More Corporate Governance Initiatives Needed
HONG KONG, June 7, 2011 /PRNewswire-Asia/ -- According to the 2011 Grant Thornton International Business Report, cost management and recruitment/ staff retention are key CSR drivers towards more ethical business practices for privately held businesses in Hong Kong and mainland China. The survey also found that not many Hong Kong and mainland Chinese companies report their CSR activities and there is therefore an opportunity for business to raise awareness in their activities in this area.
Just 36% of businesses globally are motivated to adopt more ethical business practices by a desire to "save the planet", down from 40% in 2008. On the other hand, businesses remain focused on the merits of CSR in terms of brand building, securing key staff and winning future contracts. Globally, 56% of businesses cite public attitudes/brand building and recruitment/retention of staff as the key drivers (alongside cost management) this year.
Cost management and recruitment/staff retention are key CSR drivers
The report identifies several drivers towards more ethical business practices, among which cost management has been cited by interviewees as the most important for businesses in Hong Kong (66%) and mainland China (77%), though the overall percentage of global businesses citing it as a key driver drops from 63% in 2008 to 56% in 2011. The second important driver for Hong Kong businesses is "recruitment/retention of staff" (59%), which is also the only driver that rises compared to 2008 results, and "public attitudes/building brand" (49%). These areas rank much higher than other factors such as "investor relations" (29%), "saving the planet" (27%), "tax relief" (27%) and "government pressure" (18%). (Table 1)
Daniel Lin, managing partner of Grant Thornton Jingdu Tianhua, says, "The figures show that cost management and retention of staff are the major concerns for Hong Kong businesses, especially now that the market is getting more competitive. In the report released by us in March, 88% of the Hong Kong businesses and 64% of Mainland businesses surveyed had plans to increase employee pay in the next 12 months because they were competing for talents. From our point of view, remuneration packages are no longer enough to attract and retain staff. Businesses should recognise the need to invest greater efforts in brand building through adopting more CSR initiatives."
Active in donation but not so in reporting
Regarding CSR initiatives, Hong Kong businesses are spending most efforts on "donating to community casues/charities" (69%), "improving energy efficiency" (67%) and "improving waste management" (66%) while mainland Chinese companies see "actively promoting workforce health and well being" (84%), "providing interships/apprenticeships/ work experience" (78%) and "changing products/services to reduce their environmental or social impact" (75%) as most important. (Table 2)
"Most Hong Kong businesses choose donation as a way to fulfill their social responsibilties," commented Daniel Lin. "Hong Kong businesses are generous and the focus on donation here is higher than gloabl average. Companies in Hong Kong focus more on financial and environmental impacts but pay relatively less attention to the well being of staff. However, this area is key to staff recruitment and retention, and taking a proactive approach helps employers stand out in the marketplace."
Hong Kong businesses do undertake a wide range of CSR initiatives. However, they are not very active in reporting their CSR efforts. Only 24% of Hong Kong businesses and 42% of mainland Chinese businesses interviewed in the survey report their CSR activities.
Need for greater corporate governance
"In April 2011, the Hong Kong Stock Exchange published public responses to the proposed changes to its Code on Corporate Governance Practices, which called for improving corporate governance standards and disclosure of listed companies. This is a step forward to move Hong Kong towards international standards of corporate governance and increase the overall risk management standards of listed companies. We hope that improvements in corporate governance of listed companies will have a positive impact on privately held businesses," added Daniel Lin.
"All businesses should look closely at the potential commercial benefits of reporting their CSR activity. A competitive advantage exists for those businesses which can demonstrate leadership in implementing socially responsible and transparent practices and seize the opportunity to attract and retain skilled workers, build brand value and secure future contracts with multinationals who frequently adopt strict CSR guidelines in selecting their suppliers."
Notes to editors:
Leading statistics
Table 1: Key drivers for businesses to implement more ethical business practices (%):
http://ketchum.com.hk/knprhk/Table_1(Eng).pdf
Table 2: Main initiatives undertaken by businesses in the past year (%):
http://ketchum.com.hk/knprhk/Table_2(Eng).pdf
About Grant Thornton International Business Report
The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of over 11,000 businesses per year across 39 economies. This unique survey draws upon 19 years of trend data for most European participants and nine years for many non-European economies. For more information visit www.internationalbusinessreport.com
Data collection
The research is carried out primarily by telephone interview lasting approximately 15 minutes with the exception of Japan (postal), Philippines and Armenia (face to face), mainland China and India (mixture of face-to-face and telephone) where cultural differences dictate a tailored approach. Telephone interviews enable Grant Thornton International to conduct the exact number of recommended interviews and to be certain that the most appropriate individuals are interviewed in an organisation which meets the profile criteria.
Data collection is managed by Grant Thornton International's core research partner - Experian Business Strategies. Questionnaires are translated into local languages with each participating country having the option to ask a small number of country specific questions in addition to the core questionnaire. Q1-2011 fieldwork took place in February 2011.
Sample
IBR is a survey of medium to large privately held businesses, researching the opinions of over 2,700 businesses globally each quarter, and over 11,000 per year.
In Q1 2011, the IBR Quarterly Economic Update data will consist of:
The target respondents are chief executive officers, managing directors, chairmen or other senior executives (title dependent on what is most appropriate for the individual country) from 39 economies primarily across five sectors: manufacturing (25 per cent), services (25 per cent), retail (15 per cent and construction (ten per cent) with the remaining 25 per cent spread across all sectors.
Locally, the sample tends to cover the sectors mentioned previously, with some countries being able to have local valid data for specific sectors or regions when the sample size is large enough.
About Grant Thornton Jingdu Tianhua
Grant Thornton Jingdu Tianhua is a member firm of Grant Thornton International Ltd (Grant Thornton International). The firm is fully integrated with Grant Thornton China and be part of a network of ten offices providing seamless access to 70 partners and over 1,500 professionals across mainland China and Hong Kong. For more information visit www.grantthornton.cn
Grant Thornton International is one of the world's leading organisations of independently owned and managed accounting and consulting firms. These firms provide assurance, tax and specialist business advice to privately held businesses and public interest entities. More than 2,600 partners provide clients with distinctive, high quality service in over 100 countries. For more information visit www.gti.org
Grant Thornton Jingdu Tianhua is a member firm of Grant Thornton International Ltd (Grant Thornton International). References to Grant Thornton are to Grant Thornton International or its member firms. Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered independently by the member firms.
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Further enquiries, please contact:
Daniel Lin
Grant Thornton Jingdu Tianhua
Tel: +852-3987-1300
Email: Daniel.Lin@cn.gt.com
Kitty Cheung
Grant Thornton Jingdu Tianhua
Tel: +852-3987-1222
Email: Kitty.Cheung@cn.gt.com
Sharon Fung
Ketchum Hong Kong
Tel: +852-3141-8082
Email: sharon.fung@knprhk.com