10th Issue (Jun 1999)
Editorial
As professionals like accountants, engineers, doctors and the like have a specialised
knowledge which ordinary people do not have, they assume a social role which is laden with
a characteristic set of moral responsibilities. Over the years, the Hong Kong Ethics
Development Centre (HKEDC) has established good partnership with professional bodies such
as the Hong Kong Society of Accountants (HKSA) and the Hong Kong Institution of Engineers
(HKIE) in promoting professional ethics by way of joint seminars and publication. In this
issue we are glad to have HKSA and HKIE to share with us their experience in practising
ethics in their professions. The HKSA explains why accountants must adhere to a strict
code of conduct while the Senior Vice President of the HKIE tells what makes him turn down
a $200,000 offer from a contractor.
The Centre has been active in organising seminars for various trades to promote
professional ethics and ethical practices. Inside you will find the highlights of the
seminars for the construction industry, financial sector as well as small and medium
enterprises.
Since our putting on net in September 1997, over 4,000 visitors have visited our website.
You can find all our back issues of the Ethics in Practice
newsletter there.
 Professional Ethics
The Importance of Professional Ethics
Professionalism encompasses an expected high standard of behaviour. Failure to live up
to that expectation not only discredits one's professional status, but also undermines his
business potential. What distinguishes a profession from any other activities in a
community is that members of a profession commit themselves to ethics which earns them the
community's recognition and respect. Thus, professions formulate codes which bind their
members to a common professional goal. However, no community will see value in any
professional code unless the code resonates with the ethical value of the community.
Code of Professional Conduct
A code of professional conduct usually spells out the professional's obligation to the
profession, fellow members, his employer and clients, as well as the public. Generally it
sets out the rules governing:
- acceptance and solicitation of advantages;
- unethical solicitation of professional work;
- conflict of interest;
- handling and use of clients' confidential information;
- loans to or from clients;
- financial involvement with or in the affairs of clients; and
- breaches of code of conduct.
How Does the ICAC Assist To Promote and Maintain Professional Ethics?
Good ethical practice is the first line of defence against corruption. The promotion of
such practices in the private sector forms an important part of ICAC's corruption
prevention and education programmes. Our efforts in this area are affirmed in a paper
entitled Corporate Codes of Ethical Conduct - Recent Hong Kong Experience
by Dr. John Etheredge, Professor of the Hong Kong Baptist University, which states in the
conclusion about the impact of codes of conduct that "...there is very clear evidence
that, in certain situations or circumstances, the presence of codes of ethical conduct has
influenced the ethical standards or the recognition of moral parameters of managers in
Hong Kong companies,...these conclusions provide some justification and encouragement for
the efforts of the ICAC to persuade private sector organisations to develop and implement
codes of ethical conduct."
Besides having codes of conduct, we also need effective control systems to ensure all
lines of defence are set up. The HKEDC can assist you in formulating and reviewing codes
of conduct (Hotline : 2587 9812) while the Advisory Services Group, Corruption Prevention
Department ICAC which is akin to a management consultancy service, can advise you on
systems control. For free and confidential service, please call its Hotline at 2526 6363
or fax your request direct to 2521 8479.
 Ethics at Work
Professional Ethics of Accountants in Hong Kong
"As professionals, accountants must adhere to a strict code of conduct"
One of the distinguishing features of a profession is the adherence by its members to a
common code of values and conduct established by its administrative body, including
maintaining an outlook which is essentially objective. In addition, as membership of a
profession is usually restrictive and certain activities (such as statutory audit, for
example) are reserved to members of the profession, there must be acceptance of a general
duty to society as a whole.
There are, however, occasions where members' duty to their profession and to society as a
whole may seem to be in conflict with their immediate self interest or their duty of
loyalty of their employers. Because of these potential conflicts, it is necessary for
accounting bodies such as the Hong Kong Society of Accountants (HKSA) to lay down ethical
codes that set standards of conduct for professional accountants. The existence of a code,
as an objective benchmark of the standards which are expected of professional accountants,
helps to ensure the highest quality of performance and to maintain public confidence in
the profession.
The Ethics Committee of the HKSA
The Ethics Committee of the HKSA plays a key role in the promotion of professional ethics
of accountants in Hong Kong. The Ethics Committee, chaired by Mr. Mark Fong, presently
comprises 14 senior members of the profession, including one non-practising member and one
academic. One of the principal responsibilities of the Ethics Committee is
standard-setting, which involves the development of new ethical guidance and updating of
the HKSA's existing ethical Statements and Guidelines which must
be observed by HKSA members.
