The readability of the information in CLP Holdings Limited (“CLP”)’s annual report, in terms of corporate governance (“CG”)-related disclosures and explanations of the business, was judged to be the highest amongst its peers. The judges noted CLP’s effective use of cross-references between its annual report, separate sustainability report, company website and other reports, and the innovative design of the annual report. Other highlights of CLP’s reporting include:
1. Presentation and scope:
- Comprehensive, well-structured information with reader-friendly colourful tables and charts
- QR codes to facilitate readers to access further information
- CLP continues to be a leader in CSR/ sustainability reporting, in an industry where this is inherently difficult to implement and execute
- The company is to be commended for moving towards , including participating in the IIRC’s pilot scheme.
2. CG reporting shows a clear commitment to high standards and continued improvement:
- The section on the CLP code on CG clearly informs readers of the company’s compliance with the CPs and RBPs of the CG Code, including a breakdown of the major respects in which CLP’s own code meets or exceeds the CPs. A clear explanation is given of the deviation from the RBP on quarterly financial reporting
- Disclosure of the continuing evolution of CLP’s CG practices in 2013
- Detailed disclosure of board structure and functioning and high attendance rate by directors
- Disclosure of findings of an independent evaluation of board’s and committees’ performance in 2012, with recommendations referred to the relevant parties for follow up. An independent evaluation is conducted every three years
- Clear and detailed descriptions of the terms of reference of, and work done by, board committees are on the website.
3. The sections of “How you can approach our Financial Statements” and “Accounting Mini-Series” use plain language to illustrate accounting concepts in a concise and simple manner, and provide good cross referencing to the accounting policies and explanations in the notes to the financial statements. Helpful explanation of how the company measures and recognises revenues.
4. Impressive and eye-catching risk management report:
- The company introduced a comprehensive risk management policy well in advance of HKSE’s consultation on risk management and internal control
- Clearly and systematically explains different kinds of inherent risk in each business activity. Enhancement to group-level risk management framework by reinforcing risk ownership, defining group-level risk criteria, etc., and assistance is given to business units to roll out their own frameworks
- CLP demonstrates its commitment to continued enhancement of its risk management framework and implementation in line with the industry best practices.
5. Comprehensive and transparent remuneration disclosures, including the basis of determining annual and long-term incentive schemes and the components of the remuneration packages of directors and senior management on a named basis.
6. Good communication with shareholders, including through the question and answer section, in which topics of interest to readers are raised and a discussion of the relationships with various stakeholders is clearly set out. The company welcomes feedback from stakeholders.
7. The company’s CSR/ sustainability reporting is commendable. It produces a separate sustainability report showing the company’s overall social, environment and ethical performance and stakeholder relations, in a succinct manner. The judges’ comments on this area of reporting are discussed in more detail on pages 48-49.