Laura Cha, Chairman, Hong Kong Exchanges and Clearing Limited; Non-executive Chairman, The Hongkong and Shanghai Banking Corporation
Interviewer: Claire Zillman, FORTUNE

MPW Summit 2020: Inside The Pandemic-Era Boardroom

Uncategorized

Lessons on corporate governance in a time of uncertainty.

Hi Laura, thank you so much for joining us. That's an M. P. W. Summit. We're so happy to have you. Thank you Claire for having me. Great. Um I just want to jump right in. Um I think everywhere has really had, its an under statement to say it's an extraordinary year, but Hong kong especially has not only experienced the coronavirus but has also dealt with months of um protest and then this new national security law that went into place just a few months ago, all of that news has really prompted people to question the future of Hong kong as this bridge between the east and the west. How do you see the future of the city taking shape and especially as it relates to the market. First of all, I think there are peoples of course have questions about all the, all the events that have taken place and like everybody else, we are trying to weather it. We're trying to go through it as as well as we can. It is no question, a difficult situation for Hong kong. We have to navigate between the east and the best. And uh we do uh see that we will continue to play a very important role, especially in the current tension between the US and china Hong kong remain in excellent connector. Our role has not changed. Um People may have question and I think those questions are being answered. But by and large, our market is solid are fundamentally. We are an attractive market, operationally. We're resilient, We are stable, were steady and that's why we continue to attract investors to our market. Right? When you think that those questions are being answered, how would how would you characterize the answers that you're getting? Are they positive? Are they, are they certain or are there a lot of unknown still out there? Well, there's there are a certain amount of unknown, There are certain amount of um doubts and I think it is natural as time passes and we will see you know this as method developed, I will remain confident that Hong kong uh will continue to be resilient and we will be back on our feet. In fact, we have, you know, if we look at the financial market, we have been pretty stable. Right right. One of the interesting trends that's really marked the Hong kong market recently. Um are these secondary listings of U. S. Listed chinese firms that are now turning to Hong kong? Um A lot of analysts see that as these companies sort of buying an insurance policy against the escalating tensions between china and the US. How do you see that trend? I think first and foremost we have been an attractive market. As I said, we have been the number one globally in terms of I. P. O. Fund seven years out of the 11 years in the in the lab in the past. So fundamentally we are strong enough to attract these listings. The secondary listings we see as a natural phenomenon, particularly during the U. S. China attention, whether people are looking for an insurance policy or people are rethinking about a prefer place for listing. We, what we can do in Hong kong is to make ourselves as clear transparent so the investor continue to have the confidence. The issue will see that we are a liquid market where the rules are clear and fair. I think those are the fundamentals that we have always appealed by and we haven't changed. So whether that's going to be a trend or will continue to be the case, I think I'm quite confident that it will turn into not just a short term trend but a long term phenomenon. Right. Well, I was gonna ask if you see it, if you see it outlasting the current sort of height of the, of the U. S. China attention. Perhaps after november, there's a new administration and it takes a different approach to um relationship with. How do you think that could shape the trend of the secondary listings? I have always been of the view that the issuers would choose where the market that makes the most sense to them, where they can raise the most capital, where they can reach the, reach the most investors. So in that regard after the election, perhaps people who might have different views, but perhaps they will not. And what we can do in the Hong kong at the hk hK X is to continue to make our market strong and vibrant and attractive to the others. Right, Right. When we talk about the tension between Washington and Beijing, there's a lot of national companies that do business in both markets. Um HSB the company, the bank that before you sit on it is one of the companies have sort of been most tightly caught between that tension and there's a lot of other companies. Of course, there's a Tic tac saga going on. It seems like a really difficult, if not impossible situation to put these, these companies. And how do you, how do you see it clear? You're absolutely right. It is extremely difficult in the current circumstances. And the companies that are doing this, this both in china and the US um have to navigate very carefully. And um, I think the uncertainty create a great deal of anxiety on the part of the company and on the part of the shareholders or the part of the management and we are doing the best we can, I think, uh not only in HSBc, but in HK X as well. Um were there are listed companies that, you know, that might be uh sanctioned and we have encountered those situations before and we've been able to handle that uh for the companies themselves, there's no question one has to tread very, very carefully right. Um one reason that you're sort of a fascinating figure to me is because you sit on board not just at eight the next in Asia, but then in europe as well. So you really had a global view of the last few months, um especially as it relates to corporate governance. Um, I'm curious, obviously the meetings themselves are taking place differently. A lot of it's happening virtually, but I'm wondering if the substance of the meetings are having on these two continents have changed as well as the world's or grapples with this once in a generation crisis, what how the conversation shifted if at all? I think first and foremost all the companies that whose sports I sit on the first concern is really the health and well being of the staff of the employees. Uh no question whether in asia or in europe, when the pandemic happens, you know, you know, the short term where we go into split team lockdown work from home etcetera. First and foremost, concern is really understand, I see that in every company that I sit on then, you know, beyond that um Unilever is unique in the sense that sustainability is already part of this agenda, so that is a continuous discussion on that. HSBC has always been one of the forefront in terms of financial institution paying attention to. Uh huh. Yes, the area H K X. We have heightened our role. We have three different roles in terms of the sustainability. Yes, she community, you know, we are regulator, we can stipulate rules, we are listed company ourselves, we champion these principles and we practice them and we facilitate, you know, we set up a green exchange so that people have a single portal where they can get information on the S. G. So different companies are reacting to the crisis. I think many, I see many companies already uh discussion on the subject. The pandemic brought these what the subject to the forefront governance as well, so it's just different act. Yeah. Right. I'm sorry. So the so the refocus on or or a heightened focus on E. S. G. Is one of the results that you've really seen from from this crisis. Yeah. Okay, great. Um Laura I think we have to leave it there. I'm I'm so thankful that you are able to join us and give us um this global perspective on the current current state of the world, especially when it comes to finance on the market. And thank you so much for joining us. Yeah. Thank you, Claire. Thank you.