The Hong Kong Institute of Chartered Secretaries

Q1. Has there been any progress following the ICSA international Council meeting held on 2 February 2012 regarding changes to the Charter and bye-laws?

The ICSA international Council set up a sub-committee to amend the Charter and draft the new bye-laws according to the wishes of members as expressed during the ICSA General Meeting held on 8 December 2011 for submission to the Privy Council for approval. This Group of Four as it became known, extended its remit to include a general cleaning up of the Charter and bye-laws so as to avoid up-dates in the near future. While this has led to regrettable delays in submitting the relatively simple Charter and bye-law changes demanded by those members who requisitioned a general meeting of ICSA members, many of whom were from the China Division, the extended amendments to the Charter and bye-laws undertaken by the Group of Four should reflect the wishes of members as expressed during the General Meeting held on 8 December 2011 and will include the changes to the Charter and bye-laws that members voted for during this meeting.

It is expected that the amended Charter and new bye-laws, which, as stated above, will include the changes to the Charter and bye-laws requested by members globally, will be submitted as a final draft to ICSA Council and Privy Council for approval during September 2012. Details of the amended Charter and new bye-laws will be sent to members once the Privy Council has given its response and a general meeting for members will be called for to conclude all constitutional matters.

Part 2 (Updated on 14 February 2012)

FAQs regarding the progress of ICSA bye-law changes

Q1. What was the outcome of the two general meetings held on 8 December 2011 in London?

The first meeting was adjourned as there were numerous and material errors in the Notice of Meeting and Explanatory Memorandum. After this adjournment, the ICSA International President, Chief Executive and Clerk to Council all exited the meeting venue. It was later claimed that the meeting requisitioned by members could not be held because the first meeting had not been concluded and the notice of the second meeting stated that it would start either at 7:30PM or at the conclusion of the first meeting.

The second meeting, requisitioned by 218 members, was convened by those members who remained after the first meeting was adjourned. As a quorum was present with not less than 34 members, the meeting requisitioned by members was in the opinion of the Divisions validly convened and it proceeded. A chairman - Frank Bush FCIS (an international past President from the Australian Division) - was voted for by the meeting and duly appointed. The two resolutions of the second meeting were passed by the required majority of voting on a show of hands. All proper meeting procedures were followed including attendance records, minutes, discussions and respectful acknowledgement of views opposing the motions.

Q2. How many proxies were collected from members of China Division and other divisions of ICSA?

More than 3,000 proxies were received from HKICS members for the two meetings respectively with approximately 60% of the China Division membership lodging proxies for these meetings.

Internationally, it is estimated that the Divisions including China Division lodged more than 10,500 proxies (about 50 per cent of the total membership in the Divisions) with 99 per cent directed against the resolutions in the first general meeting and 99 per cent directed for the resolutions in the second general meeting. The exact figures have not been officially published.

Q3. What happened following the two General Meetings?

On the following day of the meetings, minutes of the meeting requisitioned by members were signed by Frank Bush, the Chairman of the meeting and sent to the Institute's head office at Park Crescent as conclusive evidence of the result. A copy was also provided to the Privy Council, which oversees ICSA on behalf of the Crown.

A letter dated 29 December 2011 from Frank Bush along with the minutes of the second meeting was delivered to the Clerk of Privy Council to provide details of the events of the meeting and seek advice on obtaining the Privy Council’s approval for the change to the bye-laws and Charter in accordance with the conclusion of the second meeting.
On 22 December 2011, an advertisement was placed in UK edition of the Financial Times (a UK newspaper).
An international Council meeting was held on 2 February 2012. One of the agenda items was the general meetings of 8 December 2011.

Q4. What was the outcome of the ICSA international Council meeting held on 2 February 2012 in London?