The Ethics Committee also provides interpretations of ethical Statements and
Guidelines, either in response to general enquiries or in response to
complaints about members' conduct.
The other major task of the Ethics Committee is seeking ways to enhance members' and the
public's knowledge and understanding of professional ethics of accountants. In addition to
participating in the HKSA's Continuing Professional Development seminars organized for
members and registered students, members of the Ethics Committee have participated as
speakers and group leaders at a number of seminars and conferences on topics of
professional ethics.
Occasional "Ethics Questions and Answers" features are
also published in the HKSA's Journal "Hong Kong Accountant".
Co-operation between the HKSA and the Hong Kong Ethics Development Centre
The Ethics Committee has been working very closely with the Hong Kong Ethics Development
Centre (HKEDC) in the last few years in promoting a high ethical standard in the
accountancy profession. The HKSA and the HKEDC have successfully co-organised four
seminars Achieve Excellence by Integrity: Corruption and Fraud Prevention
in 1995 and 1996, which were attended by over 800 practising accountants and finance
managers. It is planned that similar seminars will be organised later this year.
The HKSA and the HKEDC have also worked very closely together in the past three years in
the development and publication of the joint publication Ethics in Management
- A Practical Guide for Professional Accountants. The English version of the
joint publication was released in early 1998 and its Chinese translation was released
early this year.
It is hoped that the joint publication can provide practical guidance to readers,
particularly professional accountants on how to deal with ethical problems which may be
encountered in the workplace. Mr. Herbert Liang, M.B.E., the then Chairman of the Hong
Kong Ethics Development Advisory Committee, sums up the following in his Message in the
joint publication :
"In this joint publication, we aim to address the ethical issues encountered in the
accountancy profession and to provide an in-depth yet handy reference on how to handle
these issues properly and, at the same time, ethically. Parallel to these, professional
accountants are also reminded of their important roles in corruption and fraud prevention
which is part and parcel of ethical management.
Needless to say, in the promotion of ethics and corruption prevention, concerted effort
and support of members of the accountancy profession are essential."
Mr. Doug Oxley
Council Member and Member of the Ethics Committee
HKSA
Mr. Stephen Chan
Deputy Director of Professional Standards
HKSA
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Seminar on "Professionalism and
Ethics" for Engineers
The Centre jointly organised the seminar with the Hong Kong
Institution of Engineers (HKIE) on 12 December 1998. The response from our target
engineers was encouraging and the quota of 110 was reached in the first week of the
recruitment period. Ir Dr John Luk, the Senior Vice President of HKIE who is also the
Central Tender Board Chairman of Sun Hung Kai Properties Co. Ltd., and Dr Lily Chiang,
herself a professional engineer and a member of the Hong Kong Ethics Development Advisory
Committee, officiated at the seminar. Ir Dr Luk also discussed with the participants the
"Ethical Dilemmas in Workplace".
After this successful seminar, the HKIE has indicated interest in co-producing a practical
guide for engineers and suggested that joint activities with the HKEDC should be held
regularly to sustain the impact.
Highlights of Ir Dr John LUK's
Presentation
"What would you do if a contractor offers you HK$200,000 and asks you to turn a blind
eye to his sub-standard works in return? You may think that this is only a hypothetical
case. But the story is true, and it happened to me some years ago. Can you imagine how I
reacted to that offer? I said 'No'. To many other people I might look stupid. However, if
I did accept the offer, I cannot be speaking to you today."
Ir Dr John Luk, the Senior Vice President of the Hong Kong Institution of Engineers, told
the young engineers attending the seminar on Professionalism and Ethics on 12 December
1998 the temptations prevailing in the profession while he was at their age and what made
him turn down the handsome offer. When handling ethical dilemmas, his advice to the
participants was that one should have a set of moral rules and adhere to it firmly. With
reference to the engineering profession, Ir Dr Luk shared with his fellow members the
essence of the following guiding principles:
- not to get money unscrupulously;
- beware of temptations; and
- not to expose oneself to risks.
Corrupt practices in construction field would lead to poor quality of work which would
cause extra costs for remedial works and, worse still, endanger human life. In order not
to fall prey to corruption which would undermine the interests of oneself and all the
stakeholders concerned, Ir Dr Luk advised that the best policy was to take precautions.
