HONG KONG, June 25, 2024 /PRNewswire/ -- The Hong Kong Chartered Governance Institute (HKCGI) (Institute) has released a survey report titled 'A Sustainability Governance Issue: Retirement Age & A Managed Process', drawing insights from approximately 1,300 respondents. The Hong Kong Census and Statistics Department forecasts a significant increase of around 90% in Hong Kong's senior population from 1.45 million to 2.74 million by 2047. The world's population is likewise ageing as people live longer and healthier.
Based on respondents' views, the report advocates for 65 and beyond (or 65+) as the preferred retirement age for Hong Kong organisations. That is, organisations could set a retirement age of 65 in line with the civil service and, depending on organisational needs, adopt a managed process for open and transparent discussions around one year before retirement for post-retirement full- or part-time extensions on mutually agreeable terms. Organisations will not take on additional risks as they can replace underperformers.
Key Findings and Recommendations
Retirement is a Sustainable Governance Issue. Under the United Nations Sustainable Development Goal 8, Hong Kong should promote full and productive employment for all, including senior workers. At the corporate governance level, succession planning requires a balance between retaining experienced employees and effectively integrating new talent.
Ms Edith Shih FCG(CS, CGP) HKFCG(CS, CGP)(PE), Honorary Adviser to Institute Council, Past International President, The Chartered Governance Institute and Institute Past President, as well as Executive Director and Company Secretary, CK Hutchison Holdings Limited, noted that: "As an executive of a multinational conglomerate with operations worldwide, and recognising the world population is ageing healthily, it is inevitable, because of the demography, that economies and organisations need to retain senior employees for sustainability of their economies and business operations respectively."
Mr David Simmonds FCG HKFCG, Institute President; Chief Strategy, Sustainability & Governance Officer, CLP Holdings Limited, agreed and added, "From the strategic business perspective, simply retiring employees because of their birth-day, that is reducing it to a number, is no longer sustainable. Rather, a more careful assessment of their contributions is required as part of succession planning."
Retirement Age of 65+. The survey results indicate a strong preference for allowing employees to work as long as they are capable, with 65 as the recommended retirement age, in line with the civil service, if one is needed (collectively 57% of the respondents). As noted above, organisations could adopt a retirement age of 65 and allow for a managed process for open and transparent discussions commencing around a year, or as the organisations deem fit, before scheduled retirement for post-retirement retention beyond 65.
Ms Shih added, "In some countries, forced retirement at a certain age is prohibited due to statutory provisions or anti-age discrimination laws, including the U.K., Canada, Australia, New Zealand, and the U.S. We function well in those economies. We also have no issue with a retirement age in some economies where it serves as a reset for considering the employment relationship with possible post-retirement extensions."
Mr Simmonds added, "It has been an easy solution to retire employees when they reach a certain age, but a holistic assessment of the employee's ongoing contribution will align more with business strategy and sustainable governance."
Enhanced Public-Private Partnership. The report also underscores the role of the HKSAR Government in enhancing programs to upskill employees for post-retirement roles, mirroring successful models such as Singapore's, which includes tax incentives and subsidies for ongoing education.
Click HERE to download the report.
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The Hong Kong Chartered Governance Institute (HKCGI), formerly known as The Hong Kong Institute of Chartered Secretaries (HKICS), is the only qualifying institution in the Chinese mainland and Hong Kong for the internationally recognised Chartered Secretary and Chartered Governance Professional qualifications.
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