A message was sent to ICSA members from ICSA international Council:

ICSA International Council (Council) is pleased to announce that at its meeting on 2 February 2012 there was overwhelming support for a new constitutional framework which will allow us to work more closely together. It was agreed:-

To put to the Privy Council for its consideration the new Bye-law providing for proportional representation on the Council
To protect the standard of the professional qualification by incorporating it into a new Bye-law. This together with other Bye-law changes previously agreed by the Council will be put to Members for approval as soon as they have been reviewed by the Privy Council.
To ensure the UKRIAT assets and liabilities remain under the control of the UK Committee.

We have worked together to formulate these proposals and will continue to do so in the drafting of the new Bye-laws. Feedback from Members has been heard and consultations with them are ongoing. This agreement represents great progress and the opportunity to update the governance structure of the Institute. As a consequence of these very positive developments Council also decided to withdraw the proposals put to the general meeting held on 8 December 2011.

On behalf of the ICSA International Council:

Frank Bush FCIS
Gavin Downs FCIS
Bob Lees FCIS
Lorraine Young FCIS

Q5. Any follow up action in progress after the ICSA international Council meeting held on 2 February 2012

The ICSA international Council has set up a sub-committee to follow up and draft the new bye-laws for submission to the Privy Council for approval. Updates on the changes to the bye-laws will follow once the Privy Council has given its response.

Part 3 (Updated on 14 February 2012)

FAQs regarding the developments of HKICS – ICSA UK relationship and ICSA Notices of General Meetings

Q1. How should Members vote for the two ICSA General Meetings?

Two General Meetings of ICSA members have been called for 8 December 2011. Members should have received notices of both by now. HKICS Council advises members, if not attending the meeting, to consider voting via proxy in the following ways:

Vote “AGAINST” the three resolutions of “First meeting” (by completing the white proxy form), that is the UKC proposals to make changes to the ICSA Bye-laws, and
Vote “FOR” the two resolutions of the “Second meeting” (by completing the yellow proxy form), that is the Requisitioned General meeting, with a view to acquire a fair and reasonable representation of all members on ICSA international Council.
The proxy forms have been posted from the UK. Your Council asks you to give your proxy to SENG SZE KA MEE NATALIA FCIS FCS (Natalia Seng)who is the international Representative of the China Division on ICSA international Council, or failing her, ROBERT DAVID LEES FCIS who is the current International Vice-President of ICSA (he is from the Southern Africa division). Both will attend the general meetings. Please complete the proxy forms in accordance with the specimens (hyperlink) and return the two forms to the HKICS secretariat on or before 2 December 2011. Your proxies will be personally delivered to ICSA headquarters in London. This arrangement will ensure that your proxy forms arrive on time, and properly validated and your votes counted.

Q2. Why are the recommendations from HKICS Council and other Divisions to vote AGAINST the resolutions in the first general meeting and FOR the resolutions in the second general meeting?

A. Your Council supports all measures that are necessary to amend the bye-laws to accord with the core values and principles of good governance, including removal of the in-built UK majority on the ICSA international Council. The bye-law changes proposed in the First Meeting do not address the issue of the UK majority on the ICSA international Council and therefore HKICS council recommends that Members vote “AGAINST” the three resolutions.

B. Your Council asks members to vote and to join the other members who have made the requisition to change the bye-laws for a fair representation of all members on ICSA international Council wherever they reside. Therefore the Council of HKICS recommends that Members vote “FOR” the two resolutions of the second meeting which will allow the Charter and bye-laws changes that will lead to the removal of the inbuilt UK majority on the ICSA international Council.

Q3. Have there been any other developments on the relationship between ICSA UK and HKICS?

A. There have been a number of developments of which member’s should be aware. The first is that as of 31 August David Wilson FCIS, resigned as Chief Executive and Secretary of ICSA. Notice of his resignation was sent to the divisions on 13 September 2011.

B. The agenda and papers for the emergency meeting of ICSA international Council to be held on 25 October were received on 19 October and include resolutions to de-delegate the Southern African, Australian and New Zealand divisions. The status of the China Division/HKICS is to be discussed.

C. During the meeting of ICSA international Council on 25 October 2011, no divisions were de-legated or dissolved. The status of HKICS was not discussed. Two general meetings of members were called for 8 December 2011 at London.

