The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), published today (Thursday) its Consultation Conclusions on Board Diversity. The consultation found there is strong support for new measures to promote board diversity at the listed issuers, and the Exchange has decided to implement the new measures it proposed.
On 7 September 2012, the Exchange published a consultation paper to seek comments on its proposed amendments to the Corporate Governance Code and Corporate Governance Report (the Code) in the Exchange's Listing Rules. The proposed amendments included introducing a Code Provision – subject to "comply or explain"* – that the issuer should have a policy concerning diversity in the board, and should disclose the policy or a summary of the policy in its corporate governance report along with any measurable objectives for implementing the policy, and progress on achieving those objectives. The proposed changes also included adding a note under the Code Provision to clarify how the Exchange intended diversity to be understood.
The consultation period ended on 9 November 2012.
The Exchange received a total of 139 submissions from issuers, market practitioners, professional bodies and industry groups, non-governmental/non-profit-making organisations, institutional investors, individuals and others. The Exchange thanks the respondents for sharing their suggestions and views.
The consultation paper and consultation conclusions are available on the HKEx website along with copies of respondents' submissions.
The amendments to the Code will be effective on 1 September 2013. Frequently Asked Questions can be downloaded from the "Rules & Regulations - Rules and Guidance on Listing Matters - Interpretation" section of the HKEx website.
"We note the overwhelming market support for the Exchange to promote board diversity and to introduce measures in the Code. The amendments are not intended to prescribe particular corporate structures or to require compliance with hard and fast rules. The disclosure, or the explanation, is aimed at securing sufficient information so that investors and stakeholders can understand the company’s performance and governance practices, and act accordingly," said Mark Dickens, HKEx's Head of Listing.
||Every listed company must carefully review each code provision and, where it deviates from any of them, it must give considered reasons.