Keywords: Hong Kong Exchanges and Clearing Limited, HKEx, Consultation Paper, corporate governance

Quick Read

On 7 September 2012, Hong Kong Exchanges and Clearing Limited (HKEx) published its "Consultation Paper - Board Diversity" (Consultation Paper) to set out the proposed amendments about board diversity to Appendix 14 (Corporate Governance Code (Code) and Corporate Governance Report) to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The major purposes of the proposed amendments are to promote effective decision-making and better governance and monitoring through diversity in the boardroom. It is proposed that diversity will be given a wide interpretation and no criteria will be prescribed to define its meaning. An issuer should take into account various factors to achieve boardroom diversity depending on its own business model and circumstances, including gender, age, cultural and educational background and professional experience.

Comments in response to the Consultation Paper should be submitted by 9 November 2012.

Major Proposals

The major proposals contained in the Consultation Paper are:

  • Including "diversity of perspectives" in the Code's Principle for "Board Composition" – Accordingly, the board should have a balance of skills, experience and diversity of perspectives appropriate to the requirements of the issuer's business.

  • Introducing a Code Provision to implement a diversity policy – Subject to the "comply" or "explain" principle (i.e., an issuer can choose either to comply or explain its non-compliance with the provision in the corporate governance report), the nomination committee (or the board) should have a policy concerning diversity in the boardroom. It should disclose the policy or a summary of the policy in the corporate governance report.

  • Disclosure in the corporate governance report – If the nomination committee (or the board) has a diversity policy, it should disclose the policy or a summary of the policy in the corporate governance report. It should also explain:

    any measurable objectives which it has set for implementing the policy; and

    the progress on achieving those objectives.

    You may download copies of the Consultation Paper via the link below:

    Visit us at

    Mayer Brown is a global legal services organization comprising legal practices that are separate entities (the Mayer Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; Mayer Brown JSM, a Hong Kong partnership, and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

    © Copyright 2012. The Mayer Brown Practices. All rights reserved.

    This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.