(1) The ‘First meeting’ was recommended by the UKC to make various changes on the ICSA bye-laws to try and improve the efficiency of business of international Council and ICSA. However, given that the UK majority is still included in the bye-laws which is contrary to the views of HKICS Council, your Council recommends that you vote “AGAINST” the resolutions proposed. (See Q.1 above).

(2) The ‘Second meeting’ was called subsequent to international Council being requisitioned by over 200 members across all divisions. Your council recommends that you vote “FOR” the proposed resolutions (See Q. 1 above).

Q4. What is the status of the Notice to de-delegate HKICS since the Notice received on 1 April 2011?

A. Further to the reply from the Office of the Privacy Commissioner for Personal Data on 24 June 2011, HKICS informed ICSA UK of its obligations and provided a soft copy of the names, status (Fellow or Associate), addresses and membership number of members residing in the China divisional territory to ICSA UK.

B. An authorisation form to provide all of the personal information requested by the ICSA UK was sent to all members in late July 2011 to comply with the advice given by the Office of the Privacy Commissioner for Personal Data, members who return this form will have all of their personal information send to the UK. Members who do not return the completed form will be presumed to be in favour of NOT sending their private information to the UK as requested by ICSA in the UK.

C. HKICS and other divisions have not heard from the ICSA UK regarding the Notice. The resolutions to delegate each of the divisions have not been drafted and sent to the international Council for consideration although an emergency meeting of ICSA international Council has been called for 25 October 2011 in London, UK which will include an agenda item regarding de-delegation.

D. Two focus group meetings with the Fellows and Associates took place on 27 June and 5 July 2011.

E. Two Members’ Forums took place on 7 and 13 July 2011 respectively to communicate with members on the HKICS/ICSA relationship matters.

F. The summary of the focus group meetings and the Members’ Forums were updated onto the Institute website.

Q5. What follow up action has been taken by HKICS and the other divisions?

A. HKICS Council along with other divisions has resolved to support all the measures that are necessary to amend the Bye-laws (as detailed in Attachment) to accord with such core values and principle (including removal of the inbuilt UK majority on ICSA Council); to endorse a recommendation to amend the Charter to facilitate such Bye-law amendments; and the proposal to call for a general meeting from the members of ICSA China Division to propose the Bye-law amendments.

B. Members in respective divisions signed a requisition form to ask ICSA Council to call a General Meeting of ICSA members for the purpose to amend its bye-laws. A total of 223 requisition forms were signed and submitted to the UK from the eight divisions. HKICS members contributed more than 130 forms. Such numbers show the strength of feeling that members have with regard to having reasonable and proportional representation on ICSA international Council.

C. On 26 July 2011, with help from the ICSA Southern African Division, members submitted 223 requisition forms from the eight divisions to the ICSA, Park Crescent for the purpose of calling a general meeting of the members of ICSA. The purpose of the general meeting is to propose the necessary Charter and Bye-law amendments of ICSA as detailed in 17A above. The ICSA Clerk to the Council has acknowledged receipt of the forms along with a down payment of GBP3,350 to cover the cost of the general meeting.

D. HKICS members together with other divisions’ members who have submitted the requisition form received a letter dated 12 August 2011 sent by Russell Morrice FCIS, Clerk to Council, ICSA requesting that they pay an additional total sum of £20,199 for calling and holding the general meeting.

E. All other divisions, after considering the points given and the costs breakdown presented, agreed with the following comments:

Communication from the Institute to the members with the divisions have been channelled via the respective divisions for many years and there is no basis for changing this now or using it as an obstacle to delay the general meeting which members have called;
The most efficient and effective way to approach this important issue is for the divisions to reprint the circular for the general meeting and post it to those members residing in their respective divisions;
A list of member names and numbers can be sent to the Secretary, ICSA along with any proxy forms for verification by the scrutineers;
Likewise, the postage required is therefore postage needed to mail to members within UKRIAT. The costs of £10,944 allocated to postage and fulfilment of proxies and AGM notices to Members in the divisions can be deducted. The additional costs of £9,255 should be sent to ICSA Park Crescent.

