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International Restructuring Newswire
Welcome to the Q2 2025 edition of the Norton Rose Fulbright International Restructuring Newswire.
Publication | August 2018
On July 27, 2018, the Hong Kong Stock Exchange published the Consultation Conclusions on “Review of the Corporate Governance Code and Related Listing Rules” as well as “Guidance for Boards and Directors”.
The amendments to the Listing Rules will take effect from January 1, 2019.
Listed issuers must adopt a board diversity policy and disclose the diversity policy or a summary of the policy in their corporate governance reports (LR13.92 and A.5.6 Appendix 14 to the Listing Rules).
Listed issuers must disclose the nomination policy in their corporate governance reports (L(d)(ii) Appendix 14).
Listed issuers must disclose the dividend policy in the listed issuers’ annual reports (E.1.5 Appendix 14).
The circular regarding the appointment (including re-election) of INEDs should include the following information
Factors affecting independence of INEDs will be amended as follows
For a proposed INED who holds cross-directorships (that is, two or more directors sit on each other’s boards) or has significant links with other directors through involvements in other companies or bodies, a new recommended best practice under the corporate governance code will be adopted which requires the board to state its reasons for determining that such a proposed INED is considered independent (A.3.3 Appendix 14).
The cooling-off period for former partners of the listed issuers’ audit firms to serve as members of the listed issuers’ audit committees will be extended from one year to two years (C.3.2 Appendix 14).
The current wording of A.6.7 suggests that the directors of listed issuers must attend the listed issuers’ general meetings. A.6.7 will be revised to reflect the intention of A.6.7 – that is, generally the directors of listed issuers should attend general meetings. Note that attendance of directors at general meetings has to be disclosed in the listed issuers’ annual reports. In addition, under E.1.2, the chairman of the board and chairmen of the board committees should attend the listed issuers’ annual general meetings.
INEDs should meet the chairman of the listed issuer annually without the presence of other executive or non-executive directors (E.1.5 Appendix 14).
The guidance provides practical advice to the boards and directors of listed issuers covering, among other things, the roles and functions of executive directors, non-executive directors, INEDs, various board committees as well as company secretaries.
For a proposed director candidate, the guidance suggests that he should devote time to understand the listed issuer to ensure that he can make value-added contributions to the board after joining. After a new director joins the board, an induction training programme should be developed for the new joiner covering not only laws and regulations but also industry-specific and innovative changes.
The guidance also states that the right level of information should be provided by the management to the directors, which includes monthly financial updates. Failure in providing such monthly financial updates may be a reason for the late publication of profit warning or alert announcements resulting in disciplinary actions. The guidance also mentioned that, when facing disciplinary proceedings, it is not a defence for a director to claim that he has not received adequate information from the listed issuer. If you are a director of a listed issuer and have not received information such as monthly financial updates in the past, you should ask for it.
Publication
Welcome to the Q2 2025 edition of the Norton Rose Fulbright International Restructuring Newswire.
Publication
Another compliance deadline is approaching under the federal Pay Equity Act – federally regulated employers are required to file an annual statement with the Office of the Pay Equity Commissioner on or before June 30, 2025, if they posted a pay equity plan in the previous year.
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