Report of Focus Group Meetings and Forums regarding HKICS-ICSA Relationship June-July 2011

Transcription

1 Report of Focus Group Meetings and Forums regarding HKICS-ICSA Relationship June-July 2011 Executive Summary In order to ascertain members intentions and views with regard to a possible de-delegation by ICSA and its implications, the Hong Kong Institute of Chartered Secretary (HKICS) conducted a series of engagement meetings, including two rounds of focus group discussions and two open forums for its members in June and July Fellows and Associates participated in the focus group discussions, whereas participants of the open forums were recruited through mass invitation to all members. The discussions focused on a few important areas, namely possible impact on memberships, representations and nature of ICSA, and procedural matters related to de-delegation. Memberships The majority of participants of the focus groups were of the view that both the HKICS and ICSA memberships were important to them. It was noticeable that these participants had strong aspirations for international recognition of their professional qualifications, irrespective of whether they had immediate needs for advancing their careers through international qualifications. On the other hand, a significant minority of focus group participants believed that the HKICS qualification was of priority if they were to choose between HKICS and ICSA memberships. HKICPA and ACCA were cited to illustrate the importance of HKICS membership. These participants considered the recognition by local stock exchange regulations and the Companies Ordinance very important and attractive. Participants of the focus group discussions were mostly inclined to keep the memberships of both HKICS and ICSA if possible, so that they may enjoy both the international status of ICSA and the local recognition of HKICS. Some members remarked that younger members might want an international membership as they would aspire to career opportunities overseas in the future; while those in an advanced 1

2 career stage might place more importance on the local qualifications and recognition. Members were reminded that, in the event of de-delegation, they would be required to pay membership fees to HKICS and ICSA respectively in order to keep two memberships. Those who expressed their views on this issue said they would keep HKICS membership only in such a scenario, instead of paying two separate fees. Recognition of Qualification Recognition of HKICS qualification is the potential issue that caused most concerns, with some members being not sure if the HKICS qualification would continue to be recognized if HKICS were to be de-delegated and enter into a new arrangement with the ICSA. The potential threat of ICSA establishing a parallel or rival organization in Hong Kong in the event of a de-delegation was discussed. Members were assured that at the moment only HKICS receives statutory recognition by local regulators in Hong Kong and not ICSA (UK), and that HKICS is an independent legal entity, governed by its own Memorandum and Article of Association. Members expressed interests in knowing more about HKICS s efforts in concluding Mutual Recognition Agreements (MRA) with other Divisions. The meetings were informed that other Divisions have expressed interest in establishing MRA with HKICS. More negotiations on standards and examinations will continue and HKICS will continue to explore cooperation opportunities. On the other hand, through the Corporate Secretaries International Association (CSIA), a global trade body promoting good governance, HKICS is working on the standards for international qualification. Relationship with ICSA Participants at the Members Forum heard from the Council that it is not HKICS s intention to seek changes to the existing relationship with ICSA. In other words, the Council s position is that it would like to maintain the status quo, if possible. Notwithstanding, HKICS has been preparing for the scenario of receiving a de-delegation notice from ICSA. Under such circumstances, the Council would first consult members by conducting a general meeting and invite members to resolve on the question of whether HKICS should comply with the de-delegation notice. The Council has been liaising with other Divisions with a view to maintaining international recognition of HKICS qualification by establishing MRA and joining CSIA. CSIA has 14 members organizations including national/territorial representative organizations from India, Sri Lanka, USA (outside ICSA), etc. Efforts to establish MRA with CSIA members will continue, regardless of HKICS relationship with ICSA. 2

