Governance of Subsidiaries and Associates
Following the changes affecting our Executive Directorate in 2014, the Chief Executive Officer is responsible for oversight on governance of subsidiaries and associates. He is supported in this role by the Human Resources Director and the Operations Director.
Our wholly-owned and majority-owned subsidiaries are mandated to adopt a set of management directives relating to internal controls, consultation and reporting:
- Internal controls — Subsidiaries must implement appropriate procedures and management systems to ensure compliance with relevant laws and regulations, as well as the Company’s specific requirements on safety, enterprise risk and asset management, among other issues.
- Consultation — Headquarters must be consulted on matters relating to material variation of the concession or franchise agreement, appointment of senior managers, litigation and non-compliance with relevant laws and regulations, among other issues.
- Reporting — Subsidiaries must provide timely reporting on financial, operational and safety performance.
Our subsidiaries and associates participate in various forms of agreements with local authorities, including Operations & Maintenance (O&M), Public-Private Partnerships (PPPs), and Build-Operate-Transfer (BOT) arrangements. Our ability to influence environmental, social and governance impacts through the activities of our subsidiaries and associates is largely determined by the specific terms of these agreements as well as local conditions and circumstances.
Code of Conduct
All members of staff, irrespective of their location of employment, are expected to abide by the Code of Conduct. They should not only conduct themselves in accordance with the highest ethical standards at all times, but also identify and address any instances of behaviour by other members of staff that are not in accordance with the Code.
Fair and Ethical Business
We promote a culture of fair and ethical business practices across all of our subsidiaries and associates. With respect to prevention of bribery and illegal practices, whenever the laws or customs of another country impose stricter standards than our own anti-bribery regime in Hong Kong the higher standard always prevails.
Shared Support Services
A number of business units in Hong Kong provide shared support services to promote the adoption of best practices in our subsidiaries and associates. For example, the Corporate Finance and Development team provides support for evaluation and formulation of investment proposals, the Human Resources Division provides assistance on strategic issues relating to staff, and our Operations and Safety team ensures full compliance with the corporate safety policy and strategic plan.
KEY PRINCIPLES AND PROCESSES
Assurance and Audit
We conduct thorough assurance and regular audits on all subsidiaries and associates, including a safety assurance assessment and enterprise risk management review, before the start of operations and following any substantive change in operational or business activity.
In general, our subsidiaries and associates are run by local teams; whenever possible, we bring on board people who share our values and contribute to fostering our unique corporate culture in their local context.