F. On 19 August 2011, ICSA Southern African Division replied to Russell Morrice and deposited £9,255 to the ICSA bank account on behalf of members.

G. On 11 October 2011 HKICS and other divisions received a notice calling an emergency meeting of ICSA international Council which included a list of possible agenda items one of which was a general meeting of members resulting from the requisition forms sent to ICSA Secretary in the UK. The meeting will be held on 25 October 2011 in London, UK.

Part 4 (Updated on 17 June 2011)

FAQs regarding the relationship between ICSA and HKICS

HKICS - ICSA UK Relationship

Q1. How do ICSA’s governance and management affect the relationship between ICSA UK and HKICS?

A. Since an amendment to the bye-laws of ICSA in 1999, members residing in the UK and Republic of Ireland (excluding those residing in the Associated Territories which are countries/territories where Chartered Secretaries reside but number less than 1000 which is the minimum number required for a division) have been guaranteed a majority of votes on the international Council of ICSA to ensure UK control.

B. Currently ICSA members living in the UK, Republic of Ireland and Associated Territories (or UKRIAT in ICSA parlance) make up approximately 36% of the total membership of ICSA. The other 64% of members reside in the divisional territories (Australia, Canada, China/HK, Malaysia, New Zealand, Singapore, Southern Africa and Zimbabwe).

C. The total number of international Council members currently stands at 28; of whom 18 are UKC members (this includes two past presidents who are ex-officio members); the divisions have 10 representatives which also includes two past presidents who are ex-officio members. HKICS, which has approximately 14.5% of ICSA membership, has just 4% of the vote – one actual vote; each divisional representative also has one vote, as does each ex-officio member.

D. This in-built majority of the UKC puts the divisions at a disadvantage if, as has recently occurred, the UKC members vote en bloc to push through proposals that are advantageous to UKRIAT members but put members in the divisions at a disadvantage. Current UKC backed proposed reforms, if adopted, would lead towards a centralisation of all decision making and operational control of ICSA to the UK.

Q2. Why did HKICS not supply the information that was requested by UK Committee that ultimately led to HKICS being served with the Notice of international Council on 18 April 2011?

A. Your Council sought legal advice on HKICS’ obligations and restrictions regarding the provision to ICSA of members’ information once the Notice of the meeting of ICSA international Council was received on 1 April 2011. In consideration of the legal advice and having regard to the Hong Kong Personal Data (Privacy) Ordinance, your Council informed ICSA UK on 14 April 2011 that HKICS can provide the names, status (Fellow or Associate), address and membership number of members residing in the China divisional territory. The additional information requested by ICSA UK is not covered by the Ordinance (i.e. Chapter 98) and is of a very personal nature. On this, we have written to the Office of the Privacy Commissioner for Personal Data on 13 May 2011 and are awaiting their reply.

B. There has been no central register of ICSA members since at least 1999 as each division and the UK has kept separate member and student registers in their respective territories. If ICSA international Council wishes to communicate with members it is incumbent upon the divisional and UK committees (at their expense) to disseminate this information to members and/or students.

Q3. What happens to the role of HKICS if the resolution to de-delegate HKICS/Division is passed?

HKICS will cease to represent ICSA in HK and mainland China and will not be the China Division of ICSA. The mission and standards of HKICS will remain unchanged. HKICS will continue to be an independent professional body in Hong Kong and China and will continue to promote the professional qualification of HKICS members and the study and practice of governance, secretaryship and administration of companies and other bodies.

Q4. Is HKICS negotiating with ICSA to try and maintain the status-quo?

A. HKICS will continue to communicate with ICSA to ensure that we continue our successful association; however the current proposals that some UKC members of ICSA international Council are trying to impose are, in the opinion of HKICS Council, inappropriate for an international professional body such as ICSA.

