Hong Kong Exchanges and Clearing Limited published a consultation paper on proposed changes to the Corporate Governance Code and Corporate Governance Report (Code) concerning board diversity. The change involves a ‘comply or explain’ provision for all companies listed on its Exchange to have a policy on board diversity, and to report on this policy in their corporate governance and interim reports.
Under the proposals, the Code’s Principle for “Board Composition” will be revised to include “diversity of perspectives”. This is so that when the issuer reviews its board composition, in addition to examining whether it has a balance of skills, experience and independence, it should also consider the benefits of diversity.
The proposals include a new Code Provision (i.e. subject to “comply or explain”) stating that the nomination committee (or the board) should have a policy concerning diversity in the boardroom, and should disclose the policy or a summary of the policy in the corporate governance report. There will be a new Note to clarify what is meant by diversity.
It is also proposed that if the issuer has a policy concerning diversity, it should disclose any measurable objectives that it has set for implementing the policy, and progress on achieving the objectives.
Consultation Paper
http://www.hkex.com.hk/eng/newsconsul/mktconsul/Documents/cp201209.pdf
Questionaire re Diversity
http://www.hkex.com.hk/eng/newsconsul/mktconsul/Documents/cp201209q.doc
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