Board Composition and Administration

Board Composition & Diversity

The Board needs to have the right mix of individuals with expertise, experience and objectivity. A diverse board can provide strong and insightful governance and strengthen a company’s ability to manage challenges within the company and the industry.

Diversity, in the widest sense, refers to gender, race, sexual orientation and age; but also to background, knowledge, skills, opinions, experience and differences in ability.

The Exchange does not consider diversity to be achieved with a single gender board.

Please refer to Board Diversity & Inclusion in Focus for information on issuers’ board diversity.

Staying Informed

The Board has to stay informed about the issuer’s business (and that of the issuer’s subsidiaries), its financial performance and important functions such as risk management and internal controls.

Management has to provide the Board with sufficient information to enable proper discharge of their duties. Such information for the issuer and its subsidiaries includes:

Board papers and background information.
Plans and budgets for specific projects.
Forecasts and (monthly) financial updates.
Regular update of management’s risk management processes and internal controls.

Directors are entitled to and should seek further information from management if required, and seek assistance from the company secretary or external professional advisers.

Record Keeping

Comprehensive record-keeping is an indispensable part of good corporate governance. In addition to serving a legal need, given the statutory provisions that require businesses to keep records, good record keeping practices make commercial sense for listed issuers as it allows the management and directors to manage their business in an informed manner.

While directors should ensure an issuer has proper record keeping practices in place, it is also important that the directors themselves keep good records, in particular regarding their contributions and important correspondence with the issuer and its management. If a director solely relies on the issuer to keep all the records, then they may be exposed at an individual level if the issuer may not be able to produce records for example in response to an enquiry by the Exchange.

Professional Development & Training

Continuous training and professional development is important to the development and refreshment of directors’ knowledge and skills to enable their contribution to the Board to remain informed and relevant. This includes training and information on:

Updates in laws, regulations and the Listing Rules.
Directors’ duties and responsibilities.
Issuers’ and directors’ obligations under the Listing Rules.
Industry-specific and innovative changes.
Developments in risk management and internal controls.

The issuer should provide induction training for its new directors and continuous professional developments for the current directors, tailored to meet each director’s needs.

Our Guidance Materials

The Exchange has developed training and published comprehensive guidance materials on board effectiveness and topics such as directors’ duties. External resources provide additional guidance on these subjects.

Publication and Training
External Resources