The various preventive measures he introduced include the following:
- declaring conflict of interest situations;
- establishing effective system control through separation of powers, checks and balances
etc.;
- involving stakeholders and co-workers in decision-making to enhance transparency and
objectivity;
- observing the company code of conduct and refraining from having undesirable
relationships with business associates, such as gambling;
- implementing corporate ethics programmes; and
- try not to face temptation alone.
In his above case, Ir Dr Luk responded to the contractor that instead of buying Ir Dr
Luk off with $200,000, he should have invested his money in upholding the standards and
quality of his works. That would probably give him more business and profits while
maintaining a high moral standard too.
Ir Dr Luk encouraged the participants and their companies to join hands with the ICAC to
organise ethics programmes for their staff. Through seminars, staff should be made aware
of their corporate ethical standards and the legal requirements, so that they would be
more alive to corrupt practices and would not commit bribery unknowingly.
To conclude, Ir Dr Luk stressed that every individual should have a high standard of
integrity. He reiterated that being engineers, being professionals, they were laden with
the responsibility to build a clean and safe society. It would kill should there be monkey
business in the profession.
 About the Trade
Seminar jointly organized with the Hong Kong Construction Association
With the support of the Hong Kong Construction Association, an industry wide seminar
was held on 7 September 1998 to create an anti-corruption atmosphere within the
construction industry and to enhance the awareness of personnel in the field the
importance of an ethical culture. About 100 senior executives from more than 30 sizable
construction firms took part. Some participants later also joined a construction related
poster production focus group to contribute ideas on its design and marketing plan. Any
construction company interested in the poster or corruption prevention services for the
industry please call 2543 0000 for details.
Professional Ethics Programme for the Securities, Futures & Investments
Sectors
More than 200 financial leaders attended the Conference on Professional Ethics
for the Securities, Futures and Investments Sectors on 11 September 1998 to
discuss core issues of professional ethics and how they could be applied in day-to-day
management. The Conference was the first ethics seminar jointly organized by regulators,
financial institutions and professional bodies and it kicked off a two-year Professional
Ethics Programme. It includes the production of a practical guide for managers and a
training package for frontline workers as well as workshops and seminars for market
practitioners. Readers would be kept informed of the progress of the programme.
Seminar for Small and Medium Enterprises Conducting Cross-boundary Business
Is a Hong Kong businessman offering illegal commission to a company in Mainland China
bound by the local Prevention of Bribery Ordinance? What liabilities are there under the
law if businessmen offer gifts to Mainland officials to speed up approval procedures?
These are just a few of the many questions raised by the participants attending the
seminar jointly organised by the Hong Kong Ethics Development Centre and the Chinese
Manufacturers' Association of Hong Kong in September 1998.
Targeted at some 100 operators of small and medium enterprises, the seminar aimed to
enhance the knowledge of the participants who were mostly cross-boundary businessmen about
the anti-bribery laws in Hong Kong and the Mainland, the corruption loopholes and their
preventive measures. Participants showed much interest in the Mainland anti-bribery
legislation.
Bilingual CD-ROM Version of Legal Guide for Businessmen
A bilingual CD-ROM version of a legal guide, entitled Observing the Law: A Guide for
Businessmen in Guangdong and Hong Kong, jointly produced by the ICAC and the Guangdong
Provincial People's Procuratorate is now available. This guide provides practical advice
for investors in Hong Kong, Guangdong and other parts of the Mainland and also reminds
them of the need to observe the relevant legislation against corruption and bribery and
resolve their business disputes through legal means.
Please visit the ICAC website (http://www.icac.org.hk)
for the synopsis of the legal guide. Enquiries about the legal guide can be made on 2543
0000.
 EDC News
ICAC 25th Anniversary
To commemorate the 25th anniversary of the ICAC, an international conference entitled Fighting
Corruption into the 21st Century was held from 22 to 24 March 1999. More
than 700 local, Mainland and overseas delegates from 383 agencies in more than 50
jurisdictions participated in the Conference. They gathered together to explore
anti-corruption strategies to meet the challenges in law enforcement and administration in
the next millennium. Moreover, the ICAC has also produced a commemorative publication Fighting
Corruption - The Mission Continues which takes stock of the challenges that
Hong Kong has encountered in anti-corruption battle. This publication is now available for
public reading at Urban Council and Regional Council libraries. |