HKIoD Celebrates 2024 Director Excellence with Focus on Innovation and Corporate Governance

Speech by Permanent Secretary for Financial Services and the Treasury (Financial Services) at Hong Kong Institute of Directors Annual Dinner cum Award Ceremony for Director Excellence 2024

Following is the speech by the Permanent Secretary for Financial Services and the Treasury (Financial Services), Ms Salina Yan, at the Hong Kong Institute of Directors Annual Dinner cum Award Ceremonyfor Director Excellence 2024 today (November 28):

Dr Christopher To (Chairman of the Hong Kong Institute of Directors), 徐衛剛部長(Director-General of the Economic Affairs Department of the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region, Mr Xu Weigang), Dr Kelvin Wong (Chairman of the Securities and Futures Commission), Dr Moses Cheng (Founder Chairman of the Hong Kong Institute of Directors), distinguished guests, ladies and gentlemen,

Good evening. It is my great pleasure to join you all today to celebrate the anniversary of the Hong Kong Institute of Directors (HKIoD) and to congratulate the winners of this year's Awards for Director Excellence.

For 27 years, the HKIoD has played an important role in anchoring Hong Kong's position as a leading international financial centre through its unwavering commitment to promoting excellence in corporate governance and director professionalism. The Institute has made significant strides in fostering a culture of robust governance which is indispensable for earning the trust of clients, investors, business partners and stakeholders in growing a business or an entity and making it strong and prosperous over time. As the Institute's Statement of Definition for Corporate Governance points out, the board of directors of a company is ultimately responsible for corporate governance and making strategic decisions that determine the company's prosperity and integrity. I would add that a company's prosperity and integrity can contribute to the overall economic and social development of a community as well. The core values of a company and those of the society can find alignment through good corporate governance.

The Directors of the Year Awards, launched in 2001, give due recognition of exemplary boards and directors who set benchmarks for good governance practices. The theme of this year's Awards, "Leading with Agility in an Era of Innovation," resonates deeply the world's fast-paced development and the HKSAR (Hong Kong Special Administrative Region) Government's policy emphasis on innovation and technology. Rapid technological advancements not only demand, but can help provide, new and modern approaches for delivering corporate governance.

In this connection, apart from issuing policy statements on the new technological frontier of virtual assets enabled by blockchain ledger and exponential opportunities enabled by artificial intelligence, the Financial Services and the Treasury Bureau has also made considerable progress in modernising our company law, the vehicle that provides the legal basis for the operation of our companies.

Last year, with the endorsement of the Legislative Council, we amended the Companies Ordinance to enable companies to hold virtual or hybrid general meetings, in addition to meetings in physical locations. This change is essential for businesses to hold meetings despite unexpected circumstances such as the pandemic, thus ensuring that corporate affairs can still be handled in challenging times.

To better leverage the opportunities and convenience offered by the digital economy, we will soon introduce another set of legislative proposals to amend the Companies Ordinance so that Hong Kong companies can adopt an implied consent mechanism for disseminating corporate communications via websites. This change will alleviate companies' administrative burden, streamline the communication process and enhance operational efficiency. The same bill will also make possible a treasury regime that allows listed companies greater flexibility in managing their capital through share buy-backs, holding bought-back shares in treasury without cancelling the shares, while safeguarding shareholder interests through prior approvals and repurchase moratoriums.

Ultimately, we are moving to an uncertificated or paperless securities market regime. We have already provided for the overall framework in the law and will introduce the detailed rules on the operation next year. When this is done, the whole process from IPO to any subsequent change of share ownership can be done digitally.

Apart from being a conduit, innovation and technology (I&T) is also a catalyst for change in our capital markets. Together with the Hong Kong Exchanges and Clearing Limited (HKEX) and the Securities and Futures Commission, we have taken steps to ensure that our listing platform is adequately modernised to cater for the funding needs of I&T companies. Hence, apart for pre-profit bio-tech companies, HKEX has updated the listing rules to welcome in specialist tech companies, and under the revamped GEM board, companies not reaching the pre-requisite cash flow but with substantial research component can also be admitted. The result has been very encouraging. Since the listing reforms in 2018, more than 300 companies listed in the Stock Exchange belong to the new economy.

