Market Turnover


Exchange Publishes its Latest Review of Issuers’ Corporate Governance Practices and New INED Guide

17 Nov 2023

The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) published the findings of its latest review of issuers’ corporate governance practices (Review), and a new guide for independent non-executive directors (INEDs).

“At HKEX, we are committed to promoting high corporate governance standards among our issuers, helping to further elevate the Hong Kong securities market’s quality and attractiveness. We are especially pleased to see the positive changes that we are effecting on our market, such as the notable increase in board diversity with more female directors across our listed universe. Our recommendations in the latest Review and new INED guidance will provide practical guidance to listed issuer communities, as well as support INEDs in performing their crucial roles in driving good corporate governance culture,” said Katherine Ng, HKEX’s Head of Listing.

Review of issuers’ corporate governance practices

The Review provides guidance to issuers on the improvements they could make to their corporate governance (CG) practices. It focuses on the CG reports of 400 randomly selected issuers (Sample Issuers) for the 2022 financial year. It focuses, in particular, on compliance with the new requirements introduced to the Corporate Governance Code in 2022 (2022 Update).

Key findings and recommendations from the Review include:

  • Corporate culture – All Sample Issuers reported compliance with the new code provision (CP) on corporate culture. Comprehensive disclosure should include, amongst other matters, details on how corporate culture has been implemented and supports an issuer’s long-term business objectives.
  • Long-serving INEDs (INEDs who have served more than nine years) – The 2022 Update resulted in a substantial two-thirds reduction in the number of boards whose INEDs consisted of all Long-serving INEDs. Periodic board refreshment fosters sharing of diverse perspectives, and issuers should regularly assess their board composition in response to change (eg to their external business environment). Where a Long-serving INED is retained, sufficient details regarding that individual’s suitability for re-appointment should be disclosed.
  • Diversity – Since the 2022 Update, the percentage of single gender board issuers has dropped to around 21 per cent of all boards. A high level of compliance is observed for most diversity disclosure requirements. Issuers are encouraged to formulate long-term targets and timelines to further progress gender diversity on their boards, beyond the required minimum, and within their wider workforce. Existing single gender board issuers are reminded to appoint at least one director of a different gender by the deadline of 31 December 2024.

  • Risk management and internal controls – All Sample Issuers disclosed information on their risk management and internal controls. Regular monitoring and (at least) annual reviews of their systems are key to proper risk management. Issuers should provide sufficient details of the reviews they have conducted to support their findings that those systems remain effective.
  • We continue to observe an improvement in issuers’ compliance with the CPs under the CG Code:
    • All Sample Issuers complied with at least 73 out of 78 CPs, and 49 per cent of them fully complied with all CPs (2019 review: 41 per cent).
    • All CPs were met by a vast majority of the Sample Issuers (over 90 per cent), except the CP on the separation of the roles of chairman and chief executive.
  • Issuers must disclose all applicable mandatory disclosure requirements (MDRs) (including the sub-paragraphs of those MDRs) in their CG reports, and must clearly state that an MDR is not applicable to them, if they determine this to be the case.

For more details of the findings and our recommendations, please see the report titled “Analysis of 2022 Corporate Governance Practice Disclosure” available on the “Corporate Governance Practices” webpage and in the section headed “Review of Implementation of Corporate Governance Code” on the HKEX website.

New INED Guide

INEDs make important contributions to a company’s success and play a key oversight role in respect of the company’s risk management and internal controls. 

The new guide “A Snapshot of INEDs’ Roles and Responsibilities provides a quick and easy-to-follow overview of INEDs’ key responsibilities and obligations to facilitate a better understanding of what is expected of them and how they can fulfill their duties under the Listing Rules.

The guide is available on the Corporate Governance Practices webpage on the HKEX website.




About HKEX

Hong Kong Exchanges and Clearing Limited (HKEX) is a publicly-traded company (HKEX Stock Code:388) and one of the world’s leading global exchange groups, offering a range of equity, derivative, commodity, fixed income and other financial markets, products and services, including the London Metal Exchange.

As a superconnector and gateway between East and West, HKEX facilitates the two-way flow of capital, ideas and dialogue between China and the rest of the world, through its pioneering Connect schemes, increasingly diversified product ecosystem and its deep, liquid and international markets.

HKEX is a purpose-led organisation which, across its business and through the work of HKEX Foundation, seeks to connect, promote and progress its markets and the communities it supports for the prosperity of all.




Updated 17 Nov 2023