Corporate and Government Transparency: Hong Kong (China)'s Experience

In January, Hong Kong (China) extended disclosure requirements for corporate executives. “Braving the financial storm with good governance” is the proud title of the January issue of Hong Kong (China)’s Independent Commission against Corruption Newsletter. In addition to remuneration disclosure, new rules made it mandatory for directors of listed companies to disclose all their current and past (during the past three years) directorships. Stricter disciplinary and possibly criminal sanctions for providing false information were introduced.

Hong Kong (China) also does well on disclosure by politicians - extensive financial and business interests’ declarations by its legislators are available online.

Hong Kong (China) owes its successful transformation from highly corrupt in the 70s to today being one of the most corruption-free societies to the activities of its anti-corruption watchdog. The Independent Commission against Corruption (ICAC) is mandated to deal with both public and private sector corruption. On the one hand, ICAC is empowered to conduct investigations up to searching and arresting suspects; on the other, it carries out a lot of advisory and guidance activities.

A robust system of checks and balances to ensure there will be no abuse is a major element in the success story of Hong Kong (China)’s ICAC. Crisis-stimulated empowerment of watchdog agencies should include building in stronger checks and balances. The checks and balances might include reporting to the executive, control by the legislature, prosecution separated from investigative powers, procedural guarantees by independent judiciary, media scrutiny and an open complaints channel.