Professional Services Committee

Minutes of a meeting of the HKCSI Professional Services Committee held on Wednesday, 6 October 1999 at 9:00am at the Chamber Boardroom.

Chairman:

Mr Anthony Griffiths, GML Consulting Limited

Present:

Mr Jack Flader, Gemini Group

Mr Richard J Garrett, Association of Consulting Engineers

Mr David Ho, Mastermind Executive Search Advisors Ltd

Mr Thomas Lee, Jebsen & Co Ltd

Mr Eddie Lee, Hong Kong Institute of Surveyors

Mr Alan Lung, Time/System (HK) Ltd

Mr Ian Robinson, Robinson Management Limited

Mr Horace Wong, Hong Kong Institute of Company Secretaries

Mr K K Yeung, HKGCC General Committee rapporteur

Dr W K Chan, Secretary General

Ms Charlotte Chow, Deputy Secretary

Absent:

Mr Bernard Hui, Hong Kong Institute of Architects

Apologies:

Mr Mike Allardice, Acceptor Corporation Limited

Mr Peter Barrett, Organization Development Ltd

Ms Phyllis Kwong, Phyllis K Y Kwong & Company

Mr Martin McMillan, Binnie Consultants Limited

Mr David John Rimmer, Rimmer & Company

Mr Louis L W Wong, Hong Kong Society of Accountants

Out of town:

Mr M Lintern-Smith, Law Society of Hong Kong

Mr Paul Woodward, Asian Strategies Limited

The Chairman welcomed new member Mr Alan Lung and Chamber General Committee Rapporteur Mr K K Yeung to the Committee.

Minutes of the meeting held on 3 March 1999 were confirmed and signed.

On corporate rescue and insolvency, Mr Robinson reported that the issue now seemed to have been resolved and it was believed that legislation on the issue would be presented to LegCo later this year. There was a likelihood of the legislation being implemented late next year. But there was no information on the exact timing of the legislation being put forward.

3.1 Dr Chan briefed members on the background of the Joint Professional Centre (JPC) for nine professional bodies and the Joint Business Centre (JBC) for small trade and professional associations. He said that in March 1997, the government task force on service promotion recommended that facilities be provided for nine professional bodies (JPC). As a result, space had been reserved by the government for the JPC. At that time, the HKCSI felt that there would be a strong case for a Joint Business Centre (JBC) for small trade bodies to provide for secretariat and seminar facilities. A proposal was presented to the Business and Services Promotion Unit (BSPU) in July 1997. The government Management Service Agency (MSA) was commissioned to conduct a study on the need for the JBC. The report was completed a few months ago and presented to the HKCSI recently. Dr Chan then briefed members on the findings of the report.

3.2 As the budget for the JBC estimated in the report was considered above market practice, the HKCSI presented a revised budget. As a result, it was estimated that the business centre could be offered to users at about 50% of the market rate for rents and services.

3.3 It was understood that the site for the JPC was unoccupied yet as the professional bodies and the Land Development Corp, owner of the site, could not compromise on the fitting out of the premises.

3.4 Members were invited to give their views on whether the HKCSI should recommend the establishment of a JBC or the merging of the JBC and JPC.

3.5 Members were concerned of the degree of government commitment, mode of operation, liabilities, availability of government subsidy – how much and how long, whether the small trade associations would ultimately take up space at the JBC, etc. Dr Chan felt that the management of the JBC could be contracted out to a commercial business centre operator and it would be viable if services were offered at about half of the market rate.

3.6 Mr Lung suggested that government subsidy should go to end-users directly and the centre could provide inexpensive conference facilities (with computers) for small businesses. He further suggested that HKPC should assist small businesses in providing the facilities instead of competing with the private sector. It was pointed out that admission criteria had to be set out clearly.

7. It was pointed out that the aim of the JBC should be to provide shared facilities/secretarial and mailing services, business centre type services for small trade bodies. After discussion, the majority of members were not in favour of the establishment of the JBC nor the merging of JBC and JPC.

