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3. The EXCO changes are being proposed in the knowledge that the two most senior members of the Council, Sir Y K Kan and Sir Sidney Gordon, intend to retire next year, so that any other changes that may be desirable in the unofficial membership should be made this year or else be delayed for at least two years more.

4.

Complete lists of the membership of the two Councils are attached, together with brief personality notes on the outgoing and proposed new members.

5. Seen as a complete package, the Governor's proposals do have certain advantages:

6.

i.

ii.

iii.

They would bring into the Councils the Chairmen of two of Hong Kong's major commercial organisations, Jardines and the Hong Kong and Shanghai Bank, both of whom are

in any case outstanding candidates in their own right.

As the Governor has previously argued, there is a partic- ularly strong case for Mr Sandberg's appointment:in view of the Hong Kong and Shanghai Bank's special position in Hong Kong the Chinese would almost certainly regard it as

right and natural that its Chairman should be on EXCO.

The changes should result in an overall improvement in the quality of the Council.

The appointment of Mr Lobo would give the non-Chinese

minority communities a voice in the Councils for the first time for some years.

On the other hand, the package also has certain drawbacks:-

i.

Although the Governor is well aware of Ministers' concern to broaden the social base of the Councils, his proposals represent only a very slight move in that direction. Professor King and Mr So are at first sight improvements over the industrialist, Sir S Y Chung and the middle-class

Mrs Ko. Sir S Y Chung is however, a self-made man from a modest background and also one of the most progressive members of LEGCO, so there is little change.

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/ii.

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