B. The bye-laws of ICSA cannot be used to circumnavigate HK laws. In additional to seeking legal advice HKICS Council has, on 13 May 2011, written to the Privacy Commissioner for Personal Data seeking guidance on the provision of the additional information requested by ICSA. If required, HKICS will seek permission from members before sending such information to ICSA in the UK.

Q5. What is the status/relationship between ICSA and the other ICSA divisions?

Apart from Canada which complied with the initial request by the then International President Andy Cowe (who resigned 14 March 2011) the other divisions of ICSA have also been served with a similar Notice as that served on HKICS regarding the lack of provision of member information. Each division is seeking legal clarification on whether or not it can provide members’ personal information to the ICSA in the UK.

About membership

Q6. Would members continue to have dual membership of ICSA and HKICS if HKICS was de-delegated? Would the right to use the post-nominals ACIS ACS or FCIS FCS be affected?

Members would remain members of ICSA and HKICS. However, if HKICS and ICSA do not continue in their current or similar relationship, at some point members may be requested to pay two membership fees. The right to use the post-nominals of ACIS/ACS or FCIS/FCS will not be affected unless a member ceases to belong to the issuing organisation.

(Remark: The ICSA UK has announced to raise membership fee in 2011/2012 by approximately 5% to £299 (approximately HK$3,842 using an exchange rate of $12.85 = £1.00) for Fellow, £267 (approximately HK$3,431) for Associate and Graduate respectively.)

Q7. If the resolution to de-delegate HKICS/China Division is passed, what will be the global recognition of HKICS membership?

A. The current policy of HKICS to promote recognition of our professional qualification and profession generally will not change. Should ICSA choose to revoke the delegation agreement with HKICS so that we no longer represent ICSA in China/HK, in the first instance HKICS would seek to negotiate with ICSA (UKC) and other ICSA divisions for mutual recognition of HKICS and ICSA qualifications. Recognition by other countries will be sought according to the relevance and requirements of members.

B. With regard to Hong Kong it is worth remembering that it is your membership of HKICS that is recognised by local regulators and bodies and in the Companies Ordinance so in terms of local recognition, membership of HKICS is important for your career in the corporate secretarial profession whether it be in the area of professional services or listed issuers.

Q8. If HKICS/China Division is de-delegated, will the recognition by the regulatory bodies here in Hong Kong of HKICS change?

No change to the recognition of HKICS members is anticipated. The Council of HKICS will continue to maintain the high standard of the HKICS professional qualification as well as recognition by the regulatory bodies in Hong Kong. Please also refer to 7B above regarding the recognition of your HKICS membership.

About studentship

Q9. If HKICS/China Division is de-delegated, what would be the impact on students, for those who are attending examinations or those who are preparing to attend examinations?

A. Registered students will continue to be students of HKICS and can complete the qualifying examinations of HKICS that lead to membership within the requisite period. The HKICS qualification will continue to be recognised locally and HKICS will negotiate with ICSA (UKC) and other ICSA divisions for mutual recognition of HKICS and ICSA qualifications. Recognition by other countries will be sought according to the relevance and requirements of members

B. If the HKICS Delegation Agreement is revoked by the UK there is a possibility that current students would become members of HKICS only rather than, as is currently the case, receiving ICSA and HKCIS membership. This is something that the Council of HKICS will work hard to avoid and, as mentioned in 9A, recognition by other countries will be sought according to the relevance and requirements of members,

Q10. What arrangements for students will be made by HKICS / ICSA regarding the examinations during the transitional period should HKICS be de-delegated?

Please refer to the answer to question 9 above; HKICS will continue the qualifying examinations for the HKICS qualification which is anticipated to continue to be recognised. In addition, if the delegation agreements of HKICS and/or those of the ICSA divisions are revoked by the UK, HKICS will negotiate for mutual recognition with ICSA (UKC) and other ICSA divisions; recognition by other countries will be sought according to the relevance and requirements of members.

Q11. If HKICS/China Division is de-delegated, what would be the impact on current CCA (Collaborative Course Agreement) students?

