The Importance of in-house Legal Function

As the Chief Legal Officer & Company Secretary at Link REIT, could you provide an overview of your role and responsibilities within the company?

Being the Chief Legal Officer and Company Secretary, I oversee the Legal, Company Secretariat, Risk Governance and Compliance functions of Link REIT, the largest REIT in Asia. I advise the Board and keep it updated on regulatory and compliance issues and assist the CEO in communications with regulatory authorities and the Trustee of Link REIT.

Within the Legal function, I structured the team members into Group Level and Regional Centre Level so that the operation is scalable and sustainable. The Legal (Corporate and Investment) team on Group level handles all acquisition, disposal, capital market and financing deals. The Legal team in each of the three Regional Centres (namely Hong Kong, Mainland China and Overseas) handles all legal needs of the day-to-day operation of the business units in the respective jurisdictions (e.g. leasing, litigation, land issues, commercial contracts). I operate the Legal function of Link REIT like an internal law firm. Each Legal team operates independently but will collaborate on cross-team projects. Each Legal team is headed by a General Counsel who is like a Partner in a law firm and all Partners in this partnership share joint and several liability of the works of the larger Legal function. I act as the Managing Partner of this internal law firm. I set the direction and give guidance to the teams and review their works. I then report to the Board and the CEO on their behalf. I don’t believe in micro-management. I believe leaders don’t take care of results. Leaders empower and take care of people and people generate results. When you were made a leader, you were given the responsibility to inspire and bring out the best in others. I choose the right people, then trust them to deliver.

As the Company Secretary, I ensure Link’s Corporate Governance Framework is implemented as intended. The CG Framework enables responsible governance to not only transcend beyond complying with regulatory requirements but to become a value that is embedded with all that Link does. I advise Link’s Board on corporate governance issues such that Link follows the industry’s best practices. The Board has 12 members, 9 of whom are Independent Non-Executive Directors (INEDs) with various professional backgrounds. With a high independence weighting of 75% (which exceeds the independence guidelines under the Listing Rules), it brings constructive challenge and critical judgment on management proposals. My interpersonal skills support the Board members to communicate effectively especially when INEDs raise inquiries on recommendations made by Link’s management team. I also lead the Compliance team and the Company Secretariat to comply with periodic reporting and ensure corporate communications are conducted in compliance with the REIT Code and Listing Rules.

I oversee the Risk Management 360 Framework, which is devised to apply risk management practices such that Link achieves strategic objectives and ensures sustainability of the business. Risk registers are in place at corporate and regional centres to calibrate business risks, operational risks, financial risks, ESG risks, compliance and reputational risks according to severity of impact and probability of occurrence. The RM 360 Framework identifies and manages those main risks and the changes presented. I will coordinate internally such that the corresponding departments monitor those risks actively. For accountability, key risks are reported to the Senior Management on monthly basis and quarterly to the Audit and Risk Management Committee of the Board for review and on-going monitoring, I keep myself abreast of the developments and support the CEO when the Board discusses about them.

In your experience, what role does the legal department play in contributing to the overall strategic direction and decision-making within a multinational corporation?

The Legal team at Link REIT plays an instrumental role in supporting business counterparts to accomplish their strategic goals and venture new heights. A recent notable achievement of the Legal team was the successful completion of the second largest rights issue ever in Hong Kong (and the largest ever Asian rights issue in real estate sector) within four weeks and amidst the Chinese New Year holidays in 2023. Not only did the team need to negotiate the underwriting agreement with eight underwriters within the aggressive timetable, but it also needed to work with external counsels on a number of overseas legal opinions to cover offering to overseas unitholders and ensure compliance with overseas regulations. The Legal team collaborated with the internal Regulatory Compliance team, the Corporate Finance team and the Corporate Affairs team to seek clearance from the SFC, the HKEx and Link REIT’s Trustee and Registrar on the offering timetable and mechanism and the promotional materials. The Legal team also worked with the Company Secretariat team on (a) all disclosure documents including the regulatory announcements, offering circular and application forms to unitholders; (b) delivery of vast number of condition precedent documents under the underwriting agreement; and (c) filings to overseas regulators. Last but not least, as the Chief Legal Officer and Company Secretary, I helped to present the proposed rights issue to the Board of Directors and Finance and Investment Committee of the Board to seek their approval. The rights issue strengthened Link REIT's capital base and brought the net gearing ratio to below 20%. Most pertinently, it aligns with Link REIT’s objective of providing unitholders with stable distributions with the potential for sustainable growth in the present economic environment.

In your opinion, how has the role of the Chief Legal Officer evolved in recent years, particularly concerning the increasing emphasis on sustainability, ethics, and corporate social responsibility?

Being the Chief Legal Officer and Company Secretary of Link REIT, I oversee four corporate functions, namely Legal, Company Secretariat, Risk Governance and Compliance.  With the four award-winning teams respectively under my supervision, I am in the unique position to implement a cross-functional Governance, Risk and Compliance (GRC) strategy for Link REIT. GRC is at the heart of everything we do at Link. Encompassed in GRC, Governance defines the responsibilities of key stakeholders in decision making (such as the board of directors and senior management), Risk Governance identifies principal risks, evaluates them in the context of Link's strategic objectives and manages them within Link’s established risk appetite, and Compliance ensures that business activities comply with the respective regulations. Most organisations have practised these functions separately in the past. But at Link, GRC combines these functions in one integrated model to achieve strategic objectives and ensure sustainability of the business while managing risks, meeting all laws and regulations and translating into bottom-line financial benefits. By implementing a GRC strategy, Link can make better decisions in a risk-aware environment. The entire company comes together in its policies, decisions and actions. GRC is also a commitment to fostering a culture of integrity and ethical conduct, ensuring responsible governance that goes beyond mere legal compliance, which helps to enhance investor confidence and Link’s reputation. Last but not least, GRC identifies the participants and key controls which interact to ensure that the board of directors and senior management run the business of Link in the long-term interests of our Unitholders whilst also meeting the expectations of our other stakeholders.

What advice would you give to young professionals who are interested in pursuing a similar career, and what qualities do you think are essential for success in this field?

In-house counsels must integrate into the whole organisation instead of being silo. You are there to provide solutions not just raising problems or saying “no” when problem arises. There is no point in just identifying a risk without analysing that risk and providing mitigation solutions. In order to do that, a good in-house counsel must fully understand how the other integral parts of the business operate, maintain a good inter-personal relationship and develop a good commercial sense. You are the bridge to different functions within the organisation. Your role is to balance the view amongst different stakeholders and provide an aligned and risk-calculated solution. You need to understand how your internal clients think. If you do not possess the necessary professional knowledge in order to understand the needs or concern of other departments, find time to take courses to fill in the gaps. When you give a legal advice, be concise and conclusive. Don’t be long-winded or write long pages of reports. Lastly, it is not enough just to prepare watertight legal documentation or provide practical legal advice which should be treated as the minimum expectation. You need to be innovative and constantly thinking of ways to provide value-added contribution to the business. There has long been a general perception that in-house counsels are over-conservative (and not entrepreneurial) and in-house legal function is just a dispensable cost-centre and hence secondary to the finance, investment and business functions. I sincerely hope the younger generation of in-house counsels will help to rectify that perception.

BIO:

Kenneth Wong is a finance professional based in Hong Kong with a strong background in financial analysis, risk management, and strategic planning. With a proven track record in enhancing financial operations and driving business growth, Kenneth leverages his expertise to deliver innovative solutions and strategic insights, contributing to organizational success and financial excellence.