Public companies listed on the Hang Seng Index (HSI) and the Hang Seng Chinese Enterprise Index (HSCEI), have seen a major improvement, according to a new report by PwC Hong Kong.
The annual report said that 92% of the firms they reviewed have improved their internal controls and risk-management systems, which is a 23% increase from last year.
Regarding both of the Hong Kong indices, HSCEI has made the largest gain, with a 25% increase in the number of firms that are making appropriate disclosures.
According to the report, the HSCEI has made a noteworthy attempt to improve disclosures in managing and identifying risk, with now 80% of companies on the index now showing this information—a rise by 57% from last year.
“Since the amended corporate governance code became effective, many of the large-cap listed companies have enhanced their level of disclosure on internal control and risk management,’ said Eric Yeung, PwC Hong Kong risk assurance partner, in a press statement.
“We are particularly happy to see a significant improvement in the HSCEI constituents. The results [show] that companies recognize the positive effect of enhancing corporate governance.”
Not everything has been improved though, and Hong Kong-listed companies still have work to do, according to PwC. Although 97% of firms claim to have an internal audit function, only 36% disclose sufficient resources, qualifications and experienced internal audit staff.
Currently, the Hang Seng Family of Indexes comprises more than 400 real-time and daily indices. Hang Seng Indexes will continue to broaden its index series to meet the widening spectrum of investor demand for index investment solutions.