At least one-third of an issuer's board must consist of INEDs. While not part of the issuer’s management or the day-to-day operations, INEDs, together with the rest of the Board, are collectively responsible for the issuer’s management, operations and decision making. INEDs should proactively contribute to the development of the issuer’s strategy and policies through independent, constructive and informed comments and questions.  

To learn more on topics relevant to the INEDs' exercise of their roles and duties, please visit the relevant subpages of HKEX's Corporate Governance Practices portal:

• The role of the Board as the most important decision-making body of any issuer,
• The functions and roles of different board committees,
• Guidance on effective Board composition and administration, and
• A summary of directors' role and responsibility in risk management and internal controls.

All directors (executive directors (EDs), non-executive directors (NEDs) and independent non-executive directors (INEDs)) are subject to the same duties under the law and the Listing Rules.  In accordance with Listing Rule 3.08, INEDs and all directors must:

• Act honestly and in good faith in the interests of the issuer as a whole.
• Act for a proper purpose.
• Be answerable to the issuer for the application or misapplication of its assets.
• Avoid actual and potential conflicts of interest and duty.
• Disclose fully and fairly their interests in contracts with the issuer.
• Apply such degree of skill, care and diligence as may reasonably be expected of a person of their knowledge and experience and holding their office within the issuer.

INEDs (and NEDs) have the same duties of skill, care and diligence and fiduciary duties as EDs. Due to their independence and valuable professional expertise, INEDs fulfil important roles on the Board, including:

• Bringing independent judgement to bear in Board meetings on issues of strategy, policy, performance, accountability, resources, key appointments and standards of conduct.
• Taking the lead where potential conflicts of interests arise.
• Supervising risk management and internal controls.
• Serving on the audit, remuneration, nomination and other governance committees (if invited).
• Scrutinising the issuer’s performance in achieving agreed corporate goals and objectives, and monitoring performance reporting.

Maintaining a strong independent element on the Board is key to an effective board. The Board’s constitution and performance should be assessed periodically to ensure that the qualifications and skills of all directors remain in line with the evolving business and the INEDs retain their independence. An established system of Board refreshment can prevent entrenchment and attract new ideas and perspectives, ultimately contributing to Board diversity and the successful development of the issuer.

The length of the INEDs’ tenure is relevant to the determination of their independence. To promote Board refreshment and succession planning, the Rules require separate shareholders’ resolution and enhanced disclosures for re-appointment of an INED who has served more than nine years.  Where all INEDs of an issuer have served more than nine years, the issuer should disclose their length of tenure on a named basis in the papers for the annual general meeting, and appoint new INEDs at the next annual general meeting.  

The Exchange keeps track of INEDs who have served more than nine years, and relevant statistics can be found here.