4.1 Mr K K Yeung in his capacity as the founding Chairman of the Management Consultant Association of Hong Kong was invited to brief members on the establishment of the Association, which had 46 corporate members at present. Following a well-attended seminar launching MCA in Guangzhou, the association had started to gain recognition in mainland China as it had been invited by professional and trade associations in the Mainland to give briefings.

4.2 MCA had discussed with HKTDC to jointly organize a conference of Management Consultants next year in Hong Kong. The MCA also maintained dialogue with the government including the Information Technology Services Department on now Hong Kong management consultants could be made more used of by the HKSAR Government. Transparency in government tendering process was promoted eg disclosure of information on successful bidders and tenders.

4.3 The Chairman thanked Mr Woodward, Mr K K Yeung and the Secretariat in their work in the establishment of the MCA.

5.1 The Chairman drew members’ attention to a paper by Mr Nicholas Brooke on the Vision for Hong Kong which was tabled. He said that there were lots of concern and expressions on the future and vision for Hong Kong, such as whether Hong Kong should be developed into a world city, a hi-tech or cybercity, a financial centre, etc. He added that the lack of vision/direction for Hong Kong would threaten Hong Kong’s competitiveness regionally in a few years’ time. It should be ensured that a vision for Hong Kong be finalized within the next 10 months.

5.2 It was pointed out that within the HKCSI, the debate on the issue was for Hong Kong to compete with the best and be a world city. It was felt that although an important issue, it was however not shared by many people. It was agreed that the Chamber/HKCSI or even the various chambers and academia in Hong Kong should join forces to organize focus group discussions (instead of large scale conferences) to identify and build consensus on the vision for Hong Kong. One member was concerned that if Hong Kong did not come up with a vision quickly, we might face another exodus of talents and expertise, this time more quickly as many people had secured foreign passports already.

6) Openness of professional bodies in Hong Kong

The Chairman said that professional bodies in Hong Kong had been criticized for their closeness in recognizing foreign counterparts. The issue could be discussed at future meetings.

There being no other business, the meeting adjourned at 10:25 am.

Secretary

Confirmed

Chairman

Minutes of a meeting of the HKCSI Professional Services Committee held on Wednesday, 3 March 1999 at 8:30am at the Chamber Boardroom.

Chairman:

Mr Anthony Griffiths, GML Consulting Limited

Present:

	Mr Mike Allardice, Acceptor Corporation Limited
	Mr Peter Barrett, Organization Development Ltd
	Mr Richard J Garrett, Association of Consulting Engineers
	Mr Bernard Hui, Hong Kong Institute of Architects
	Mr Thomas Lee, Jebsen & Co Ltd
	Ms Daphne Li, Mastermind Executive Search Advisors Ltd
	Mr Ian Robinson, Robinson Management Limited
	Mr Louis L W Wong, Hong Kong Society of Accountants
	Dr W K Chan, Secretary General
	Ms Charlotte Chow, Deputy Secretary

By invitation:

Prof Michael Enright, University of Hong Kong

Apologies:

	Mr Alfred Chown, Executive Leasing Limited
	Mr Jack Flader, Gemini Group
	Ms Phyllis Kwong, Phyllis K Y Kwong & Company
	Mr M Lintern-Smith, Law Society of Hong Kong
	Mr Martin McMillan, Binnie Consultants Limited
	Mr David John Rimmer, Rimmer & Company
	Mr Richard Ruidl, International Assn of Business Communicators

Out of town:

	Mr Eddie Lee, Hong Kong Institute of Surveyors
	Mr Horace Wong, Hong Kong Institute of Company Secretaries
	Mr Paul Woodward, Asian Strategies Limited

The Chairman welcomed Professor Enright to the meeting.

Minutes of the meeting held on 21 July 1998 were confirmed and signed.

2.1 Mr Robinson told members that the Insolvency Committee of the Law Reform Commission had studied the issue of corporate rescue some time ago and the Financial Services Bureau had called for comments on the issue again recently with end February as the deadline. The issue now concerned the Insolvency Fund in relation to treatment of employees made redundant as a result of corporate rescue. Labour bodies were lobbying for benefits and preferences. If the bill was introduced to the legislature in March, it could come into effect by the end of the year.