3 Representation at ICSA Members heard that HKICS will stand by its belief that there should be fair representation on the international Council of ICSA, in line with HKICS s core values on good governance. Many agree that ICSA should be an international body founded and based in the UK, rather than a UK body with overseas members; and as such the representation of Divisions should duly reflect the proper nature of ICSA. Members discussed specific issues regarding voting rights, membership trends and the financial situation at ICSA. Some were surprised to learn of the current representation of UKRIAT, Australia and HKICS at the ICSA International Council. It was commonly viewed among participants of the focus groups and forums as an outdated and unfair arrangement that should be reformed. Quite a few members considered ICSA (UK) s controlling stake over other divisions unreasonable and inappropriate, and are concerned that control in the UK may jeopardize or slow down the development of fast growing Divisions such as HK/China. The meetings heard from the HKICS Council that it is determined to protect the rights of members. HKICS will remain steadfast in its pursuit of fair representation and good governance. The Council reiterated the need to right the wrong in a body that promotes good corporate governance. Relationship with the Mainland Members taking part in the discussions were in agreement on the strong potential for the development of the potential in Mainland China, and HKICS s significant role in promoting the profession on the Mainland. At the forums, Members heard that HKICS has been strengthening relationships with regulators and provincial officials in Mainland China under the brand of HKICS, and that de-delegation would not affect HKICS s development in the Mainland. HKICS currently has 100 affiliated persons in the Mainland, through which HKICS qualification is being promoted. Going Forward The Council will continue to keep members updated and informed of related developments and shall conduct further consultations with member as necessary. (END) 3

4 Detailed Report: Members views collected in engagement meetings In the following section, views collected through the engagement meetings (focus groups, forums) were sorted, collated and presented according to the topic of discussion concerned. The highlighted points represent general views presented by participants at the meetings as observed from discussion gist collated after each meeting. Some excerpts of views from discussion gist of each meeting are included for readers reference. The word members in the text should be interpreted as members who attended HKICS engagement meetings. 1. HKICS and ICSA memberships Importance of HKICS and ICSA membership Most members consulted considered both to be equally important, with some highlighting importance of HKICS membership over ICSA membership. Reasons for their assessment of membership value included: the stage of career one is in, whether one works in a private company or listed company and the apparent shifting emphasis by employers and the market from international to locally recognized qualification. Members appreciate the international status of ICSA membership; however, members in engagement meetings mostly indicated that local recognition of HKICS membership by the local regulatory bodies such as the Hong Kong Stock Exchange and Company Ordinance would be important considerations in deciding which membership to retain. Some members regarded Hong Kong and Mainland China to be the primary locations to pursue their future career in corporate secretaryship more than other markets. 2. Representation and Nature of ICSA Membership trends and representation of HKICS in ICSA International Council Members were shown the membership distribution and trend of worldwide ICSA membership growth. Members are largely unaware of the distribution of worldwide ICSA membership and the declining membership in UKRIAT. Most members were not clearly aware of the representation set-up within ICSA International Council. Members were shown the current set-up of members representation of UKRIAT, Australia and HKICS at the ICSA International Council. Most members were unaware of the current arrangement until recently, and agreed it should be stopped / changed from the current set-up. 4

5 Members in general considered ICSA (UK) s controlling stake over other divisions unreasonable and inappropriate. With ICSA being an institute that promotes good corporate governance, some members commented such arrangement as bad for image and reputation. Members expressed their hope for a fair approach to representation, which can be instituted through a series of reforms to implement proportional representation for all divisions. Financial situation of ICSA Understanding that operation of the Institute, such as admission, assets, exams, and finance are all based in Hong Kong under close scrutiny of the Council, members generally considered it important to ensure fees paid by HKICS members are used to enhance HKICS members benefit or services, and expressed concern over shouldering the deficit as a result of ICSA s poor financial management. Nature of ICSA At the meetings, two views on the nature of ICSA were shown to members: 1. The view of some members from the UK Committee: that ICSA is a UK body that has overseas members; 2. The view of divisional representatives on the International Council: that ICSA is an international body founded and based in the UK. Members generally do not agree with the view of UK Committee, considering it to be the opposite of the direction of internationalization adopted by many other chartered/professional bodies. Members generally agreed ICSA should be an international organisation. 5

