【Consultation】Corporate Governance Code & Related Listing Rules

Key proposals include:

(a) Corporate culture –  

1. Align company’s culture with its purpose, values and strategy; and     

2. require issuers to have anti-corruption and whistleblowing policies (New Code Provisions (CP), subject to a “comply or explain” basis).
   

(b) Board independence, refreshment and succession planning –  

1. Require issuers to have a policy to ensure independent views are available to the board, and annual review of its effectiveness (New CP).

2. Require independent shareholders’ approval for re-election of an independent non-executive director (INED) serving more than nine years (Long Serving INED) and additional disclosure (Revised CP).  

3. If all INEDs on the board are Long Serving INEDs, require appointment of a new INED at the forthcoming AGM, and disclose the length of tenure of the Long Serving INEDs on a named basis (New CP).     
   

4. Mandatory Nomination committee, chaired by an INED and comprising a majority of INEDs (Upgraded to a Listing Rule).
   

(c) Diversity –      

1. Single gender board is not considered to be a diverse board; 

2. mandatory numerical targets and timelines for achieving gender diversity at both board level and across the workforce (New Mandatory Disclosure Requirement (MDR) under the Code); and      

3. requirements for boards to review progress of diversity policy annually (New CP). After the revised Rules take effect, existing issuers with single gender boards will be allowed a three-year transition period to appoint at least one director of the absent gender on their boards. IPO applicants are not expected to have single gender boards.

(d) Communication with shareholders –    

Mandatory disclosure on shareholders communication policy, and annual review of its effectiveness (Upgraded to MDR).     

(e) ESG –     

    Align publication timeframe of ESG reports with annual reports (Revised Rule and ESG Guide).