17
Audit Committee
Members have, and I believe quite rightly, attached great importance to the role of the Audit Committee. Some have suggested that the Committee should table a report in LegCo with the view of making the workings of the Airport Authority more transparent and more accountable to the public. While sympathetic to the spirit of this suggestion, in practice, it would be most exceptional for the deliberations of an Audit Committee of a body run along prudent commercial lines to be subject to this type of public scrutiny. It would, for example, make the Airport Authority subject to a quite different regime of corporate governance from that applicable to our two railway corporations, and other commercial organisations.
The Audit Committee will be a statutory committee appointed by the Airport Authority to perform, in addition to its statutory functions, such delegated functions relating to the financial affairs of the Authority or to assist the Board in overseeing matters of financial control, both internal and external, of the Authority. Clauses 31(2) and (3) of the Bill set out its relationship with the Authority, in effect the Board, to whom the Committee is broadly answerable. As a committee appointed by the Board, it will report to the Board which will then consider how best to respond to its advice. We feel that generally speaking the functioning of the Audit Committee should best follow corporate practice, as it evolves, and that it should not be required to table a report in LegCo.
It is also not considered appropriate for reports on the internal audit and value for money studies undertaken under the direction of the Audit Committee to be made public as these could well contain sensitive information, commercial or otherwise, the disclosure of which might jeopardise the effectiveness of the operation of the Committee and the Authority. However, given the interest of Members in the work of the Audit Committee, I will ask the Airport Authority, once it comes into being, to include in its Annual Report a section describing the work of the Audit Committee in the relevant year. Mixed views have been expressed as to whether Members of the Audit Committee should all be members of the Authority. Our views is that what is important is that the Audit Committee should be independent of the management of the Authority. Therefore, under Clause (31)(2b) of the Bill, neither the Chief Executive Officer nor any other employee of the Authority may be appointed as a member of the Audit Committee. The other consideration is to find the best person for the job. It should, in our view, be left to the Authority to decide on the composition of the Audit Committee and whether outside members should be appointed on to it,