Heightening its drive for gender diversity, the Hong Kong Stock Exchange (HKEx) has adopted a Listing Rules amendment insisting that ‘single gender’ boards are unacceptable.
All existing ‘single gender’ board issuers – accounting for 850 or 32.9% of the total – must appoint at least one director of a different gender by 31 December 2024.
The rule change is announced in the recent "Consultation Conclusions on Review of Corporate Governance Code & Related Listing Rules, and Housekeeping Rule Amendments", taking effect from 1 January 2022.
As discussed in our Legal Update of 23 April 2021, the consultation proposals were not without controversy.
However, while the proposal for boardroom gender diversity was adopted, HKEx recognised that setting of targets and timelines for achieving gender diversity at the workforce level may not be appropriate for all industries – so that proposal is now dropped. Instead, issuers are only required to disclose their workforce gender ratio, along with plans to achieve gender diversity at workforce level.
Another controversial proposal requiring independent shareholders' approval for re-election of a ‘long serving’ (i.e. having served on the board for more than nine years) independent non-executive director (INED) is also dropped.
Save for the above, the other consultation proposals - corporate culture, anti-corruption and whistleblowing policies, board independence and other board-related matters, diversity and others (see our Legal Update of 23 April 2021) - are adopted with only minor amendments.
Please visit our Eye on ESG blog for discussion on the Environmental, Social and Governance aspects of the consultation conclusions.