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Exchange Publishes CG Code Consultation Conclusions and Guidance for Boards and Directors

27 Jul 2018
  • Proposed changes to CG Code and related Listing Rules receive strong support
  • Amendments to CG Code and related Listing Rules to take effect 1 January 2019
  • Exchange publishes “Guidance for Boards and Directors” to help directors to be more effective


The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), published today (Friday) conclusions from its consultation on its Corporate Governance Code (CG Code) and related Listing Rules (Consultation Conclusions on Review of the Corporate Governance Code and Related Listing Rules, or Consultation Conclusions)1 along with “Guidance for Boards and Directors”.

Consultation Conclusions

The Exchange received a total of 91 submissions2 from a broad range of respondents during the consultation period3The feedback indicated strong support for the proposals in the consultation paper and the Exchange has decided to implement new measures to:

  • strengthen the transparency and accountability of the board and/or nomination committee and election of directors, including Independent Non-Executive Directors (INEDs);
  • improve transparency of INEDs’ relationships with issuers;
  • enhance criteria for assessing independence of potential INED candidates;
  • promote board diversity, including gender diversity; and
  • require greater dividend policy transparency.

The new measures take effect on 1 January 2019 through amendments to CG Code and related Listing Rules.

Guidance for Boards and Directors

The Exchange also published today “Guidance for Boards and Directors” (Guidance) to help directors carry out their role more effectively.  The new publication contains practical advice to boards and directors on their roles and responsibilities.  It covers directors’ duties and board effectiveness, board committees, board diversity - including gender diversity - and corporate governance for weighted voting rights issuers.  There is also a section on the company secretary’s role and function, in particular when the role is outsourced to an external service provider.  In addition, the Guidance encourages successful listing applicants to appoint INEDs at least two months prior to listing. 

To supplement its Director Training Programme launched by way of webcasts, the Exchange will provide further training on directors’ duties this year by way of online training.

“We note the overwhelming market support for the Exchange to promote a higher level of corporate governance.  Amongst the issues discussed in the consultation, issues surrounding independent non-executive directors and board diversity, including gender diversity, attracted the most attention,” said David Graham, HKEX’s Head of Listing.

“INEDs play an increasingly important role in assuring investor confidence. The amended Rules will enhance the transparency of the INED appointment process and empower shareholders with more information about INED candidates, including their time commitments due to any current board responsibilities and their potential contribution, before shareholders’ voting at the annual general meeting,” Mr Graham said. 

“The principal objective of the Exchange’s Listing Rules on board diversity is to enhance the effectiveness of the board to achieve better corporate governance.  In connection with this, we continue to focus on diversity in its broadest sense.” Mr Graham said.  “By upgrading the ‘comply or explain’ provision to a Rule requiring issuers to have a diversity policy and to disclose the policy or a summary of the policy, we are enhancing the Rules considerably.”

The Consultation Conclusions and copies of respondents’ submissions, as well as the Guidance for Boards and Directors are available on the HKEX website.



  1. The consultation paper was published on 3 November 2017.
  2. Submissions were received from 91 respondents, of which some were identical in content.  Submissions with identical content were counted as one response in the quantitative analysis.
  3. The consultation period began on 3 November 2017 and ended on 8 December 2017.



Updated 12 Mar 2024