20 June 2012

Chief executive retirement

A fondfarewellWinnie C. W. Cheung leaves the Institute after 22 years, eight of which were as chief executive and registrar. She looks back with George W. Russell at the profession’s many achievements during her tenure

W innie C.W. Cheung puts her In-stitute career down to destiny. It was a chance meeting with an old friend in Hong Kong that led her to the then Institute offices in Bel-

gian House and a stellar 22-year tenure as technical direc-tor, professional development director, senior director and, finally, the first chief executive and first female registrar.

In 1989, Cheung seemed settled in London. A young auditor, married with a toddler, Hong Kong was far away, the city of her childhood. She had already found primary and secondary school places for her son, who was then only two years old.

She was on the verge of a big change, but a traditional one for an accountant: leaving a major accounting firm for one of its clients. Cheung had begun her career at Ernst & Whinney in London, and was being wooed for a senior po-sition at Generali, the Italian insurance company.

Cheung had already been interviewed and expected the Generali board to approve her appointment. In the meantime she took time off to make her once-every-few-years visit to Hong Kong to see her parents. However, fate – and her reputation – intervened.

For two years, the Hong Kong Society of Accountants, as the Institute was then known, had sought a technical director. In Hong Kong, her friend told her about the open-ing. “I had no intention of looking for a job in Hong Kong,” she recalls. “I had a career in England and I had just done

Photography by Samantha Sin

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Chief executive retirement

an interview with a client.” However, her friend pressed her, saying this position would be a good fit. “I thought, ‘I’d never worked in Hong Kong and I’d never seen Asia. Why not give it a go?’”

Cheung typed up her resume, which hadn’t been updated since her university days, with her dad’s ancient typewriter. When the Society agreed to interview her, the omens were not good. She was pickpocketed near Central MTR station the day before. “I had no ID on me but they agreed to see me anyway.”

Louis Wong, then the registrar, had orga-nized a selection panel for another candidate the next day and after meeting with her for an afternoon, asked her to return for the in-terview with the panel, comprised of Marvin Cheung, now chairman of the Airport Au-thority, and former Institute presidents Eric Li and Selwyn Mar.

“I had a very enjoyable interview with them and afterwards, Louis called me to ask if I would accept the job. But I had to go back to England. I said send me the contract and I’ll see,” Cheung recalls. Winnie received the appointment contract from the Society when she returned to London after the holiday. “I decided to take the offer and the opportunity it offered to explore the city and the rest of Asia because I had left Hong Kong at a young age,” she explains. “Also, the contract term was two and a half years, and my son was only two years old at the time, so I thought I should go to see the other side of the world before set-tling down when my son started school.”

“Generali called to say welcome aboard. I said, ‘I’m sorry but I’ve got this job in Hong Kong.’”

Destiny callsCheung immediately realized she had made the right choice. “Once I got here, I’d never been so busy. The breadth of the job was tre-mendously interesting. I’d never have had this kind of experience if I’d stayed in Eng-land,” she says.

It was a very different office that Cheung joined in 1990. “We only had about 50 staff and 7,000 square feet of space at Belgian House,” she remembers. Her first challenge was to organize the department of which she had been put in charge, together with Nick Baldwin who also joined at the same time. “When we joined, the technical staff was – nobody. The technical department was non-existent for two years so two of us made a start from nothing.”

Moreover, there was a difficult financial

environment. The then colony had been in a re-cession since 1987, was reeling from a stock ex-change corruption scandal and had been buf-feted by the Tiananmen Square crackdown.

Given the circumstances, Hong Kong’s government was in a reformist mood and quickly sought out Cheung’s technical skills. She was first tasked with advising on the issue of B shares by mainland companies, which could be denominated in Hong Kong dollars and traded in Shenzhen. The shares were marketed in Hong Kong and the Companies Ordinance required a prospectus.

With the handover looming, China be-gan to occupy more space in the Society’s dealings. “There were a lot of activities with China,” she remembers. “There were three exchange rates: the black market rate, the of-ficial rate and the exchange shop rate. How do you account for this? And how do you consoli-date joint ventures – are they JVs or subsidiar-ies?” She had to draw up technical guidance on these issues which were unique with little reference that can be drawn from anywhere.

