On 19 December 2024, the Stock Exchange of Hong Kong Limited (the “Exchange”) published the consultation conclusions (“Conclusions”) on its review of the Corporate Governance Code (“CG Code”) and related listing rules.
The major modifications to the original proposals in the consultation paper of CG Code (for the summary please refer to our Capital Markets Update Issue 2024-03) are summarised as below:
- Designation of Lead INED: implemented as a recommended best practice
- Mandatory director training: reduced to 12 hours
- Independence of INEDs: modified to a phased implementation over a longer transition period
The revised CG Code and related Listing Rules will come into effect on 1 July 2025, and therefore apply to CG Reports and annual reports in respect of financial years commencing on or after 1 July 2025 with the provision of transitional arrangements for (i) the hard cap on overboarding independent non-executive director (“INEDs”) until 30 June 2028 following its 3-year transition period; and (ii) the hard cap on INED tenure until 30 June 2028 for the phase 1 and until 30 June 2031 for the phase 2 according to the phased implementation.
