Question

Ashley works within the risk team of Hong Kong Securities (Limited), a firm specializing on regulation based in a sector of your choice. Hong Kong Securities (Limited ) has an international clientele and, is aware of the many problems arising in the business and regulatory environment both in your jurisdiction and overseas, the executive board is looking to appoint additional board members, to assistance its ongoing activities.

Hong Kong Securities (Limited) has been requested to give the board a direction paper depicting the pertinent corporate governance necessities that apply to Hong Kong Securities (Limited) and featuring any present or looming activities identifying with corporate administration that may have an effect upon Hong Kong Securities (Limited) , either now as well as sooner rather than later. This paper will be utilized to aid basic leadership with respect to the new arrangements and will at that point be utilized as the premise of an information pack for the new representatives

With reference to the above scenario:

describe the important corporate administration necessities that apply to Hong Kong Securities (Limited, clarifying why these are pertinent to the firm and the people alluded to feature any present or looming activities identifying with corporate administration that may have an effect upon Hong Kong Securities (Limited), either now as well as sooner rather than later, clarifying their pertinence for the firm and the people alluded to. Give illustrative models inside your response to help your perspectives.

Answer 1

"CORPORATE GOVERNANCE NECESSITIES"

Corporate Governance intends to increase the accountability of the companies to avoid disasters like the one which occured through Enron, Worlcom and many more thereby creating a worse condition for the various stakeholders of the company. It basically focuses on protection of the stakeholders by implementing the elements of the corporate governance. The elements of the corporate governance includes Transparency, Accountability, Consensus oriented,Effectiveness and Efficiency, Participation. The implementation of these elements will help to abide by the corporate governance rules, regulations and principles and showcase a better picture of the company in the light of the stakeholders.

Apart from the above elements one of the vital pillar of the corporate governance is Leadership. This leadership quality is invoked only in a natural person, so the person selected on the board of Hong Kong Securities (Limited) as a board representative should possess this quality for better implementation of the corporate governance principles.

The board must be committed to high standard of corporate governance and should recognize that good governance is vital for the long term success and sustainability of Hong Kong Securities (Limited). For this purpose the company must comply with the following requirements:

• Compliance must be met with all the corporate code provisions and where appropriate the adoption of the recommended best practices set out in the Corporate Governance code should be followed.
• Regular evaluation of the Board performance is essential for the good corporate governance as well as for the board's effectiveness.
• With regards to risk management and internal control, the Board shall have the overall responsibility for evaluating and determining the nature and extent of the risks it is willing to take in achieving the strategic objectives, maintaining sound and effective risk management and internal control systems and reviewing their effectiveness to safeguard Shareholders’ investment and the assets of the company.
• All the details of the risk governance structure and the Risk Management Framework should be set out in the Risk Committee Report and the Board has reviewed the adequacy and effectiveness of the risk management and internal control systems, at least quarterly, through the Risk Committee and the Audit Committee.
• The board has a collective responsibility for disclosure and transparency which can even be delegated to a specific member of a board.

Hence, by the very feature of the word "Corporate Governance" which lies in itself is to be fair and transparent enough to the people or the investors of the company for whom they are working to enable its effective compliance.