Hong Kong Exchanges and Clearing : Exchange Reports on its Review of Listed Issuers' Corporate Governance Practices Disclosure

Exchange Reports on its Review of Listed Issuers' Corporate Governance Practices Disclosure

The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) published the findings of its latest review of listed issuers' (issuers) corporate governance practices.

The Exchange reviewedthe corporate governance reports of 81 issuers with the financial year-end date of 30 June 2015 and analysed their compliance with the Corporate Governance Code and Corporate Governance Report (the Code) in its Listing Rules (Rules). This review, together with two earlier reviews (for issuers with financial year-end dates of 31 December 2014and 31 March 2015),examined a total of 1,636 issuers' corporate governance reports.

All three reviews were performed in the past year and they show that, whilst the issuers' compliance level with the Code was high, the quality of explanations given for deviating from Code Provisions was varied and reflected a degree of 'boilerplate' use.Furthermore, some issuers did not disclose board diversity policies and did not provide an explanation.

'The Exchange conducts periodic reviews of issuers' corporate governance reports and analyses their compliance with the Code'said David Graham, HKEX's Chief Regulatory Officer and Head of Listing.'These exercises are important because they update us on the issuers' overall corporate governance disclosure and help us formulate policy on corporate governance-related Rules. Issuersshould avoid the temptationof 'box-ticking'and instead provide well-considered reasonsfor non-compliance with Code Provisions in corporate governance reports.' For further information, please see the reportentitled 'Analysis of Corporate Governance Practice Disclosure in June Year-end 2015 Annual Reports 'inthe Issuer-related Information section of the HKEXnews website.

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