Mr John KC Lee, GBM, SBS, PDSM, PMSM
Chief Executive
The Government of the Hong Kong Special Administrative Region
2 Tim Mei Avenue
Tamar, Hong Kong
By mail: policyaddress_consultation@fso.gov.hk
26 September 2023
Dear Mr Lee,
POLICY ADDRESS 2023
The Chartered Institute of Management Accountants (CIMA) has a long-standing relationship with the Hong Kong, Mainland and Global business community.
CIMA is a leading professional business and accounting organisation where our members meet the highest standards as business advisors and trusted decision makers. We welcome the opportunity to contribute to the development of the Hong Kong Government’s Policy Address, and to offer some suggestions which we believe will contribute to the success of the Hong Kong economy.
We would like to focus our submission on three key priorities:
Strengthen the economy;
Talent; and
Trust
Strengthen the Hong Kong economy
Our engagement with members in Hong Kong and around the world gives one common message: Business needs certainty.
We encourage Government to continue to develop policies which are designed to provide a stable business environment for Hong Kong companies. Specifically, with the global introduction of BEPS 2.0, and potential impacts on Hong Kong corporates and Family Offices, providing certainty over the tax and regulatory landscape in Hong Kong over the next few years will be essential.
Other measures that could be considered include developing company and business investment related policies that have multi-year commitments so that business can plan, and invest, for the future. Communicating and articulating policy intent, actions and timelines would also allow businesses to better work hand in hand with
Government and enhance resilience in their strategy and operations to take account of these potential changes.
Talent
The value of a professional qualification is significant and there is an important role for management accountants within a thriving Hong Kong. CIMA’s management education and training are well recognised as a global qualification for top business leaders, and in the public sector. Professionally qualified management accountants enhance business competitiveness through creating and sustaining value creation, so that businesses can manage risk and expand and thrive for the future. Hong Kong is an established business centre, and we continue to hear from our members that there is a high demand for talent. Many have referenced their ongoing challenges with the recruitment and retention of individuals with skills and experience in leadership, management and finance. Skills and labour are an integral component of a strong economy.
We would encourage the Government to deliver the policies announced in the 2022 Chief Executive Strategy, and to focus on talent development initiatives which promote a prosperous work force for the long-term benefit of Hong Kong. Talent will always be attracted to the city, but it is vital that there is a strong sense of job security and longterm career prospects.
We suggest that the Government consider the introduction of initiatives which are focused on skills and training to support the economy and future growth, namely:
Offer skilled and professional Apprenticeships and/or Work Placements. From our own experience of engagement around the world, ensuring that any scheme is fit for purpose for the SME sector will be important. A pre-requisite of the CIMA qualification is to obtain, document and certify practical experience. This balances academic and real-life experience, and enhances career opportunities. CIMA offers our management accounting qualification under an Apprenticeship model in some jurisdictions (specifically, the UK), so that businesses can benefit from direct funding incentives to develop the skills which best support business, and long-term economic growth. We suggest the Government consider similar programs, in particular for financial services and IFC related roles.
Encourage a commitment to lifelong learning and ensure that policies recognise the growing need for digital learning.
Promote talent retention through training related tax incentives for companies.
Focus on creating a culture of future skills, including management accountancy, other STEM subjects, Sustainability and Digital Transformation. In relation to STEM, we would like to share with you that CIMA are currently engaged with policy makers in the UK in relation to the future recognition of accountancy as a STEM subject given the growing use of technology within the accounting profession. Accounting is already recognised as a STEM subject in the US, and AICPA are proactively looking to enhance the current recognition.
Enhanced recognition of management accountancy
There has been a traditional policy focus on audit and public accounting in Hong Kong. Previously, we have highlighted the need for Government to consider business and finance skills to be of equal importance to audit and public accounting skills. We believe strengthening “in-house” finance teams will help to add value to business and will strengthen the Hong Kong and Mainland economy over the long term.
We would like to share some insights into measures the Government could take to address the current imbalance, and to recognise the significant role which management accountants in business will play in the years to come, and we hope the prosperity of Hong Kong and the Greater Bay Area.
Recognition of CIMA qualified management accountants by the Hong Kong Government (that is, statutory) would be an important step forward. It would encourage a healthy balance between backward-looking corporate reporting of historical financial information and future-looking business value creation, integrated thinking and sustainability reporting. We believe management accounting skills are best placed to support the long term needs of investors.
We encourage Government to support the launch of full-time and part-time evening degree courses to further train professionally qualified management accountants. You may be interested to know that CIMA currently provides advanced training in collaboration with close to seventy universities across the Mainland.
Trust
The certification of identification documents is a common task allocated to members of professions around the world. Management accountants are recognised as competent and authorised persons. Our members are recognised in statute and regulated by CIMA under anti-money laundering and counter finance terrorism provisions in other jurisdictions. We would suggest that Paragraph 4.10.3 of the current AML/CFT guidance provision could be revised to read “other professional persons such as certified public accountant, chartered management accountant, lawyer notary public or chartered secretary. A chartered management accountant would then refer to a person who is current full member of the Chartered Institute of Management Accountants.
Many governments are concerned with ensuring that companies and public policy is aligned with the global commitment to reduce carbon emissions and net zero strategies. With the International Sustainability Standards due to come into force from 1 January 2024, we advocate that there should be a policy focus ensuring that Hong Kong is seen and truly acts as a champion of the future of corporate reporting and enhanced investor confidence. Many CIMA members in Hong Kong will help set their company’s ESG strategy, will measure performance and as directors will be responsible for implementing policy outcomes.
We would welcome the opportunity to discuss our suggestions from the management accounting community in Hong Kong as we all work together with Hong Kong Government to make Hong Kong a great place to work and live and make it relevant for the next century.
Yours sincerely,
Andrew Harding
Secretary General
CIMA
Stephen Walsh
Chair
CIMA HKSAR Area Committee