Hong Kong corporate governance improves

The corporate governance procedures of companies listed on Hong Kong's main stock index have improved during the past year.

According to the Hong Kong Institute of Directors' (HKIoD) Corporate Governance Scorecard 2009, the accountability of executives has risen by 1.44 per cent in 2009.

The index is ranked on five areas of governance: rights of shareholders, equitable treatment of shareholders, role of stakeholders, disclosure and transparency and board responsibilities.

Specifically, the scorecard revealed that corporate governance was most effective in the finance industry, while the properties and construction sectors both performed badly.

Despite the slight rise recorded, Dr Kelvin Wong, chairman of HKIoD, explained that he had expected to discover more improvements in companies' risk management and transparency practices.

He said: "We hope listed companies in Hong Kong will work harder yet to raise their corporate governance standard and HKIoD is ready to assist them."

Earlier this year, the research firm GovernanceMetrics International released its global corporate governance rankings, which rated Ireland, the UK, Canada, Australia and the US as the most open executive regulatory systems.