Technological advancements have certainly enhanced our ability to cope with working under severe weather conditions. Remote working arrangements, online banking and securities services are crucial in facilitating trading and clearing. To improve the efficiency of our listing platform, maintain mutual market access channels with other securities markets, including markets in the Mainland, and enhance our competitiveness, we have taken a big step forward in maintaining normal trading operation under severe local weather conditions since September 23. To make this happen, the stock exchange, market participants, banks and other associated service providers have worked hard to create a practical work plan that allows trading, clearing, investing and fund transfers to continue under inclement weather conditions.

I am happy to say that our market operated smoothly on the first trading day under the severe weather test when typhoon no. 8 signal was hoisted two weeks ago. This is a good demonstration of our commitment to enhancing our market infrastructure and raising our competiveness leveraging technology and innovation.

Talking about severe or unusual weather, I note that a new Climate Governance Award is added this year to recognise outstanding achievements by directors and boards in advancing climate governance. This follows HKIoD's move in hosting the Climate Governance Initiative Hong Kong Chapter, which is part of the global initiative to mobilise and equip directors in taking climate change related decisions and organising various capacity building programmes and forums on climate change for directors.

In strong like-mindedness with HKIoD, the Government has placed climate change and sustainability at the heart of our green finance policy formulation.

Since 2020, HKEX has laid down requirements in the ESG (environmental, social and governance) Reporting Guide for listed companies to disclose their boards' oversight and governance of ESG issues, ESG management approach and strategy, and how the boards review progress against ESG-related goals.

In April this year, HKEX introduced enhanced climate-related disclosure requirements developed based on IFRS (International Financial Reporting Standards) S2 Climate-related Disclosures, which will take effect in phases starting January next year, serving as the first step to prepare listed companies towards eventual sustainability reporting in accordance with the Hong Kong Sustainability Reporting Standards.

As an international financial centre, we are taking a big step forward toward aligning local practices with global requirements. In March, the Government issued a statement outlining our vision and approach to develop a comprehensive ecosystem for sustainability disclosure, aligning with the International Financial Reporting Standards - Sustainability Disclosure Standards or ISSB Standards. As foreshadowed in the Chief Executive's 2024 Policy Address, we will soon publish a roadmap on the concrete steps to take to fully adopt ISSB Standards in Hong Kong, leading Hong Kong to be among the first jurisdictions to align its local requirements with ISSB Standards.

Ladies and gentlemen, Vice Premier He Lifeng (Vice Premier of the State Council), in his speech delivered at the Global Financial Leaders' Investment Summit held in Hong Kong last week, offered three valuable suggestions on enhancing Hong Kong's financial development and consolidating our position as an international financial and business centre. These are, to recap, deepening reforms and continuing to innovate to enhance our competitiveness; expanding the network of co-operation and continuing our path of opening up and engagement with international markets; and leveraging our plans with national development strategies in strengthening Hong Kong's gateway and hub positions.

These policy insights are most relevant for us in navigating a changing world. Under "One Country, Two Systems", Hong Kong attaches the highest level of importance in maintaining the integrity and robustness of our financial systems. We walk our talks. HKIoD has been a strong thought leader and practical training provider of corporate governance for the public and private sectors as well as not-for-profit organisations. We look forward to our continued partnership with the HKIoD in strengthening the different pillars of corporate governance to further strengthen Hong Kong's role as an international financial and commercial centre.

As the festive season and new year are around the corner, Iwish you all happiness, good health, and success in the year ahead. Thank you.

Speech by Permanent Secretary for Financial Services and the Treasury (Financial Services) at Hong Kong Institute of Directors Annual Dinner cum Award Ceremony for Director Excellence 2024 Source: HKSAR Government Press Releases

Speech by Permanent Secretary for Financial Services and the Treasury (Financial Services) at Hong Kong Institute of Directors Annual Dinner cum Award Ceremony for Director Excellence 2024 Source: HKSAR Government Press Releases

ACAN welcomes law enforcement agencies' crackdown on "space oil"-related crimes

The following is issued on behalf of the Action Committee Against Narcotics:

With regard to public concerns over youngsters abusing an emerging drug called "space oil", the Chairman of the Action Committee Against Narcotics (ACAN), Dr Donald Li, said today (November 28) that the ACAN supports the Government's proposal of amending the Dangerous Drugs Ordinance for stepping up the control of etomidate at the earliest opportunity. Etomidate is the main active ingredient of "space oil". The ACAN also welcomes crackdown by the law enforcement agencies (LEAs) on "space oil"-related crimes.