2.2 Mr Robinson said that the only thing we could do was to urge the government to speed up the process which the HKCSI had done already. Within government, the only party pushing to have the legislation passed was the Official Receiver’s Office of the Financial Services Bureau. It was hoped that the issue could be unblocked after the February deadline.

3.1 Professor Enright was invited to lead the discussion for this agenda item. He commented that there was a lack of direction for professionals and generally for Hong Kong. There were two alternative models for future direction of Hong Kong:

i Hong Kong as a service centre with augmented manufacturing – there was a suggestion to attract particular types of industry and restore the manufacturing sector. Professor Enright felt it would be expensive and counter productive.

ii Another view that had started to emerge was the vision to make Hong Kong into Asia’s world city – at least a junior partner as New York and London, providing a series of functions and activities for other international cities.

3.2 He felt that Hong Kong had the potential to be developed in the next 10-15 years into a centre of financial, information and communication services and a location for key corporations. In comparison with other national economies, Hong Kong’s purchasing power was high. However, if compared with major cities, Hong Kong still had a long way to go as Hong Kong was only half the capacity of New York’s.

3.3 He commented that the standing of the services sectors would had a great impact as Hong Kong’s future and the government had to change its vision. Professional services were the heart of the economy. Hong Kong’s producer services was at a par with New York's.

3.4 One vision on information technology was to make Hong Kong into the highest value added city for regional corporations. This would require the most sophisticated services. Professor Enright cited a survey which indicated that 18% of respondents wished Hong Kong to become a regional technology and innovation centre, 40% a centre for commercial services, and 40% a global centre.

3.5 For Hong Kong to be developed into Asia’s world city, the depth, breath and quality of services had to be considered. Comparison should not be restricted to Tokyo and Singapore. Hong Kong should instead benchmark with the rest of the world. Professor Enright pointed out that Hong Kong’s professional services were rated behind Tokyo and Sydney, at a par with Singapore and far from the world-city standards such as those in Europe and USA.

3.6 On supporting and other related services, he felt that Hong Kong performed better than Singapore. He conceded that some outside multinational corporations however felt that Singapore was better.

3.7 Professor Enright felt that Hong Kong’s reputation on professional ethics was good. However, there was still much restrictive practice amongst professions and the way forward should be to open up and make Hong Kong the most open city. Professor Enright added that market would decide the winner and any barrier would keep out competent professionals from practising in Hong Kong.

3.8 On management consultancy services, Mr Griffiths commented that services in London was slow while quality of American consultants was not good. For Hong Kong, there were two tiers of products – practical and competent at one end and expensive and poor quality at the other. Professor Enright concurred that while Hong Kong could offer quality timely services at good price, the median product was not up to world standard. He agreed that some work by foreign companies parachuting into Hong Kong were of poor quality as they did not understand the local market well. Members felt that Hong Kong was more open than New York but New York had a pool of qualify professionals at reasonable prices.

3.9 It was suggested that HKCSI could organize a forum to discuss the issue amongst government agencies and TDC.

4.1 Dr Chan reported that based on the report of the study carried out by Professor Enright, the sub-group on management consultancy had decided to set up a Management Consultancy Association with Mr K K Yeung of K K Yeung Management Consultants Ltd as chairman of the steering committee.

4.2 Dr Chan told members that of the HK1.5 million funding from the SSF, $0.5 million had been allocated for the promotion of the sector. A series of efforts had been planned, such as:

• to promote the result of the study
• setting up of a homepage for the Management Consultancy Association
• education seminars to launch the Association - the first seminar was scheduled for late April in Hong Kong. The Secretary for Treasury had been approached to officiate at the ceremony. As the report had indicated that there was potential markets in southern China, the second seminar had been planned for May in Guangzhou.
• consideration for submitting a proposal to the services promotion strategy group, etc

The Chairman said it was important for the Association to be led by competent and respected leaders of the industry, and for its members to comprise the leading practitioners.