In 1991, Charles Lee, then stock exchange chairman, held talks with Premier Zhu Rongji, who decided that Hong Kong was the best place to raise funds for mainland enter-prises. “Why?” Cheung asks rhetorically. “Be-cause we have the accounting standards and legal system and professionals that overseas investors trust.”

She was invited to join the government team to advise on the accounting and au-diting framework for the introduction of H shares, shares of companies incorporated in mainland China that are traded on the Hong Kong stock exchange. Tsingtao Brewery Com-pany issued the first H shares in 1993. “Today we have over 650 mainland companies listed in Hong Kong,” says Cheung. “It was very in-teresting work to be part of the creation of the framework that brought these companies to Hong Kong to list. It was history.”

Cheung remained part of the fabric of Hong Kong history throughout the 1990s. As the liaison person between the Institute and LegCo, Cheung worked closely with the

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LegCo representatives Peter Wong and Eric Li, making many representations for the ac-counting profession before Hong Kong’s legislature. She continued to advise the government on a broad range of issues and found many of the proposals she submitted ended in government plans, including the MPF scheme, double taxation arrangements between Hong Kong and the mainland, and company and insolvency law reform.

Other matters ranged from the budget to the territory’s books themselves. “I re-member being invited in 1994 to advise on whether government accounts should be changed from cash basis to accrual basis,” says Cheung. “In the end we decided not to at the time, because 1997 was coming and if you suddenly changed the government’s account-ing there might have been suspicion about the British motives.”

By 1994, the technical department had grown so large it was split into three sections: standards, development and compliance. Cheung decided she would head develop-

ment herself. Baldwin left to join KPMG after his contract was up.

In her new role, Cheung focused on corpo-rate governance and technology. “Because I knew that in the next century, those would be the drivers for us.”

In 1992, the British government, alarmed at the number of companies going bankrupt, commissioned an inquiry headed by Sir Adrian Cadbury, which developed a code that aimed to raise the standards of corporate gov-ernance and financial reporting. “I read the Cadbury report,” says Cheung, who thought Hong Kong should pay attention.

Edward Chow, an Institute council mem-ber who went on to become president, asked Cheung to set up a corporate governance working group in 1995 to see how Hong Kong fared. “We produced our first corporate gov-ernance report with 19 recommendations for change. This I think must have been the first corporate governance report on Hong Kong. It received a lot of attention but also contro-versy on a number of its more forward think-

ing proposals,” she recalls. “Now everyone in town is involved in corporate governance in one form or another. You look back and there was nothing. Now it is the norm.”

Cheung created the Institute’s Best Corpo-rate Governance Disclosure Awards in 2000, which are still running and are considered the most prestigious out of a raft of awards.

As the end of the century approached in the late 1990s, the potential fallout from the millennium bug was worrying Hong Kong ac-countants. “We created the information tech-nology committee and interest group, which engaged in dialogue with organizations in the United States and Europe.” Driven largely by Cheung and her counterparts in the U.S., Canada, U.K. and France, the International Innovation Network, a group where many of the world’s accounting bodies work together to develop technology used by the profes-sion, was formed in San Francisco. “I hosted a meeting in Hong Kong over three days prior to that where the agreement of 16 bodies was gained to form the IIN. That was the begin-ning of my global relationship building with different cultures.”

A new eraBy 2002, Cheung felt her work at the Society was almost done. “In 2002, I was thinking of retiring, actually,” she reveals. “My son was going to university in England in a couple of years time and I was thinking I should be re-turning to the United Kingdom. At that time I was very interested in child psychology. I thought I could have another career. I would take leave to attend courses on how to talk to children – it helped me talk to adults too!”

At the same time, Cheung was forming a vision of how the Society could be reinvented. “When I qualified as a chartered accountant in England, it was one of the proudest mo-ments of my life. Chartered accountants were so respected in the U.K. community. When I came back to Hong Kong, respect for accoun-tants was not the same.” Cheung thought the root of the problem was the Society’s lack of its own qualification programme, its own brand and independence.

