Following a move to create more gender-equal boards, January 2025 marks the beginning of a milestone year for companies listed in Hong Kong SAR, with single-gender boards no longer allowed on Hong Kong Exchanges and Clearing (HKEX) markets.
While the requirement has applied to new listing applicants since mid-2022, existing listed companies were given a three-year transition period to appoint at least one woman to their boards by the end of 2024. At the time of the 2022 announcement 40% of the approximately 2,650 HKEX-listed companies had all-male boards. According to HKEX data, that figure is now down to about 3%.
Of the 85 listed entities that failed to meet the 1 January compliance deadline, 12 had no women on their boards during the three-year transitional period, while the rest had women on their boards who later stepped down. In filings made to the Hong Kong stock exchange to explain the situation, the majority of non-compliant companies indicated they intend to appoint a woman to their boards within the next six months.
New listers
While critics have argued that companies must have the best mix of skills and experience on their boards, regardless of gender, senior HKEX executives emphasise that board diversity is critical to strong governance and brings more ideas and perspectives into boardroom discussions. The concept seems to have been accepted by new listed issuers given the increasing percentage of female directors appointed to their boards. According to HKEX data, that percentage rose from 17.2% in 2021 to 20.9% in 2024. In 2024, 20% of new listed issuers had 30% or more female directors.
The governance code amendments have received broad public support
With HKEX-listed companies looking to appoint more women to their boards, champions of women having a seat at the corporate table recommend businesses embrace a strategic approach to gender diversity that supports women through mentoring and training. They also advocate for female leaders to serve on external boards to strengthen their credentials and ultimately widen the pool of potential female board members.
Under a separate rule change proposal to apply from July 2025 to reduce the risk of ‘overboarding’, listing applicants will not be allowed to appoint as an independent non-executive director an individual who sits on six other boards. To provide a transitional period for existing issuers, their independents will need to adhere to the six-directorship ruling by the first annual general meeting held on or after 1 July 2028. HKEX also aims to cap the maximum tenure of independents at nine years.
Mandatory CPD
Requirements have also been introduced for mandatory director training. With effect from July 2025, directors of listed issuers have to participate in annual continuous professional development (CPD). CPD topics include updates on industry-specific developments, business trends and strategies relevant to the issuer, and corporate governance and ESG matters, including developments on sustainability or climate-related risks and opportunities relevant to the issuer and its business.
The latest amendments to the corporate governance code have received broad support from the public, according to HKEX. They represent a progressive stride towards promoting a high standard of corporate governance in keeping with Hong Kong’s status as a leading international listing and capital-raising centre.
