How Investor Relations Contribute To Corporate Governance. Richard Tsang Chairman Strategic Public Relations Group

Transcription

1 How Investor Relations Contribute To Corporate Governance Richard Tsang Chairman Strategic Public Relations Group

2 Hong Kong - A Revered Global Financial Hub Long-standing vibrant business and international financial hub Respected legal system Upholds international standards and practices Huge capital market backed by institutional and retail investors Prolific professional expertise More than 1.3 million companies registered (Source: 2,187 listed companies as at 31 March, 2018 (Source: 2

3 Importance of Corporate Governance For a company to be successful, competitive and sustainable, it needs strong corporate governance Principal corporate governance guidelines in Hong Kong: 1. Companies Ordinance (CO) 2. Securities and Futures Ordinance (SFO) 3. Listing Rules of the Stock Exchange of Hong Kong (SEHK) 4. Corporate Governance Code (CGC) Listed companies are subject to more stringent regulations on transparency, accountability and trust than private companies ESG (Environment, Social, Governance) report, also called Sustainability Report, Corporate Responsibility Report or Corporate Social Responsibility (CSR) Report Covers four subject areas: Workplace Quality, Environmental Protection, Operating Practices and Community Involvement ESG reporting has become a code provision comply or explain based on guidance set out in Appendix 27 of the Main Board HKEx Listing Rules 3

4 Importance of Investor Relations in Enhancing Corporate Governance To highlight a company s emphasis on corporate governance requires professional input where Investor Relations (IR) expertise comes in IR education programmes are typically rolled out pre-ipo to help create a Culture of Transparency in a company Persuade management to communicate with new shareholders, potential investors and broker analysts and answer questions about the company s business and financials Help management understand certain disclosures are required by law and material non-public information must be disclosed in ways that comply with financial market regulations 4

5 Importance of Investor Relations in Enhancing Corporate Governance A public company must communicate clear, accurate, creditable and consistent information to the financial community to ensure all investors have full and fair access to all material information of the company for making reasonable investment decisions, thereby contribute to the company s share treading at fair value in the long run IR Communication Counts: Portfolio managers and Buy-side analysts give a company that affords good IR communication a 10% premium in valuation and a 25% discount to one which does not. In other words, IR can make a difference of up to 47% in a company s valuation (Source: TMX Equicom Study ( the Impact of Investor Relations June 2011)) 5

6 IR Practices Relevant to Corporate Governance Assist setting up and putting to use corporate governance system Stay abreast of corporate governance development and disclosure regulations, local and international Plan IR programmes, including CSR initiatives Develop IR disclosure documents, including annual reports/ presentation PPTs/ press releases/ newsletters, etc. Provide timely accurate financial information to investors and media Timely update corporate information disclosed financial and/or non-financial to ensure they are always accurate Ensure the company speaks with one voice align financial communication, investor relations and media relations strategies and messages Establish transparent relationship with investors, the media and the community Build long-term credibility of the company with the investment community, and more.. 6

7 THANK YOU!