This, says Cheung, left the Society without a soul. “We didn’t produce our own product. We outsourced it through the ACCA exami-nation. That was something I carried in my heart for a long time.” Cheung was deter-mined to remake the image of accounting in Hong Kong. “We’d been talking about re-branding to CPA for a while.”

Although the Society’s qualification pro-

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gramme had been created in 1999, it had a low take-up. “The QP was crafted to cater for the 21st century,” says Cheung. “It’s not just a Q&A exam. You have to solve cases, present at workshops and people were not used to that.”

Students thought the QP was too hard and most opted for programmes perceived to be easier and which could still give automatic membership into the Society. “At that time, the Society recognized 14 overseas qualifica-tions unilaterally, so people could take any one of those exams to join us without doing our programme,” she says.

Then the registrar, Lee Kai-fat, announced he was leaving in December 2003. The Soci-ety began looking for his replacement and created a five-person selection panel. “Each of the panel members came to talk to me to see if I was interested,” Cheung recalls. “I remem-ber telling them there are plenty of excellent people out there. If you find somebody better than me, I’d be happy to serve under them.”

Cheung credits then President David Sun, chair of the selection panel, for convincing her to take the top job. “When after a period of search, I was asked again to consider going for the job by the head hunting firm. I said ‘I need to be called chief executive,’ a title the Society had not had before, and ‘I need to have this ability to be at the heart of policy-making.’ David went to council and got both of my requests granted.”

“I went home to my two children, Steven and Sara. Sara was 10 at the time; her brother five years older. I said to them, ‘If I take this job, I may have to work weekends and come home very late.’ My son said, ‘Don’t worry. If you want to do it, do it. I’m old enough and I can look after Sara.’ And my daughter said, ‘Yes, give Steven a chance.’ Two months later, my daughter said, ‘Mommy, can you give your job back?’” They of course settled on mum coming home earlier and Sara continued to enjoy her new freedom.

Her first year as chief executive – 2004– was a whirlwind. She had to shepherd through a private members’ bill that amend-ed the Institute’s name and members’ desig-nation, and enhanced independence in Insti-tute’s governance.

“Eric Li, our LegCo representative at the time, sponsored the bill. LegCo formed a com-mittee to review the bill and we only had a cou-ple of months until the LegCo went into recess in June 2004 to pass the bill, or else we’d have to start all over again when the new LegCo was formed. It was a challenge – the bill changed almost every section of the Professional Ac-

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Chief executive retirement

countants Ordinance. We didn’t know what the legislators would ask.” It was passed.

This was the second bill Cheung took to the LegCo on behalf of the profession. The first in 1997 was to allow CPA practices to incorporate and bring limited liability to the audit profession for the first time.

In September 2004, the Society became the Hong Kong Institute of CPAs. “We re-branded ourselves and what we produced was of such quality I think people were proud and glad. Why do we want to be in a profession? It’s the pride and the quality that it brings.”

Cheung redefined relationships and agree-ments with overseas accounting bodies that year. Cheung wrote to all 14 bodies to tell them the Institute would end its recognition of their qualification by June 2005.

That approach was rooted in a belief that the QP was as good – or superior – to any other programme. “Our QP was developed by lo-cal and overseas experts with the assistance of the Australian, New Zealand and Scottish chartered accountant bodies and put through very comprehensive market research and stakeholder consultation. We created a com-petency framework benchmarked against our QP. We set two conditions for recognition of any other qualification with overseas in-stitutes. One is that it had to be mutual. Two, the programme had to meet our competency benchmark. The assessment would be per-formed by an independent expert agreed by both sides. That was fair and reasonable.”

In the following years, she gained global recognition of the Hong Kong Institute of CPAs qualification by establishing mutual recogni-tion agreements with almost every one of the 14 bodies based on the Institute’s qualification standard. She also co-founded the Global Ac-counting Alliance with the most important ac-counting institutes around the world.

