Hong Kong Stock Exchange will tighten Corporate Governance Requirements from 1 July 2025

Last Thursday (19 December 2024), the Hong Kong Stock Exchange ("Exchange") published the conclusions to its June 2024 consultation on “Review of Corporate Governance Code and Related Listing Rules”.

Whilst all the proposals will be adopted, the Exchange noted practical concerns raised in the market feedback on four proposals, where the views of the market are more diverged. The Exchange addresses these concerns by either scaling back the proposed requirements or delaying, extending or staggering their implementation to allow issuers more time and greater flexibility to plan their actions regarding those governance improvements.

The effective date of the new requirements, which was initially targeted to take effect from 1 January 2025, will be postponed by six months to 1 July 2025. This means calendar year-end companies will first report on the new requirements in their annual reports in 2027. The proposed transition periods and arrangements to phase out overboarding INEDs and long-serving INEDs have also been modified.