied by most Hong Kong companies is Corporate Governance. However, some companies prefer alternative descriptors such as Corporate Risk Management or Enterprise Governance. 3. Introduction of Corporate Governance in Hong Kong
3.1History of Corporate Governance
The history of corporate governance in Hong Kong dates back to the 1700s and the South Sea Bubble episode, where there were fundamental changes in business laws and practices in England. The need to access financial resources and seek economic and social progress has brought corporate governance into greater prominence. As a former British dependent territory, Hong Kong has its regulatory system based on English common law, but its business practices and corporate governance carry both Asian and UK influences. The family ownership structure that prevails in Hong Kong signifies the strong influence of dominant shareholders and a limited voice for minority shareholders. SEHK published its own Code of Best Practice in...