Dr Li said, "I noticed that in recent months, the LEAs have been taking a series of actions targeting 'space oil'. During these actions, the LEAs successfully seized a considerable amount of 'space oil' as well as etomidate, and made multiple arrests. These results not only reflect the LEAs' determination and ability to combat 'space oil'-related crimes but also send a clear message to offenders, especially drug traffickers, that any individuals committing 'space oil'-related crimes will never be able to escape from legal sanctions.

"I appreciate the efforts of the LEAs in combating 'space oil'-related crimes. For the sake of protecting the public from the harms of this emerging drug, the ACAN supports continuing efforts by the LEAs to bring offenders committing 'space oil'-related crimes to justice."

A spokesman for the Security Bureau said, "Legislation and Law Enforcement forms an important part of the Government's multipronged anti-drug strategy. The Government will strive to continue combating 'space oil' at source with a view to cutting off its supply."

The spokesman continued that the LEAs have stepped up various inspections including cyber patrols and have carried out intelligence-based law enforcement actions targetting "space oil". For example, the Customs and Excise Department launched a series of anti-"space oil" operations in November and uncovered nine cases of possession of etomidate. A total of 191 alleged "space oil" infused capsules, and 16 kilograms of alleged etomidate powder that can be used to produce about 48 000 "space oil" infused capsules, were seized. In addition, the Police uncovered 88 "space oil"-related cases and made 132 arrests in the first 10 months of this year.

The spokesman reminded members of the public not to take chances and illegally bring "space oil" into and out of Hong Kong, as well as illegally bring e-liquid into Hong Kong. Offenders are liable to imprisonment upon conviction.

In October this year, the Chief Executive stated in the Supplement to his Policy Address that measures will be proposed to step up the control of etomidate in view of its abuses. In this regard, the Government has already proposed bringing etomidate under tighter control through legislation. Dr Li said, "I fully concur with the Government's proposal to control etomidate under the Dangerous Drugs Ordinance; this will deter people from abusing 'space oil', and more severe punishment can be imposed on drug traffickers. The ACAN supports the Government to complete the relevant legislative procedures at the earliest opportunity."

Preventive education and publicity is important in reducing the demand for drugs. The Chairman of the Sub‑committee on Preventive Education and Publicity of the ACAN, Mr Chan Wing-kin, said the ACAN will continue to work with the Government and stakeholders in the anti-drug sector to dispel the misconceptions about "space oil" with a view to preventing the public, especially youngsters, from falling into the trap of this emerging drug unwittingly. He added that the abovementioned work will include briefing teaching staff of schools on techniques for identifying those who abuse "space oil" or other drugs, as well as how to improve the capabilities of frontline workers for handling "space oil" cases.

Mr Chan said, "As a former school principal, I would like to call on colleagues in the education sector to be more vigilant against the vaping of alternative smoking products among students, as this behaviour could be a sign of drug abuse.

"Support and encouragement from family members, teachers and friends have always been the buttress of young people in times when they are fighting against drug temptation. I urge that we should show care to those around us and maintain good communication with them. If we find that people around us are facing difficulties or even suffering from drug abuse, we should lend them a helping hand and encourage them to seek professional help. I also hope that schools can step up their efforts in promoting a healthy lifestyle and fostering a drug-free culture among students."

Those who need assistance from professional social workers or would like to receive more information about "space oil" can message 98 186 186 on instant messaging applications WhatsApp and WeChat, or call the 24-hour hotline 186 186. "Space oil" abusers may also seek assistance from organisations providing drug treatment and rehabilitation services. Their contact details have been uploaded onto this Narcotics Division (ND)'s webpage (www.nd.gov.hk/en/list_of_major_organisations_providing_drug_treatment_and_rehabilitation_services.html).

In addition, members of the public are welcome to visit the ND's dedicated webpage (www.nd.gov.hk/en/space_oil.html) about "space oil", which contains a "space oil"-themed animated video and other relevant information.