Hong Kong Securities and Futures Commission Chairman Andrew Sheng urged Hong Kong companies to pay enough attention to the forms of corporate governance.

Speaking at the Hong Kong Institute of Company Secretaries' Corporate Governance Conference 2004, Sheng said that good corporate governance adds value to the company; bad corporate governance subtracts value.

"Many Hong Kong companies are good at delivering value and performance, but may not have paid enough attention to the forms of corporate governance that is now demanded by global investors of world-class companies." Sheng said.

According to Sheng, there are more than 58 percent of Hong Kong's trading is dominated by institutional investors, and 39 percent by overseas investors, these investors do care about the form of corporate governance, i.e. compliance, as well as the substance, which is performance.

"It is important that one major element of corporate governance is not just about having an appropriate board structure and culture, and internal control processes, but also about managing a company's relationship with its stakeholders and providing transparency about how it goes about delivering performance through conformance." said Sheng.