Director training

Table: First time director minimum training hours
(A)	A director who is appointed as a director of an issuer listed on the Exchange for the first time (i.e. has no prior experience as a director of an issuer listed on the Exchange)	24 training hours within 18 months of appointment
(B)	A director who has not served as a director of an issuer listed on the Exchange within the three years prior to his / her appointment (i.e. whose previous directorship of an issuer listed on the Exchange does not fall within the three years prior to his / her appointment)	24 training hours within 18 months of appointment
(C)	A First-time Director (either type (A) or (B) above) with directorship experience in an issuer listed on other exchanges within the three years prior to his / her appointment	12 training hours within 18 months of appointment to a board of an issuer listed on the Exchange

Table: Illustration on mandatory director training requirement
	Count towards the 12 or 24 hours?	Count towards the mandatory annual training?
Training received as a director of an issuer listed on other exchanges *^{Note 2}*	✔	✔
Training received as a director of other Exchange listed issuers *^{Note 3}*	✔	✔
CPD training received as members of other organisations / professional associations *^{Note 4}*	✔	✔

Table: Directors’ Training by Topic
[Director A]	[•]	[•]	[•]	[•]	[•]	[•]
[Director B]	[•]	[•]	[•]	[•]	[•]	[•]
[Director B]	[•]	[•]	[•]	[•]	[•]	[•]

Annual director training

It is mandatory for all directors of issuers on the Exchange to undergo annual director training. The Exchange has specified five topics that annual director training must cover, as a minimum.
There are no specific requirements on the format and providers of the training – such flexibility ensures that training can be tailored to suit directors’ personal development needs as well as their schedules and the issuer’s available resources.
Director training can take various forms, including: in-person training; online webinars by an external provider; training arranged in-house by the issuer (e.g. through the company secretary); and reading articles or watching videos on the specified topics.
Director training must be of sufficient quality to adequately support directors’ development of their knowledge and expertise. The required disclosure of further details on the different modes of training that directors undertake (i.e. external, internal or self-study) enables investors to better understand and assess the training that directors have received.
Directors should consider the appropriate mode of training for each specified topic. While internal training may be more relevant or appropriate for certain industry or issuer-specific topics, training on topics such as the regulatory and legal responsibilities of boards and directors may be better delivered by external training providers.
While there is no mandatory minimum number of training hours for annual director training, directors should consider their personal training needs and receive sufficient training to equip them to properly discharge their duties. As a reference, the minimum training hours required for members of industry associations (e.g. The Hong Kong Institute of Directors or The Hong Kong Chartered Governance Institute) and professional bodies (e.g. The Hong Kong Institute of Certified Public Accountants and The Law Society of Hong Kong) range from 10 to 20 training hours per year.

First-time Director training

Specified training topics

Under the Listing Rules, mandatory director training, whether for existing directors or First-time Directors, has to cover the following five specified topics, as a minimum:
- Board and directors’ duties – to enable directors to better understand the board’s and directors’ roles and duties.
- Listing Rules and Hong Kong law compliance – to enable directors to procure the issuer’s Listing Rule compliance and to enhance their understanding of applicable laws in Hong Kong.
- Corporate governance and ESG – to refresh and expand directors’ understanding of such matters (including developments on sustainability and climate-related matters) corporate governance and ESG.
- Risk management and internal controls – to enhance directors’ understanding of the relevant scope and requirements for effective risk management and internal control systems, and the board’s responsibilities for the same.
- Industry and business updates – to enable directors to further their knowledge of industry and business updates relevant to the issuer that they serve.

Directors are expected to refresh their knowledge of key areas at reasonable intervals, for example, directors’ duties, notifiable and connected transactions, conflict of interests and the latest requirements under the Corporate Governance Code.
Directors are encouraged to engage in training beyond the scope of the specified topics as this may help them develop expertise in areas that the board may not currently possess. This demonstrates the board’s commitment to expanding its existing skills and qualifications.
The table below illustrates how certain types of training / experience may count towards the mandatory training requirements for First-time Directors and all directors:

Table: Illustration on mandatory director training requirement

Disclosure requirements

Together with the disclosure on the board’s existing qualifications and skills (please see the section on Board Skills Matrix), meaningful disclosure on the training undertaken by the board enables stakeholders to better understand the board’s ability to discharge its duties to support the issuer in achieving its long-term objectives.
Disclosure on director training should cover for each director:
- The total number of training hours completed during the reporting period.
- The nature of each training attended, including:
  - format (e.g. internal training, external training, self-study);
  - topic (to confirm that the specified training topics were covered);
  - duration; and
  - training providers (in particular, whether the training was delivered by a professional provider or in-house).
- Where the director is a First-time Director, an indication as to whether the director has completed the mandatory minimum training hours during the reporting period. Where the First-time Director has not yet completed the required training, the issuer should disclose the remaining number of training hours to be completed by the director in the next reporting period. Where the First-time Director has completed the required training, the issuer should include a statement confirming completion of such training.

There is no prescribed format of disclosure on director training. Issuers may refer to the table below for an illustrative example on how the relevant information may be disclosed. Issuers should include explanatory notes in their disclosure to enable a better interpretation of the training records of individual directors.

Table: Disclosure on Directors Training

Each director should provide the issuer with updates and supporting documents on the training that they attended during the reporting period. The issuer should put in place a system to record and retain that information to facilitate detailed and accurate disclosure on the director’s training record.