With the QP’s success came growth. In 2005, Cheung made the purchase for the In-stitute of the two floors in Wu Chung House, expanding space from 20,000 to 50,000 square feet to accommodate the increasing staff, students and members, and gaining a training and conference centre and lounge for member activities. “The value doubled in five years with a gain of HK$250 million.”

Cheung’s elevation to the chief executive’s job also put her back in the China spotlight. “I didn’t know Mandarin – I’ve had very few lessons. But Mandarin was learned by being forced to negotiate.”

Learning quickly, Cheung worked to de-velop closer ties between the professions in

Hong Kong and the mainland.“In 2004 we got CEPA and that was my

chance to negotiate a better deal than any-body else, such as mutual examination paper exemptions with the CICPA. We obtained four out of seven paper exemptions from the mainland CPA qualification exams.”

And she crafted the Institute’s policy in 2001 that led to Hong Kong’s convergence with IFRS in 2005 and at the same time, crafted the model for Hong Kong’s own SME financial reporting framework and stan-dards. She also later in 2006 and 2007 led the China and Hong Kong financial reporting and auditing standards convergence project that resulted in a joint declaration of conver-gence in December 2007. For the following three years, she attended every half yearly tripartite meeting between the International Accounting Standards Board, China’s Minis-

try of Finance and the Institute and published an annual convergence update each year. She believes China has embraced the internation-al financial reporting standards with clear commitment and sincerity.

“China is a developing country. It’s had a very short time to grow very quickly. It under-took to benchmark its rules and regulations with the rest of the world. You have to praise all the officials involved. I’ve worked with them closely and they put their whole heart in it.” Director General Liu Yuting at the Ministry of Finance led the project on the China side.

Cheung also fulfilled the Institute’s social responsibility by introducing the award win-ning May Moon children’s book series and the “Rich Kid, Poor Kid” community project to use the skills of accountants to teach young people about money.

“I am really proud of the May Moon sto-rybooks. It is an amazing way to reach chil-dren to teach them about money, and to teach them what it is that accountants do,” she says. “If we can reach just a few bright boys and

girls with our message about how great it is to be an accountant, those books will have done their job.”

CrossroadsOn the eve of Cheung’s departure, she gives these final words for the future. “We have built ourselves a very strong foundation. To sustain our growth, our brand name and in-fluence, we need to continue to evolve and to open doors, expand our geography as well as our service boundaries. The next five years is critical to secure an open rather than closed door policy for Hong Kong practitioners in China following the end of the Big Four joint ventures. Post qualified specialization and demand driven continuing professional de-velopment are key to our next generation in today’s knowledge and technology world. We need to expand our role in these areas. We need to take bold steps to face our challenges with a global mindset and China focus. We live in a global world, there will be increasing pressure on us to conform to global policies and regulations. We need to be bold to ask questions rather than blind copying. The con-flict between cross border regulation and na-tional boundaries remains an issue and needs our resolve. The Hong Kong Institute of CPAs is a public body serving 1 percent of our work-ing population with diversified interests and needs. This will be an increasing challenge with the added political environment we are in today. We need to be strong to lead the way.”

Cheung is sure she made the right decision by joining the Institute. “I really treasure the unique experience and satisfaction I had when going through all these challenging ventures,” she says. “The joy of working for the Institute in these 22 years was the chance of work-ing with the profession’s best and brightest people and in seeing the positive changes and advancements that we’ve been able to realize together for the Institute, the profession and Hong Kong. I’m proud of what we’ve achieved, especially the projects that have made a dif-ference.” She thanks everyone who has been with her on this journey. “There are too many to name them all but they know who they are. And I must thank my husband John for the freedom he gave me to pursue my goals.”

Since she’s realized the goals she set upon becoming chief executive, Cheung says it’s time for her to leave the Institute with the good memories. She says she’ll take a “gap year” to find out where her next journey will take her. “I am grateful for the past journey and happy to be embarking on a new one.”

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“The joy of working for the Institute in these 22 years was the chance of working with the profession’s best and brightest people.”