After five years of sustained organisational reform and strengthening, TDC's corporate foundations are now underpinned by:

• A sharpened focus around our core mission, capabilities and customers, including stronger identification with the needs of our core customers, Hong Kong SMEs.
  
• A proven capability to promote Hong Kong's service exports, which we took on in 1996, as well as manufactured exports.
  
• A more interactive and open planning process that invites greater participation by stakeholders, customers and employees at all levels, and strengthens our relevance as a demand-driven organisation.
  
• A commitment to sustainable corporate governance based on strong values and best practices, including performance measurement, accountability, transparency and a commitment to environmentally friendly practices. We benchmark ourselves against other leading trade promotion organisations.
  
• An organisational matrix of industries/sectors and markets that has increased our industry-specific knowledge, brought us closer to clients and sharpened our marketing skills.
  
• A modern, professional human resources framework built around open recruitment at market prices, an executive trainee programme to nurture and replenish talent from within, succession planning and a sound, fair process for occasionally managing out employees unable to move with the times.

We completed our first full cycle of the new annual planning process initiated by the Chairman. Under the banner "TDC Reports", we proactively engage stakeholders and the business community in a dialogue that provides a sounder basis for setting and explaining TDC's promotional priorities and budget. This interactive process also feeds off market inputs from TDC's global network and systematic analysis by our economists. The cycle begins, ends and begins again with extensive consultation, culminating each spring in publication of TDC's new Annual Plan. At critical points in the cycle, TDC reports back directly to stakeholders so they may see how we incorporate their ideas, and comment further. We also solicit their early input for the coming year's plan. This pattern of regular exchanges brings us closer to stakeholders.

With Government under pressure to review remuneration for top executives in statutory organisations, we took the initiative to brief the media on TDC's performance in this important area of corporate governance. Over the past five years, staff costs have averaged 31 per cent of total expenditure, outperforming the Council's internal guideline that caps staff costs at 35 per cent. Money spent on promotional activities has averaged 59 per cent of total expenditure, outperforming the internal Council guideline of no less than 50 per cent. Salaries have been de-linked from the civil service pay scale, with entry-level salaries determined by market forces. Automatic annual increments have been abolished. TDC salaries now have two components: basic pay, which is fixed, and discretionary performance-linked pay, which may be allocated to reward and encourage excellence. The Executive Director is totally accountable to the Council for his own performance, which is now reviewed twice a year by a special committee of Council members. To increase internal transparency, his self-appraisal to the committee is posted on TDC's Intranet for all employees to access.