Policy Briefing — HKEX Corporate Governance Code Overhaul
Hong Kong Exchanges and Clearing published consultation conclusions on December 10, 2021, overhauling its Corporate Governance Code and Listing Rules to tighten board independence, diversity, and ESG oversight effective January 2022.
Executive briefing: On 10 December 2021 Hong Kong Exchanges and Clearing (HKEX) issued consultation conclusions on the Review of Corporate Governance Code and Related Listing Rules. The reforms, effective 1 January 2022, strengthen board independence, mandate board diversity targets, require ESG oversight disclosures, and elevate the role of company secretaries in sustaining governance frameworks.
Key changes
- Independent non-executive director tenure. Issuers must appoint a new independent director if all INEDs have served nine years or more, and re-election of long-serving INEDs requires separate resolutions.
- Diversity targets and reporting. Boards must set and disclose numerical targets or timelines for gender diversity and explain progress in annual reports; single-gender boards are prohibited from 2024.
- ESG governance disclosure. Board statements must describe how directors oversee ESG risks, align internal controls, and manage stakeholder engagement.
Implications for boards
- Hong Kong issuers. Nomination committees need succession plans that address tenure rotation, diversity targets, and ESG skills.
- Mainland Chinese SOEs. H-share issuers must coordinate with state asset regulators to refresh board composition while meeting HKEX diversity mandates.
- Global investors. Stewardship teams should update voting policies to reflect HKEX’s expectations on board refreshment and ESG oversight.
Action checklist
- Review board composition matrices to identify directors exceeding nine-year tenure and plan refreshment timelines.
- Define gender diversity targets, interim milestones, and board reporting dashboards.
- Update ESG governance disclosures and internal control narratives for the 2022 reporting cycle.
Post-consultation outcome
The revised Corporate Governance Code and Main Board Listing Rules took effect on 1 January 2022, embedding board diversity targets, succession planning, and ESG oversight expectations in Appendix 14 of the Listing Rules.
HKEX followed up on 14 December 2023 with climate-related disclosure conclusions, confirming IFRS S2-aligned reporting for financial years starting on or after 1 January 2025 and reinforcing audit committee oversight of scenario analysis and transition planning.
Sources
- HKEX consultation conclusions — Review of Corporate Governance Code
- HKEX news release on Corporate Governance Code enhancements
- Main Board Listing Rules — Appendix 14 Corporate Governance Code
- HKEX to implement enhanced climate-related disclosures
Zeph Tech guides issuers through HKEX governance diagnostics, diversity planning, and ESG disclosure upgrades aligned with the 2022 code.