2015 Proxy Season Review: Hong Kong


  • Overall board independence in Hong Kong companies has significantly improved since Dec. 31, 2012, when public company boards were required to be at least one-third independent. More than 90 percent of the companies covered by ISS over the past three years comply with this provision.
  • In August 2014, the Hong Kong Exchanges and Clearing Ltd. (HKEx) published a concept paper on weighted voting rights to present the relevant issues and considerations with respect to multiple-class shareholding structures. The concept paper included a questionnaire to solicit public views on the viability of weighted voting rights structures on the Hong Kong stock exchange. In June 2015, HKEx published the consultation conclusions on the concept paper, paving way to a formal consultation process, which was dropped later in the year due to a lack of support from the ultimate watchdog – the Securities and Futures Commission.
  • Several listed companies have been the target of certain short sellers, who have published reports alleging irregularities in the financial statements of those companies. While the allegations have been denied by the companies, these short-seller reports raise concerns on the financial reporting practices of those issuers.
  • News about scandals and corruptions plagued a number of companies. Several executives and/or former executives of certain Hong Kong-listed companies have been investigated or charged for alleged misconducts. These events highlight governance risks at some of these issuers.

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