4.3 It was suggested that membership criteria be sent to Committee members before the launch.

5.1 Dr Chan reported that a study on the need of a business centre for small professional and industry bodies had been conducted by BSPU, MSA and HKCSI. The report had not been released as the three parties could not agree to the interpretation of the results in the report. Dr Chan elaborated that questionnaires to 200 associations were dispatched with 25 responding. MSA interpreted the non-responders as being not interested. Dr Chan however was of the view that some of the associations might have been interested but had not responded due to lack of manpower resources, or being unaware of the implications.

5.2 It was felt that the centre would be of help to the smaller associations which were not well staffed and would need facilities in the course of their development. It was believed that there was a need for a joint business centre for them which could provide centralized equipment, facilities or even secretariat.

5.3 On the Joint Professional Centre of the nine professional bodies, Mr Wong said that other than providing professionals a meeting point and conference facilities at very low cost for the nine professional bodies, the Joint Professional Centre also aimed to provide a one-stop shop for visitors.

5.4 The matter would be take up with BSPU later.

There being no other business, the meeting adjourned at 10:10 am.

Minutes of a meeting of the HKCSI Professional Services Committee held on Thursday, 30 April 1998 at 8:30am at the Chamber Boardroom.

Chairman: Mr Anthony Griffiths, GML Consulting Limited

Present:

	Mr Mike Allardice, Acceptor Corporation Limited
	Mr Jack Flader, Gemini Group
	Mr Bernard Hui, Hong Kong Institute of Architects
	Mr Eddie Lee, Hong Kong Institute of Surveyors
	Ms Linda Lee, International Assn of Business Communicators
	Mr Martin McMillan, Binnie Consultants Limited
	Mr Horace Wong, Hong Kong Institute of Company Secretaries
	Mr Louis L W Wong, Hong Kong Society of Accountants
	Mr Paul Woodward, Asian Strategies Limited
	Dr W K Chan, Secretary General, HKCSI
	Ms Charlotte Chow, Deputy Secretary, HKCSI

By invitation: Mr Thomas Wong, Hong Kong Securities Institute

Absent:

	Ms Christine Koo, Christine M Koo & Co
	Ms Phyllis Kwong Phyllis K Y Kwong & Company
	Mr M Lintern-Smith Law Society of Hong Kong

Apologies:

	Mr Michael Davis, Assn of Accredited Advertising Agents of HK
	Mr David Ho, Mastermind Executive Search Advisors Ltd
	Mr Niels Kraunsoe, Hong Kong Institution of Engineers, The

Out of town:

	Mr Alfred Chown, Executive Leasing Limited
	Mr Richard J Garrett, Association of Consulting Engineers
	Mr David John Rimmer, Rimmer & Company
	Mr Ian Robinson, Robinson Management Limited
	Mr John A Scott, Hong Kong Bar Association

The Chairman welcomed new member Ms Linda Lee representing the International Association of Business Communicators and guest Mr Thomas Wong, Chief Executive of the Hong Kong Securities Institute to the meeting.

1) Confirmation of Minutes

Minutes of the meeting held on 4 September 1997 were confirmed and signed.

　

2) Matters Arising

Dr Chan reported that a 10-member delegation from the State Planning Commission visited Hong Kong last October. A very successful seminar on the development of tertiary industries in China was organized during the visit. It was noted that service industries was high on the agenda of the national economic development of China. Dr Chan added that the recent re-structuring of the Mainland might result in a third of the jobs within the SPC being removed. However, the office of the tertiary industries should remain. The CSI would finalize a project schedule with SPC, now renamed State Development and Planning Commission, in due course.

3) Briefing on the Hong Kong Securities Institute

3.1 At the invitation of the Chairman, Mr Wong briefed members on the role of the Hong Kong Securities Institute. Set up in 1997, the Institute aimed to:

• raise the professional standard in the securities and investments industry;
• develop appropriate examinations;
• ensure provision of relevant and affordable training programmes;
• achieve international recognition; and
• contribute to maintaining HK’s position as a leading international finance centre

3.2 The membership base would be by invitation during the initial stage with a limit of 2,000 members up to the end of 1998. After which, membership would be subjected to passing examinations of the Institute. At present, 980 applications for membership were received, of which 642 were approved.

