In 2016, PwC Hong Kong (PwC) conducted a comprehensive study, Cracking the Corporate Governance Code – How ready are Hong Kong listed companies in meeting new requirements? to assess the readiness of listed companies in responding to the new requirements of the revised CG Code in the areas of risk management and internal control.
In 2017, we have carried out a second wave of the Study. This analysis followed a similar approach to that adopted in our 2016 analysis – we have included companies from the broader Hang Seng Index, the Hang Seng China Enterprises Index, as well as across four industries (i.e. financial services, real estate, retail and technology).
This new Study had two main goals. First, to provide directors, executives and managers with a thorough analysis on how well listed companies are responding to the new requirements of the revised CG Code, and to give insights into the prevalence level of adopting risk management and internal control practices in the market. Second, the Study was designed to help companies look for further opportunities to review their corporate governance structure; enhance management accountability; strengthen RM and IC systems; transform the internal audit function and assess its effectiveness; and improve business performance and efficiency. With our substantial experience in helping companies navigate new requirements of the Listing Rules including the CG Code, we have seen successful examples of how companies have used this exercise to help themselves better manage different stakeholders’ expectations.
Embracing good corporate governance is a continuous process and it can improve investor relations; protect shareholders’ interests; and increase a company’s competitiveness. Eventually, it is a performance matter instead of a compliance issue.
Risk Assurance China and Hong Kong Markets & Growth Leader, PwC China
Tel: + (20) 3819 2997
China Mainland and HK Governance and Internal Audit Service Leader, PwC China
Tel: + (21) 2323 3405