Event Review | Amendments to the Listing of the HKEX

The seminar primarily focused on five major areas: board composition and effectiveness, independence and tenure, risk management and internal controls, dividend policies, and other amendments to the Listing Rules. During the webinar, Geroge and Anwin provided a detailed interpretation of the revisions and new regulations, highlighting key points as follows:

The HKEX introduces a Lead Independent Non-Executive Director to serve as a communication bridge between directors and shareholders as well as directors and directors, particularly addressing the challenge that minority shareholders face in accessing the board.

How to select a Lead INED?

Several factors, including the director's understanding of the issuer and interactions with the board, leadership skills, interpersonal skills, and diversity should be considered for selection of a lead INED.

All directors of listed companies must complete mandatory CPD on specified topics each year. For non-first-time directors, there is no minimum training hour requirement; the industry standard ranges from 10 to 20 hours annually. Generally, first-time directors must complete at least 24 hours of training within 18 months of their appointment. However, if a first-time director has served as a director of a listed company outside Hong Kong within the three years prior to their appointment, this requirement is reduced to 12 hours. Furthermore, listed companies are required to disclose in their annual reports the number of training hours completed by each director and the nature of the training received.

Issuers should conduct a formal evaluation of the board’s performance at least every two years.

The issuer is required to disclose a Board Skills Matrix within its Corporate Governance Report. This matrix must detail the current skills mix, expertise, and experience profile of the board as a whole.

The nomination committee must evaluate each director’s time commitment and contributions annually and disclose its evaluation, taking into account the director’s qualifications, experience, current directorships, and factors related to their personality, character, independence, and experience.

The Nomination Committee must include at least one director of a different gender. Listed company is required to establish and disclose a policy on diversity for both the board and all employees （including senior management). 

Additionally, the company must disclose in its annual report the gender ratios of (i) senior management and (ii) all employees separately.

Independent non-executive directors (INED) shall not hold directorships in more than six listed companies in Hong Kong. This must comply with the new regulations at the first annual general meeting held on or after 1 July 2028.

INED’s term limits are set at nine years. Transition arrangements are in two phases: at the first annual general meeting on or after 1 July 2028, the majority of INEDs on the board of directors must be those who have served for less than nine years; by the first annual general meeting on or after 1 July 2031, the board of directors shall not have any INEDs who have served for nine years or more.

The board is ultimately responsible for the issuer’s risk management and internal controls.

The board of directors shall conduct ongoing monitoring of the risk management and internal control systems, reviewing the effectiveness of these systems at least once a year and enhancing the disclosure of the review process and conclusions. The corporate governance report must include a board statement confirming that the board is responsible for the risk management and internal control systems; and that the systems remain appropriate and effective.

Issuers must disclose the key factors considered by the board when making dividend decisions and explain any absence of a dividend policy.

If no dividend is declared, reasons must be provided, along with measures intended to enhance shareholder returns (if any). If dividend decisions are subject to regulation, issuers are advised to disclose this.

Setting Record Dates for Shareholder Meetings to determine the eligibility of attendees and securities holders to vote/receive rights during shareholder meetings.

Requirements for providing monthly financial report to the Board.

Standardizing the requirements for the Nomination Committee, Audit Committee, and Remuneration Committee to ensure consistency.

Member of HKICPA

Director of Listed Company Secretarial Department

GIL