3.3 Membership profile: stock broking (54%), accounts and audits (13%), fund management (7%), corporate finance and finance (7%), banker (6%) and investment (5%). The Institute aimed to form different interest groups to cater for the needs of its members. The Institute is now the largest professional association in the industry. The Hong Kong Investment Analysts Association had decided to dissolve themselves and merge into the Institute.

3.4 The revenue of the Institute comes from membership fee, seminar and training fees, examinations and a start-up subsidy from the SFC during the first few years.

3.5 It was revealed that there is a Securities and Futures Institute in mainland China and China related matter is also on the long term agenda of the Institute.

3.6 According to Mr Wong, one of the challenges faced by the industry is the absence of an association to represent the interest of securities and investments personnel in Hong Kong. There are counterpart bodies in Australia and the United Kingdom. The Institute aimed to obtain reciprocal recognition of qualifications with them

3.7 The Institute has established a set of preliminary Code of Conduct. It would also collaborate with other bodies for organizing training courses and seminars. It is envisaged that without an accreditation scheme, quality control on training courses would not be easy.

4) Update on the Joint Professional Centre

4.1 Dr Chan told members that the Town Planning Board had requested the Land Development Corp to re-submit their proposal on the Joint Professional Centre on the make-up of the land use in the premises where the JPC was to be situated.

4.2 Dr Chan told members that the CSI was a major advocate for the setting up of a similar centre for smaller trade/professional associations. The CSI was working with the Business and Services Promotion Unit (BSPU) of the Financial Secretary’s Office for a feasibility study for such a centre to be set up and its usage. The Committee supported the concept in principle.

5) WTO – Progress Report

5.1 Dr Chan reported that CSIs worldwide were now preparing for the next round of negotiations. He had participated at a meeting in England the previous week to map out strategies for CSIs.

5.2 With the conclusion of the agreement on financial services, the current round of WTO negotiation had largely been completed. The next round would start in the year 2000. A set of guidelines on mutual recognition had been drafted for accountancy and the working group on professional services was still working on issues such as defining how domestic regulations should not be more burdensome than necessary.

5.3 Another area of concern was on regulatory convergence for professionals. The convenor of the working group on the issue was the deputy head of the office of WTO from Hong Kong, Mr Michael Stone. The deadline for negotiation would be July 1998. So far, only the accounting profession had been studied. However, accountants were disappointed at the trimming down of liberalization clauses. Although much of the discussions were substantive, they were not legally binding.

5.4 It was anticipated that the WTO would push for a universal coverage rather than a sectoral approach on professional services.

5.5 The Chairman told members that the Chamber, through participation in the Pacific Basin Economic Council (PBEC), was working on identifying barriers to trade by foreign countries and encouraged members to submit their experiences to the government through the secretariat.

6) Experience of Foreign Banks in China

The Chairman told members that a meeting with a representative of Standard Chartered Bank in mainland China was being arranged.

7) Study on Management Consultancy – Progress Report

7.1 Mr Woodward reported that the HKCSI submission to the Services Support Fund (SSF) for a HK$1.5 million project on a study of the management consultancy profession in Hong Kong was approved last year. After discussions with various tertiary institutions in Hong Kong, a team from the School of Business of the University of Hong Kong, headed by Professor Michael Enright was now working on the project. An interim report would be available shortly.

7.2 Mr Woodward was satisfied with the progress of the study. He commented that the dissemination of the findings of the study was also important.

8) Experience with other countries

The Chairman drew members' attention to the development of Hong Kong as an international professional centre. He encouraged members to submit their experience and encounters on treatment by foreign countries to the government through the Secretariat, before end May. Dr Chan added that at a seminar on the Competitiveness of Hong Kong, Dr Enright pointed out that what will be happening in Hong Kong would be a revolution on management rather than on technology.

There being no other business, the meeting adjourned at 9:50 am.

