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Responsibilities and Conduct of Directors

Updated: 11 Jan 2021

Every Director must always know his/her responsibilities and perform at his/her best conduct. Every Non-executive Director, regardless being a Government Appointed Director or an Elected Director has the same duties of care, skill and diligence, and fiduciary duties as the Executive Director.

  • Induction and continuing development
    • The provision of an appropriate induction programme for new Directors and ongoing training for existing Directors is a major contributor to the maintenance of high corporate governance standards in HKEX to ensure that Directors can effectively and efficiently perform their duties satisfactorily.
    • The Company Secretary is responsible for organising the induction for new Directors and monitoring the ongoing trainings of all Directors.
    • Comprehensive, formal and tailored induction programme is arranged for each new Director, which includes provision of a Director’s Handbook that contains all key guidelines and documents relevant to their roles, responsibilities and ongoing obligations; and a briefing on the Group’s structure, businesses, risk management and other governance practices by the senior management to help them familiarise with the management, business and governance policies and practices of the Group, and become as effective as possible in their new role as soon as possible.
    • To ensure that Directors’ contribution to the Board/committees remains relevant, ongoing trainings and updates are provided for Directors to regularly refresh their knowledge, skills and understanding of the business and markets in which the Group operates, including written reports to the Board and presentations by senior executives or external advisors on, among other things, the Group’s business, corporate governance, legal and regulatory developments.
    • Directors are encouraged to attend relevant external training sessions, seminars, forums and conferences, particularly on corporate ethics and integrity matters, risk management, the latest development or changes in statutes, relevant regulatory requirements and corporate governance practices, etc that are conducive to discharging their roles, functions and duties effectively. Related expenses are fully reimbursable by HKEX. All Directors should provide a record of the training they received to the Company on a semi-annually basis.
    • The Nomination and Governance Committee is mandated to review and monitor the Directors’ training and development.
  • Responsibilities of Directors

    Every Director must, in the performance of his/her duties as a Director –
    • at all times act not only in good faith and honesty, but also in HKEX’s best interests and promote HKEX’s success for all its shareholders as a whole by exercising independent judgement with reasonable care, skill and diligence, whilst having regard to, among other matters, the interests of employees, the fostering of business relationships with customers, suppliers and others, and the impact of the Group’s operations on the communities in which the business operates and the natural environment
    • take an active interest in the Group’s affairs, obtain a general understanding of its business and follow up anything untoward that comes to his/her attention
    • only exercise powers (such as the power to delegate) in accordance with the terms for which he/she is granted and for a proper purpose, and act in accordance with the Articles of Association
    • avoid a conflict of interest between his/her personal interests and his/her duties to HKEX including not accepting a benefit from a third party and declaring an interest, direct or indirect, in a proposed transaction or arrangement with HKEX
    • ensure that the Group complies fully with the relevant rules, regulations and laws
    • provide entrepreneurial leadership of HKEX, within a framework of prudent and effective controls which enables risk to be assessed and managed
    • approve HKEX’s strategic aims, ensure that the necessary financial and human resources are in place for HKEX to meet its objectives, and review the management’s performance
    • set HKEX’s values and standards, and ensure that HKEX’s obligations to its shareholders and others are understood and met
  • Responsibilities of Non-executive Directors

    While the Executive and Non-executive Directors are collectively accountable for the proper stewardship of the Group’s affairs and have fiduciary duties towards shareholders, their roles are strictly delineated. The Executive Director has direct responsibility for the Group’s business operations, the Non-executive Directors have a supervisory role in ensuring that a solid foundation for good corporate governance is provided to the Group and are required to –
    • constructively challenge and help develop proposals on strategies, and then fully empower and support the Executive Director to implement the strategies
    • scrutinise the management’s performance in meeting agreed goals and objectives, and monitor performance reporting, ensuring that individual business decisions conform to agreed strategies and policies
    • bring independent and external dimension as well as constructive and informed comments on the Group’s strategies, policies, performance, accountability, resources, key appointments and standards of conduct, through regular attendance and active participation in the Board/committee meetings
    • complement the skills and experience of the Executive Director, in particular through constructive probing based on review and analysis that brings to bear a wide range of skills, knowledge, experience and insight from other businesses and sectors
    • demonstrate the financial literacy required for a proper understanding of the Group’s activities and associated risks
    • satisfy themselves on the adequacy and integrity of financial and other reporting to the Board and shareholders and that the systems in place provide robust and effective financial, operational and compliance controls and risk management
    • determine remuneration strategy for the Group and appropriate levels of remuneration for the Executive Director and the senior management, and have a prime role in appointing and, where necessary, removing the Executive Director, and in succession planning for such position
    • take the lead where potential conflicts of interests arise regarding matters in which the specific interests of the management and the wider interests of the Group may at times diverge, for instance, the remuneration of senior executives and the selection of Board members
    • serve on the audit, remuneration, nomination and other governance committees, if invited
    • develop a balanced understanding of shareholders’ views through meeting shareholders at annual general meetings, as those views may provide different perspectives on the Group and its performance
  • Time commitment and external appointments
    • All Directors, in particular the Chairman and the Non-executive Directors, are expected to ensure that sufficient time and attention is allocated to HKEX to discharge their responsibilities effectively and, where possible, attend all Board/committee meetings and annual general meetings, and that other commitments do not affect the effectiveness of their contribution or the time available to HKEX. The major commitments of Non-executive Directors are detailed in their biographies.
    • All Directors are required to disclose to HKEX at the time of his/her appointment, and in a timely manner for any change, the number and nature of offices held in public companies or organisations and other significant commitments.  The identity of the public companies or organisations and an indication of the time involved should also be disclosed. Such changes will be updated in their biographies and disclosed in the annual and interim reports as appropriate.
    • The Nomination and Governance Committee regularly reviews the time required from a Director to perform his/her responsibilities to ensure that the Board’s effectiveness is not compromised. The Board believes, in principle, that Directors’ external appointments benefit HKEX by providing them with a diversity of skills, experience, knowledge and perspectives that are relevant to their roles at HKEX.
  • Guidance on conduct
    • HKEX is a public body listed in the Schedules to the Prevention of Bribery Ordinance (PBO) (Chapter 201 of the Laws of Hong Kong), and all its employees and the Independent Non-executive Directors are regarded as “public servants” for the purposes of Section 4 of the PBO. The Guidelines on Conduct in the Director’s Handbook and the Code of Conduct in Human Resources Manual (see HKEX Governing Principles in the Workplace) provide guidance to Directors and employees respectively in situations where advantages may be solicited, offered or accepted. It is the responsibility of each Director and employee to ensure that he/she complies with the PBO.
    • The Code of Conduct in Human Resources Manual (see HKEX Governing Principles in the Workplace) also sets the standard for HKEX’s commitment to working with integrity. Specifically, it provides guidance for all its employees on how to conduct their business activities, placing a priority on upholding a high ethical standard and establishing trust with stakeholders.
  • Conduct on securities dealings
    • HKEX has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (Model Code) as set out in Appendix 10 to the Listing Rules as its own code of conduct regarding Directors’ securities transactions. All Directors are obliged to observe the requirements stipulated in Part XIII, XIV and XV of the SFO (Chapter 571 of the Laws of Hong Kong) and the Model Code. The key provisions are summarised in the Director’s Handbook. Each Director has to confirm that whether he/she complies with the Model Code throughout each financial period.
    • All employees are obliged to strictly follow HKEX’s restrictions on dealing in securities, futures contracts and derivatives, which are on terms no less stringent than the Model Code, as set out in the Group Personal Account Dealing Policy.