Corporate Governance in Hong Kong Essay
1. Corporate Governance in Hong Kong
Hong Kong’s position as an international economic and financial center is attributed to its exemplary corporate governance. With Hong Kong’s various authorities and regulatory bodies emphasizing on transparency and accountability for listed companies, Hong Kong was ranked first for corporate governance among 11 Asian countries in 2007. (Refer to Appendix 1)
The Stock Exchange of Hong Kong (SEHK) describes corporate governance as the “duties, functions and power of the board of directors as a whole and executives and non-executive directors individually”. These binding responsibilities include the fulfillment of their legal obligations towards the …show more content…
In addition, family-dominated banks face the problem of reckless lending to connected parties. To minimize such lending, the power to regulate bank ownership structure was strengthened and restrictions on connected lending were implemented under the Banking Ordinance in 19863.
In its efforts to develop the “Code on Corporate Governance Practices”, SEHK takes into account the culture and history of a market. Since there is no single set of universal code that fits all economies, it is imperative that the code is market-oriented and adapts to the culture of Hong Kong.
5. Company Law
In Hong Kong, the duties and obligations on Directors and Officers are covered primarily by three sets of ordinances and rules:
1) Hong Kong Listing Rules 2) Securities and Futures Ordinance (“SFO”) 3) Companies Ordinance
5.1 Hong Kong Listing Rules
On March 31 2004, significant changes were made to the Hong Kong Listing Rules. This includes the updating of entry requirements for listing applicants and listed companies, as well as increasing guidance and requirements on directors and their independence. For instance, a listed company must have at least three independent directors. Disclosure of accounting matters must be qualitative and quantitative.
5.2 Securities and Future