Thursday, April 13, 2006
Hong Kong Stock Exchange Listing Rules on Independent Directors
In a recent article on the subject of independent directors in Hong Kong, Angela Wang & Co solicitors write about the Code of Corporate Governance Practices, which replaced the Code of Best Practices for Hong Kong listed companies. Listed companies that do not already comply with the Code must do so this year.
The Hong Kong listing standards require that every company have at least 3 independent, non-executive directors. One of these individuals must have accounting or financial expertise. Each company must also established an audit committee if it does not already have one.
The new Code lists several tests for whether a director is independent including, generally, stock ownership, positions with other entities that do business with the issuer and connections with company officers during the two years prior to appointment.