Corporate Governance and Social Responsibility of Family Firms in Hong Kong: A Case Study of Hutchison Whampoa Limited (HWL)

Abstract

There are three broad research objectives that have been established for this cash study. First, it attempts to illustrate definitions of corporate governance and social responsibility so that owner-managers and corporate executives from family firms can understand the current conceptions, assumptions and presuppositions underpinning the emergence and growth of corporate governance and social responsibility in the business world. Second, it gives an overview of corporate governance and social responsibility of family firms in Hong Kong. Extant Literature has suggested that the current practices and developments of family firms in Hong Kong are considered to be behind other widely-held listed firms from the developed economies such as the US, Australia, and Europe. Third, it undertakes a single-case research on a family firm, Hutchison Whampoa Limited (HWL), in Hong Kong. It examines different environmental forces that prompt HWL to adopt different corporate governance and social responsibility strategies and tactics in order to meet various stakeholder interests. This study concurs with research findings from the extant literature that good practice in corporate governance and social responsibility is a 'must' to family firms if they intend to put themselves at a competitive advantage in and out of Asia. According to Malone and Steiner & Steiner, the corporation's reputation, integrity, sustainability, and responsibility cannot be fully attained without sound practice in corporate governance and social responsibility. This study dispels the widely-held belief that family firms cannot enhance standards of conduct and ethical business behaviour because they suffer from non-separation of ownership and management, dearth of professional management, and exploitation of minority shareholders. It is suggested that family firms with dominant shareholders can also adopt good practice in corporate governance and social responsibility while keeping their business prosper and family interest alive. Globalisation of trade and industry has been becoming a business reality due to convergence of technological and political forces. The corporate governance and social responsibility challenges faced by widely-held listed firms from the US have already pressurised family-owned corporations in Asia. Owner-managers and corporate executives from family firms in Hong Kong are therefore required to respond successfully to the challenges by gaining the experience from the developed economies and mustering their talent and courage required to make their firms not only to be profitable to their shareholders but also to do well by being good to their various stakeholders.