William Fung talks to James Chambers about his commitment to IR past and present
In December 2011, William Fung won the best IR by a CEO or president at the IR Magazine Greater China Awards.
This most recent award, his third individual prize during a quarter of a century as managing director of Hong Kong-listed Li & Fung, rounds off a year in which he stepped aside to become executive deputy chairman of the company set up by his grandfather in 1906. 
How would you describe your approach to investor relations?
First of all, I wear two hats: I am a shareholder because of the family shareholding and I am also an officer of the company as CEO. My first approach to IR is that I’ve got to be very clear about which hat I’m wearing.
Obviously, in terms of investor relations, I take off my own shareholder hat, because I don’t confuse the two positions. I look at myself as CEO of a publicly listed company. My obligation first and foremost is to the shareholders and then through them to the board of directors and then to me.
In terms of what shareholders or investors would want to know, it is usually twofold: firstly, an explanation of what has happened – the results that have been announced and anything else we have announced that is of importance. Secondly, and perhaps more importantly, they also want to know about the future of the company, so I see a very important role for the CEO in terms of IR, which I feel is often overlooked by other companies.
Many other companies I know would have their CFO deal with investors, but I think the CFO is probably most familiar with what has transpired already: the past. He can explain the results and why things have happened that way, but he is probably not as good as the CEO when it comes to explaining the vision for the company in the future.
Therefore, the CEO actually has an obligation in his position, besides managing the company, to also talk to the shareholders and investors about strategic aspects of the business, to share with them his vision of how he thinks the company will function in the future. That is very clear to me, and that is why I participate very actively in the IR arena.
Investors and analysts repeatedly praise you for your accessibility, transparency and directness, but does there come a point when they are taking up too much of your time?
The way I look at it, the company hired me to do a certain job. A big part of that is investor relations, but first and foremost my role is to run the company profitably and properly – so, other than that, I really try to make as much time as possible for investors.
Unless my duties require me to be with a customer or doing some business and making money for the company, I really spend a lot of time on investor relations. Investors are your employers and you had better spend time with them. What I do say ‘no’ to is if the questions they ask border on making forecasts – selective disclosure is a big concern for anyone working on the IR side.
Has the way you engage with investors today changed from when you first won the best CEO award in 2006?
Investors now want to meet more frequently. It is perhaps a function of the volatility of the times we are in. Change is accelerating: professional investors really have to deal with a lot of changes in the environment and volatility in the market. As a result, their need for information has grown.
Do you have a rough idea of how much time you spend per year with investors and analysts?
I would say 20 percent. In the last couple of years, I met or talked to about 300 investors a year on average. If I am free and someone wants to meet with me, I will say yes; my time is at the disposal of the firm. My priority in terms of investor relationships is very high.
What made you move to become executive deputy chairman and appoint Bruce Rockowitz as CEO?
Succession is something any good manager should be planning all the time. Someone like Bruce is really the next generation of top management. We’ve groomed a whole layer of senior management underneath him, as well, during my tenure. It’s time to give him the space to be the CEO.
On the other hand, I am remaining an executive because the company is much bigger, much more complex now, and there are certain aspects of IR and CSR that I am personally interested in us spending a lot of time on. These are things most CEOs would consider secondary, so I intend to help Bruce out on those matters for the next few years, at least.
Have you given him any advice about how he should approach IR?
It has been a long process – this succession was planned at least six years ago. Bruce would tell you nine! For the first three years I was showing him what I was doing and teaching him the ropes. In the last three years we have been doing things together as partners; it’s a matter of who is available.
If an investor wants a meeting and I’m not here, in the old days we might have tried to arrange it for when I was in town. Nowadays, they say they would rather meet Bruce. We’ve been double-teaming on the IR side for three years.
How will you be involved in meeting investors now?
The job is now so big at the executive level, as I said, that the chairman, especially the executive chairman, should be very involved in the IR function. I have my own view of the chairmanship of companies. Even non-executive chairmen should be cognizant with the direction of the company and its strategy.
You may not be involved with the day-to-day operations, but you should know enough to adequately answer an investor’s questions about the company strategy. In that respect, the chairman can’t just push the responsibility onto the CEO.
Another thing I will be doing is keeping an eye on what is happening with government relations and the way markets are changing. This is what Victor [Fung, William’s older brother and executive chairman of Li & Fung] used to do very well and I shall be taking over that function, making sure we don’t miss anything coming down the pipe that might benefit or be a detriment to us. That in itself is a full-time job nowadays.
Which achievement are you most proud of?
The biggest achievement, for both Victor and me, is that we evolved from a small family firm into a well-run, professional, public company. That is quite an achievement because family companies have had pretty bad press.
What we feel is that we have preserved some of the best parts of a family company, the fact that we are long term and our thinking spans generations rather than the short term. In addition, we have abolished things like nepotism.
That transition is a model for a lot of companies in Asia. Many firms evolve from a family business model, even in the West, and it is a transition to something where corporate compliance and governance is very important.
Are you looking forward to a time when you can hang up your executive hat, put on your shareholder hat full time and ask the CEO the difficult questions?
I do one thing at a time. It gets too distracting if you think too far ahead. Over the next three years I’ve got to learn how to be a good company chairman. My focus is on that. Even in that capacity, the investor relationship part is still going to be my main job.
