Dec 19, 2024
All proposals to enhance the CG Code and related Listing Rules received majority support.
Finalised approach aims to balance need to progress governance regime with providing issuers with flexibility to make enhancements at appropriate pace.
The new requirements will come into effect on 1 July 2025 and apply to corporate governance reports and annual reports for financial years commencing on or after 1 July 2025, with transitional arrangements for the cap on “overboarding” and the cap on INED tenure.
Exchange will publish updated guidance in the first half of 2025 to assist issuers’ compliance with the new requirements.
To recap some of the most Controversial issues:
The designation of a lead INED (where the board chair is not independent) is modified to voluntary, with enhanced disclosures on shareholder engagement.
Phase one - compliance by the first AGM held on or after 1 July 2028 : Majority of INEDs on an issuer’s board must not be Long Serving INEDs.
Phase two - compliance by the first AGM held on or after 1 July 2031 : An issuer must not have any Long Serving INED on their board.
Cap on “overboarding” - INEDs must not concurrently hold more than six Hong Kong-listed issuer directorships, with a three-year transition period (i.e. compliance by the first AGM held on or after 1 July 2028).
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