The Stock Exchange of Hong Kong Limited (“Exchange”) has recently published its Consultation Conclusions on Review of the Corporate Governance Code (“Code”) and associated Listing Rules. The Code and Listing Rules amendments aim to promote the development of a higher level of corporate governance among listed issuers and bring Hong Kong in line with international best practices. They will come into force in 3 phases, starting on 1 January 2012.
Highlights to note are as follows:
New Listing Rules
- Independent non-executive directors (“INEDs”) must be at least 1/3 of the board by the end of 2012
- Company secretaries require 15 hours of professional training each financial year
- Remuneration committee required
- Publish constitutional documents (with English version) on website
- Publish procedures for election of directors
- Directors’ duties expanded and clarified
- Disclosure of chief executive’s remuneration
- Removal of 5% exemption from bar on directors voting where interested in resolution
- Shareholders’ approval required to appoint and remove an auditor
New Code Provisions (“CP”)
- Board to be responsible for corporate governance functions
- Disclosure of senior management remuneration by band
- Provision of monthly information to board members
- Auditor to attend AGMs
- Establishment of communication policy
- New section in Code on company secretary
Upgraded from Recommended Best Practices (“RBP”) to CP
- Directors’ attendance at board meetings to be disclosed
- Establishment of nomination committee
- Issuer to be responsible for arranging and funding directors’ training
- Roles and responsibilities of the chairman
- Separate shareholder resolution to retain INEDs beyond 9 years’ service
- Directors’ insurance
Further details of the proposals adopted appear below.
The text of the newly proposed Code and Listing Rules amendments may be found at the following link.
To read the Consultation Conclusions, please click here.
Click here to view the table/s.