Secretary

Confirmed

Chairman

Minutes of a meeting of the HKCSI Professional Services Committee held on 4 September 1997 at 4:00pm at the Chamber Boardroom.

The Chairman welcomed Mr P.C. Lau, President of the Hong Kong Institute of Surveyors to the meeting.

1. Confirmation of Minutes

   Minutes of the meeting held on 18 February 1996 were confirmed and signed.

2. Joint Professional Centre

   2.1

   At the invitation of the Chairman, Mr P.C. Lau gave a brief introduction to the Joint Professional Centre being planned by nine professional bodies. The JPC will be established within the new Jubilee Street office redevelopment by the Land Development Corporation and Cheung Kong Holdings. The original idea was to have an area of 1,500 square meters but as part of the space had to be reserved for the District Board and other uses, the floor area has now been reduced to 900 square meters. The next step would be for the LDC to submit to the Town Planning Board for approval. In the meantime, a utilisation study had been conducted by Grant Thornton.

   　

   2.2

   The nine professional bodies are expecting the premises to be rented at nominal rent (say $1 annually) from the LDC. The fitting out costs including various offices, function rooms and a library would amount o some $10 million. Part of the cost was expected to be subsidised by the LDC. An application had been made to the Services Support Fund to finance the shortfall but due to insufficient funding within the SSF, the application had not been approved.

   　

   2.3

   The reason why the nine professional bodies were involved and not others, was mainly historical and based on expediency. The nine constituent bodies were different among themselves, for example some had their own offices while others did not. Some other professional bodies had also expressed an interest in being involved, such as teachers, landscape architects and nurses. Mr Lau enphasised that there was no intention to exclude others. He believed ultimately more organisations and professional bodies would be involved in the JPC.

   　

   2.4

   The JPC was not intended to provide the secretariat for the nine bodies which all had existing secretariats. The purpose of the JPC was as a coordination office to provide premises for the different professions to interact and for promotion of the professions.

   　

   2.5

   Members commented that the JPC appeared not to have a clear objective. There was a need to make a distinction between promoting the professional sector as learned societies or as trade associations, between promoting careers and business. The role of the JPC needed to be clarified in that connection. Without clear objectives on usage the JPC might find it difficult to break even nothwithstanding subsidised rent.

   　

   2.6

   The Chairman concluded that the CSI supported the idea but felt that it should be open to more professions to ensure credibility. The facilities could be used for promotion both to students and incoming visitors and as a centre for discussing common problems among the professions. Part of it could also be leased out to individual bodies, e.g. for running courses.

   　

   2.7

   Members agreed that the matter should be followed up in future with the nine professional bodies. The Chairman thanked Mr P.C. Lau's attendance.

   　

3. Management consultants group

   3.1

   The Chairman who is also a member of the Group reported that a $1.5 milliion funding had been approved by the Services Support Fund to conduct a project to promote the management consultancy sector. The project would include a study to be undertaken by an academic team from Baptist University, as well as a promotional programme.

   　

   3.2

   Two subcommittees had been set up by the Management Consultants Group, namely on strategy and on the academic study. The eventual aim would be to set up a professional body for management consultants to enhance capacity in the sector.

   　

4. World Trade Organisation

   Dr Chan reported that the WTO's Working Party on Professional Services had completed work on establishing guidelines on mutual recognition arrangements for accountancy. The Working Party would proceed to examine other sectors but probably not on a sector-by-sector basis.

5. Financial services professionals in China

   The Chairman said a joint meeting would be organised with the CSI Financial Services Committee to consider the experience of financial services professionals in China. The date and time would be advised in due course.

6. Agenda for the Committee

   The Chairman invited members to suggest to the Committee through the secretariat on what subject matters or problems of common interest should be considered by the Committee, and what support could the CSI provide to the professions.

7. China State Planning Commission

   The Chairman drew members' attention to a conference to be organised by the CSI and the Chamber during a visit by the State Planning Commission to Hong Kong scheduled for 22 October 1997. Members were encouraged to attend and to take part in other meetings arranged for the delegation.

There being no other business, the meeting adjourned at 5:15 pm.