MTR launches new corporate strategic restructuring and reform report Ouyang Boquan: The Hong Kong government has never mentioned repurchase

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Author: Zheng Qiyuan

2021-03-05 08:00

Last update date: 2021-03-05 08:00

In recent years, the MTR has been plagued by scandals, including railway projects, train operations, and replacement of signal systems. Incidents have occurred one after another, which has raised doubts about corporate governance problems.

Ouyang Boquan, who has taken over the chairmanship of the MTR for two years, recently accepted an interview with many media such as "Hong Kong 01" and mentioned the new corporate strategy of reforming MTR. The focus includes the implementation of a new organizational structure and clarification of the powers and responsibilities of various departments. It also introduces a matrix management structure (Matrix Reporting), reforms the internal reporting arrangements of the MTR, strengthens the second line of defense, helps the management to grasp the problem early and minimize the risk.

Ouyang Boquan emphasized that it was not because of a certain incident in the MTR, or because the Hong Kong Government set up a railway department to strictly control the MTR and proposed a new strategy.

He pointed out that the MTR is bound to face more competitors in the future, and passengers, shareholders, and even regulators will also have more requirements on the MTR. "You need to make sure you are healthy before running a marathon." He hopes that within one to two years. Complete corporate reform.

When asked about the fact that the MTR had been questioned in recent years, it was "not doing business properly", and there were also opinions urging the Hong Kong government to buy back MTR.

Ouyang Boquan said that the directors of listed companies have the responsibility to find growth directions for the company. In past MTR board meetings, representatives of the Hong Kong government have not raised discussions about repurchasing the MTR.

MTR has just implemented a new management organization structure in phases last Monday (22nd).

The first phase of the reorganization includes arranging property and international business director Tang Zhihui, in addition to continuing to be responsible for the Hong Kong property business and Australian business, will also oversee the European business; and project and engineering development director Bao Lisheng will lead the newly established project and engineering development The business unit is responsible for supervising the delivery of company projects.

And Ma Lin, Director of Law and Governance, will lead the new legal and governance functions, as well as lead the new central procurement and supply chain team.

Ouyang Boquan pointed out that the purpose of the new structure is to clarify powers and responsibilities and strengthen the company's internal control and risk management system. We must do a good job."

He said that in the past, MTR, such as other large companies, may have unclear powers and responsibilities between departments. "Department A thinks that department B does it, and department B thinks that department A is responsible." The goal of the new structure is to minimize the ambiguity of powers and responsibilities. Problems make corporate culture progress.

He said that after the structural reform, the MTR will introduce a matrix management structure. Each department has both direct supervisors and technical supervisors to play the role of the second line of defense so that problems can be brought to the higher management level for discussion as soon as possible. Respond, "When the wave falls, the wave can be cut as soon as possible."

The MTR Chairman recently accepted interviews with media such as "Hong Kong 01":

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Hong Kong business is the main course of MTR

MTR’s new business development will be divided into three pillars, except for Hong Kong’s core business; Mainland China and international businesses will be the growth engines of the company; at the same time, MTR will also try to develop new businesses, such as research and development of data center business, and Start-ups discuss cooperation opportunities, etc.

"MTR takes Hong Kong as its home," Ouyang Boquan emphasized that Hong Kong business has always been the "main dish" of MTR.

In the future, apart from the development of the Tung Chung Line Extension, Tuen Mun South Extension Line, Northern Link Line and Kwu Tung Station as entrusted by the government, smart travel will continue to be developed, such as adding more new features to the MTR mobile app, "Thinking has stopped. Passengers are taken from one station to another, and the passengers start from the housing company and click to the destination."

He also pointed out that MTR’s current annual repair and maintenance expenditure has reached 9 billion yuan. In the future, it will continue to introduce intelligent maintenance technology and continue the "railway plus property" development model. He hopes that the development of the Siu Ho Wan Depot will be able to develop Such as the well-established community of "Lohas Park".

Although the development direction does not seem to be much different from the current one, Ouyang Boquan said that the difference between the new strategy lies in the implementation of the details.

He explained that apart from continuing to provide public transportation services, MTR must respond to the ever-increasing demands of passengers by driving fast and accurate, as well as safety. MTR, as a listed company, must also show investors that it has been making progress.

Denying "do not do business properly" to find a growth engine for the company's development

Regarding MTR’s overseas and mainland business being accused of "doing nothing in business", Ouyang Boquan emphasized that he has also heard the opinion that MTR should do a good job in the Hong Kong market. However, MTR is a listed company and must be accountable to investors at the same time. The bureau must look for growth directions for the company, believing that overseas and domestic businesses can be used as growth engines. "If 100% of the business spreads to Hong Kong, what's the point of growth? Hong Kong's own market is huge, and how many new customers will there be? ?"

As for whether the new corporate strategy can increase investor confidence, Ouyang Boquan said frankly, "I don't dare to guarantee", but he is confident that under the new strategy, the MTR can operate more smoothly and respond faster when encountering problems. Passengers provide better service.

He also pointed out that the scale of the MTR reform is relatively large. Based on past experience, I believe it will take 1 to 2 years to complete. "It takes time to make employees feel that new thinking can make the job better."

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Ouyang Boquan also pointed out that under the new strategy, MTR will put more emphasis on environmental, social and governance concepts (ESG), including more attention to emission reduction and social integration. In terms of emission reduction, such as MTR headquarters, Hung Hom MTR Academy Solar power panels have been installed on the roofs of the Light Rail and Light Rail; the design of new stations in the future will place more emphasis on greening. For example, large green roofs will be installed at Hin Keng Station on the Tuen Ma Line, and light-shielding panels made of environmentally friendly materials will be installed on the outer walls; the South Hong Kong Island Line will also have Renewable energy braking and trackside energy storage system.

In terms of social inclusion, it includes the addition of more elderly-friendly facilities, such as increasing entrance and exit signs at stations, adding more seats, and installing handrails in long passages.

Ouyang Boquan pointed out, "Don't ask me, you ask me to return to the government."

He said that although as a member of the MTR Board of Directors, whether shareholders intend to propose a repurchase is a matter of shareholders. As for the representatives of the Hong Kong Government on the MTR Board of Directors, they have never mentioned the Hong Kong Government in board meetings in the past. Discussion on repurchase of MTR.

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