THE CHINESE UNIVERSITY OF HONG KONG (AMENDMENT) BILL 2023
Deputy President, initially, I did not intend to speak on The Chinese University of Hong Kong (Amendment) Bill 2023 (“the Bill”). However, the recent spate of cases that occurred in different universities, including objectionable behaviour of students discovered in orientation camps, and the incidents on how the management of a university exercised its authority, have aroused public concern about the governance of universities. As I have been the secretary to the board of directors of a listed company for many years, I have deep feelings about good corporate governance, so I would like to express some of my views on the governance of universities here.
Theoretically, Deputy President, the governance of universities and that of listed companies is fundamentally different.
First of all, their ownerships and stakeholders are different. The ownership of a listed company belongs to the controlling shareholders and the public shareholders, and the main objective of the company is to maximize shareholders’ value by providing profits and dividends to them. The company needs to disclose information on its operation to investors, the regulators and the public, and many stakeholders are involved.
Universities, on the other hand, are non-profit-making organizations, and they are mainly funded by the public coffer, so does their ownership belong only to the universities themselves? Are the University Grants Committee, the Education Bureau, taxpayers or students who have the opportunity to study in the universities also stakeholders? In terms of objectives, universities should indeed focus on their academic standards and social responsibility, including providing high-quality education and making research achievements, instead of pursuing profits, as in the case of listed companies.
The second difference lies in the decision-making process, reporting and supervision. The decision-making process of a listed company is usually undertaken by its board of directors and senior management, and is subject to the influence of investors in the market. The company is required to make regular disclosure of its financial and business status, and is also subject to external supervision and auditing. Decisions of a university, on the other hand, are made primarily in the interest of its students, staff, the university itself and education, with the needs of the community and public interest also being taken into account, thereby ensuring professionalism and representativeness of its administrative and academic decisions. A university is not accountable to numerous regulatory and external auditing bodies, the reporting and supervision of it should focus more on the quality of its teaching and research, such as teaching evaluations, reviews by academic accreditation bodies and public comments on it.
On the surface, listed companies and universities are different in terms of governance, but in fact, I think they have some common points, i.e. both of them need to ensure transparency and have a high sense of accountability. In the day-to-day management of universities, it is particularly important to attach importance to academic freedom, social responsibility and public interest, for only in this way can universities ensure their long-term sustainable development and realization of social values.
Therefore, continuous attention should be given to the governance of The Chinese University of Hong Kong (“CUHK”) in the following areas:
Firstly, transparency and openness. A transparent and open governance system should be established to enable internal and external stakeholders to understand the administrative operations and decision-making process of the university. Transparency will help enhance public confidence in CUHK and establish a better reputation for the university.
Secondly, fairness in the decision-making process. In order to improve the quality of academic and administrative decision-making, it is essential that more external Council members should be involved in the governance process. This is also the reason why a listed company has to appoint a certain number of independent non-executive directors to scrutinize the operation of the company on behalf of the interests of minority shareholders, and these independent non-executive directors often take up the role of chairmen of important meetings, such as those of audit committees, remuneration committees, etc., so as to serve as gatekeepers in their capacity as independent persons. Similarly, it is also appropriate for universities to have more external independent persons to take up some important positions and play the role of gatekeepers.
Thirdly, responsibility for continuous improvement. The university should continually strive for excellence and establish effective evaluation and improvement mechanisms to ensure that governance and decision-making are optimized. Administrators at all levels should be held accountable for their actions and decisions, and subject to the necessary supervision and scrutiny.
According to the aforesaid principles, the private bill jointly introduced by the three Members of the Legislative Council, namely, Mr Tommy CHEUNG, Mr LAU Kwok-fan and Mr TANG Ka-piu, precisely meets the needs of CUHK. The Bill provides for the role of the Masters of additional Colleges, revises the methods of appointing members of the management of the university, and provides for the reorganization of the composition of the Council, that is, among others, changing the Council from one comprising 55 members to one with 34 members, all of which are important arrangements for enhancing the governance of the university; thus, I support the passage of the Bill and the relevant amendments.
I very much hope that this small step can help CUHK establish a good governance system, promote its academic and management development, and provide students and staff with a quality learning and working environment.
Deputy President, I so submit.