The Stock Exchange of Hong Kong Limited (“SEHK“) has amended its Listing Rules, including the Corporate Governance Code (“CG Code”), to enhance the corporate governance framework and promote good governance among issuers. The amendments follow a consultation period and the conclusions drawn in the published Consultation Conclusions.

The amendments emphasize the importance of good corporate governance as part of any Environmental, Social and Governance (ESG) program, among other things, and highlight the requirement for issuers to establish and maintain appropriate and effective risk management and internal control systems. Of note is that whistleblowing and anti-corruption (ABC) policies and systems is now a CG Code provision, rather than only a recommended best practice. It is important for all issuers – and those preparing to list – to ensure compliance with the amendments, most of which came into effect on 1 January 2022.

Key takeaways

The amendments cover a number of aspects of good corporate governance, including:

1. Establishing good corporate culture

• The board should ensure alignment between the company’s culture and its purpose, values and strategy. This includes acting with integrity, leading by example and instilling values of acting lawfully, ethically and responsibly.
• Issuers should implement a whistleblowing policy and system for employees and those who deal with the issuer (e.g., customers and suppliers) to raise concerns of impropriety, in confidence and...

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