In its recent circular, the Hong Kong Monetary Authority provided further guidance on the empowerment of independent non-executive directors (INEDs) in the banking industry in Hong Kong, following an industry consultation carried out in early 2016. The guidance examines, amongst other things:
- the role of INEDs;
- the expected practices of locally incorporated authorised institutions (HK-Incorporated AIs) with regard to INEDs; and
- proposed measures to be taken by HK-Incorporated AIs to ensure that there are sufficient suitably qualified people willing to serve as INEDs on the boards of HK-Incorporated AIs.
HK-Incorporated AIs are expected to implement the new measures by 14 December 2017. The detailed guidance covers the following six areas:
- Constituting the board and its committees
- Roles, qualities and time commitment
- Independence and tenure
- Board practices
- Training and development requirements
The circular is intended to regulate practices of HK-Incorporated AIs in relation to INEDs only, but some of the guidelines set out therein will serve as a helpful reference guide to AIs incorporated outside of Hong Kong.
Please click here to read our briefing on the key requirements set out in the circular.