Hong Kong’s stock exchange, HKEX, is implementing changes to improve governance by limiting directorships to a maximum of six per person, with each tenure capped at nine years. The consultation period for this plan is open until August 16, with the new rules expected to be in place by January 2025. The goal is to reduce the concentration of board seats among corporate elites and ensure directors have the time and capacity to fulfill their responsibilities, especially independent non-executive directors (INEDs).
As part of Hong Kong’s efforts to enhance governance standards, HKEX is addressing concerns about overboarding among directors, with some individuals currently holding positions on multiple boards. The exchange’s chief executive, Bonnie Chan, acknowledges the need for continuous improvement in corporate governance.
One of Hong Kong’s busiest corporate figures, Abraham Shek Lai-him, serves as an INED in about 16 public companies. While he defends his ability to manage multiple responsibilities, the proposed changes by HKEX could impact individuals like Shek, who hold numerous directorships.
These changes align Hong Kong’s governance standards with other regional bourses, such as Singapore and Malaysia, which also impose limits on directorships and tenure to ensure effective board oversight.