Independence of Directors
Updated: 31 Dec 2023
Independence is generally regarded as the key to fair and integrity. Given the unique nature of HKEX’s dual roles, the Independent Non-executive Directors (INEDs) serve the major purpose of striking a balance between public and corporate interests. In addition, due to the complexity and breadth of the financial markets in which it operates, INEDs with diverse backgrounds bring wider spectrum of experience and broader views to the Board.
Since its listing, HKEX has been steered by a Board comprised by a majority of INEDs. The Chief Executive is the only Executive Director on the Board.
All INEDs are expressly identified as such in all HKEX’s corporate communications that disclose the Directors’ names.
In assessing the independence of a Non-executive Director, the SFC takes into account the criteria affecting independence as set out in Rule 3.13 of the
Listing Rules
. Every INED is required to confirm to HKEX his/her independence upon his/her appointment as Director and to HKEX on an annual basis with reference to such criteria. Where an INED fails to meet any of such criteria, HKEX will disclose the reasons why such Director is still considered to be independent in the
annual reports
.
Each INED is also required to inform HKEX as soon as practicable if there is any change in his/her own personal particulars that may affect his/her independence. Moreover, each has to declare his/her past or present financial or other interests in the Group’s business, or his/her connection with any of HKEX’s connected persons (as defined in the
Listing Rules
), if any.
The
Nomination and Governance Committee
is mandated to assess annually the independence of all INEDs and to affirm if each of them satisfies the criteria of independence as set out in the Listing Rules and is free from any relationships and circumstances which are likely to affect, or could appear to affect, their independent judgement. Every Nomination and Governance Committee member abstains from assessing his/her own independence.
The Board adopts the underlying principles of the CG Code regarding tenure of the Board, and seeks to strike an appropriate balance between continuity of experience and refreshment.
The Board
Nomination Policy
sets a maximum tenure of nine consecutive years for the Non-executive Directors to be eligible for nomination by the Board to stand for re-election by shareholders.
An annual review is conducted to assessing the continuing independence of Non-executive Directors, with attention to ensuring that they remain independent in character and judgement, and continue to present an objective and constructive challenge to the assumptions and viewpoints presented by the management and the Board.
Where the Board proposes a resolution to elect an individual as an Independent Non-executive Director at the general meeting, it will set out in the circular to shareholders and/or explanatory statement accompanying the notice of the relevant general meeting why it believes he/she should be elected and the reasons why it considers him/her to be independent.