Hong Kong Corporate Governance Improves

by Mary Swire, Tax-News.com, Hong Kong

09 April 2002

Hong Kong brokerage CLSA has released its 6-monthly Corporate Governance Survey, rating 475 companies in 20 countries in Asia, Latin America and Eastern Europe. Hong Kong has improved, ranking second, behind Singapore. Taiwan ranked sixth and China was 16th.

Amar Gill, head of Hong Kong research at CLSA, said: "We have seen a trend of improvement in corporate governance in many companies, but there is still a long way to go."

The CLSA corporate governance report, released twice a year, studies 57 issues in seven categories - management discipline, transparency, independence, accountability, responsibility, fairness and social responsibility. Companies are marked from zero to 100%, with 100 being optimum corporate governance.

The 41 leading Hong Kong companies reviewed got an average score of 64.4%, compared with 52.9% a year ago. Sun Hung Kai Properties, Sino Land, Hutchison Whampoa and Pacific Century CyberWorks all recorded improvement.

"Hutchison has started providing detailed segmental information in its interim results which it did not do before, and its management has become more accessible," CLSA said. "The information flow from [CyberWorks] is also more consistent and management has become more accessible."

The survey show that many Asian governments took steps to enhance corporate governance last year, after the Asian crisis forced them to improve their markets in order to attract overseas investors to return. Companies with international exposure were usually those which adopted higher standards, said Mr Gill.

HSBC had the best score of the Hong Kong companies with 89.1%; at the bottom of the list were Wharf, Yue Yuen and the SCMP Group.

Recommended