A. Under the CCA signed between HKICS and the local universities (including Open University of Hong Kong, The Hong Kong Polytechnic University and City University of Hong Kong), current CCA students will become ICSA Graduates upon completion of the respective Master course. As a Graduate possessing the requisite work experience and is a fit and proper person, one is currently eligible to apply for both HKICS and ICSA membership.

B. If the CCA is revoked by ICSA UK due to de-delegation of HKICS/China Division, HKICS will negotiate for mutual recognition with ICSA (UKC) and other ICSA divisions for mutual recognition of HKICS and ICSA qualifications; recognition by other countries will be sought according to the relevance and requirements of members.

About HKICS

Q12. Will the vision and mission of HKICS change if the relationship between ICSA and HKICS changes?

It is not envisaged that the vision and/or mission of HKICS in Hong Kong, China and internationally will change as these are written into the memorandum and articles of association of HKICS. Thus even if the relationship between ICSA and HKICS changes HKICS will continue in the same manner as befits an independent professional body. Such activities will include:

The promotion of the HKICS professional qualification (Chartered Secretary) to the stakeholders and in general working in the best interests of our members;
Continued promotion of the study and practice of good governance, secretaryship and administration;
In China, we will continue with the promotion of the HKICS qualification to ensure that our stated goal that it is recognised by the Mainland regulators as a suitable qualification for appointment as a board secretary of the Mainland listed issuers is obtained.
Internationally, we will continue to work with the Corporate Secretaries International Association (CSIA), a Geneva-registered global organisation, to promote a single global voice for corporate secretaries and governance professionals that will be heard and respected by the international business community as well as by international government agencies such as the World Trade Organisation (WTO), United Nations, International Labour Organisation, Organisation for Economic Co-operation and Development, and many others. We will also look for international professional recognition among the national member bodies of CSIA.

Q13. What is the role of Corporate Secretaries International Association (CSIA) in this incident?

CSIA, a Geneva-registered global organisation, was established in March 2010. It was formed to give a global voice to corporate secretaries and governance professionals which they previously lacked. Please refer to the answer to Q12 for its relationship with HKICS.

In order to maintain global recognition of HKICS members and enhance the international status of governance professionals, HKICS is working with CSIA member organisations, including national/territorial representative organisations from Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Singapore, Sri Lanka, Southern Africa, UK/Ireland, the US and Zimbabwe to seek for a mutual recognition among each other.

To learn more about the mission and vision of CSIA, please visit www.csiaorg.com

Q14. Is there a timeline for the change of relationship between ICSA UK and HKICS (e.g. if ICSA international Council decides to de-delegate HKICS)?

A. It should be noted that HKICS Council does not recognise the validity of the meeting on 18 April 2011 which it belives was invalidly called or the Notice calling the meeting which it believes was invalidly issued. There was no explanation of the nature of the emergency and insufficient information in the form of documentation to allow ICSA Council members to make informed decisions about the purposes given in the Notice calling for meeting of ICSA international Council on 18 April 2011.

B. Furthermore, the reasons for convening the meeting of 18 April 2011 with less than the required 28 days’ notice were not given. After receiving legal advice, your Council is of the opinion that the meeting of 18 April 2011 was not properly called.

C. A compliance timeline of 28 days was given to HKICS in the Notice received on 18 April which stated that HKICS was in breach of the bye-laws due to the lack of provision of membership information. This deadline expired on 16 May 2011.

D. In order to de-delegate HKICS or any divisional committee of ICSA the international Council of ICSA must pass a resolution. Unless an emergency meeting of international Council is called, a minimum of 28 days notice must be given to international Council members prior to a meeting. In the case of an emergency the notice period can be shortened to 14 days.

Q15. Will HKICS organise a gathering or forum for Members to exchange or seek their views on the relationship of HKICS and ICSA?

Members/Students’ thoughts and opinions are important to HKICS as the Institute represents their interests. HKICS intends to organise a members' gathering or forum to provide a platform for members who wish to raise questions or express views on the issues with regard to the HKICS-ICSA relationship although no date has been set. Details of the gathering/forum will be announced in due course.