6 2. Possible change of relationship between HKICS and ICSA (De-delegation) HKICS s response in the event of de-delegation Overall speaking, members at the meeting did not form a clear consensus as to whether HKICS should de-delegate from ICSA. Members were briefed about ICSA UK management s proposal to completely restructure the Institute by de-delegating the Divisions, centralizing and controlling operation to the UK. Members opposed the proposal, doubted the ability / competence and local understanding of the UK charter, saying flexibility and development of local division would be much limited by their lack of grasp of the situation (due to physical distance). Some members said it would be impractical for UK to exert control over HKICS. Members were of the view that unless the proposal is watered down to reflect reasonable value for money (control), HKICS should not accept it. Some members enquired about the Council s action plan in the event of receiving de-delegation notice from ICSA. Members were reassured that they will be consulted again and that there will be enough time for such exercise in case the relationship with ICSA fails. Members heard that the Council would first consult members by conducting a general meeting to let members decide whether HKICS should comply with the de-delegation notice. ICSA will have to call an emergency meeting to pass a resolution (28 days notice required), and another 28 days will be given to HKICS to take the required action. HKICS has been preparing a survey of members. A member expressed appreciation for the preparation the Council had taken and fully supported the Council. Impact of de-delegation on HKICS members - Recognition of qualification (Hong Kong and International) Local recognition is the most concerned area members were unsure if HKICS qualification would be recognized as it currently is if HKICS is de-delegated and enters new arrangement with the ICSA. Some members enquired the relationship of ICSA with the regulators in Hong Kong and China compared to that with HKICS. Members were reassured that current local statutory recognition of HKICS qualification will remain unchanged. Some members are concerned about international recognition if HKICS is de-delegated and then enters into a new arrangement with the ICSA. The meetings heard that the Council has been liaising with other Divisions to maintain international recognition of HKICS qualifications by establishing Mutual Recognition Agreement (MRA) and joining the Corporate Secretaries International Association 6

7 (CSIA) - a global trade body to promote good governance which has an even more global reach than ICSA. CSIA has 14 countries as members, including India, Sri Lanka, USA (outside ICSA). Efforts to establish MRA with CSIA members will continue regardless of our relationship with ICSA, to safeguard members international recognition in case relationship with ICSA fails. Impact of de-delegation on HKICS members Other concerns Most members expressed concerns over the change in terms of operation and services of HKICS locally. Members heard from the Council and Chief Executive that regardless of the change of status with ICSA, HKICS will continue to operate independently and normally from Hong Kong and there will be minimal impact to services offered to members such as examination and accreditation, with the exception of applying for ICSA membership. A number of members expressed concerns about the possibility of ICSA (UK) establishing an organization parallel to HKICS in terms of function and position. But some other members doubted the ability / competence and local understanding of the UK charter, and believed it would be less inclined to accommodate needs in each local market. Members were concerned that usage of the name and title of HKICS and the official title of qualification Chartered Secretary will see necessary changes in the event of de-delegation. Majority of the members at the meetings were confident in the capability and experience of HKICS in handling local affairs (in terms of financial soundness and management talent). 3. HKICS s relationship with the Mainland and future development HKICS s relationship with the Mainland Members showed a lot of interests in the Institute s development in the Mainland, and agreed with the Council s direction to push forward further collaboration with Mainland regulators to enhance the image of corporate secretaries as the vanguard of corporate governance in China. Members heard and generally supported HKICS s initiatives work with CSIA to lobby for the inclusion of Compliance, Corporate Secretary Service into the Services Sectoral Classification List of World Trade Organisation (WTO). As professional service that can be set up with mutual recognition of professional qualification under Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) is partly based on the Services Sectoral Classification List of WTO, thus inclusion to the WTO framework would facilitate the recognition and status of corporate secretary profession by allowing members to enjoy recognition 7

8 under CEPA. The institute will continue to work towards this direction to enhance the status of the profession in the Mainland. Members learned that HKICS has signed a memorandum of understanding (MOU) with the Shanghai Stock Exchange (SSE) in January 2011, under which SSE and HKICS will enhance collaborations in research and development, growing the board secretary profession, and training. Members were reassured of the Council s effort to expand the Institute s status and existing strong relationship with local and Mainland regulators which the Institute has built over the years. Future development of HKICS Some members enquired about the role of HKICS in government consultation and policy advocacy. Members heard that the government approached HKICS on all legal changes related to corporate governance practitioners. Members at the engagement meetings recognized the Institute s enhanced status in issues related to the industry. 8