In this year’s study, we have reviewed corporate governance matters relating to 483 Hang Seng Composite Index companies listed on the Stock Exchange of Hong Kong (“HKEx”). In addition to board effectiveness, diversity and composition, risk management and internal controls, whistleblowing policies, specific topics addressed span from environmental, social and governance reporting to IT controls and cybersecurity. For the first time, we have also scrutinised remuneration for board members of Hong Kong listed companies and to the recent hot topics surrounding many businesses such as financial and technology focused companies whose use of personal data must satisfy the ever increasingly stringent data privacy regulations.
Effective from 1 January 2017, the Stock Exchange of Hong Kong Limited’s new Environmental, Social and Governance (“ESG”) reporting requirement are about to enter the third year after regulatory amendments to the “comply or explain” provisions. This year, we continue to focus on how listed companies have responded to the upgrade of the KPIs in the“Environmental” Subject Area from recommended to “comply or explain” and more particularly on whether the style of ESG reporting are converging.

With the advancement in modern day microprocessor in terms of its size, processing power and the little in power that it consumes, the possibilities on the application of these technologies on businesses are endless. So this year, we have taken a more detailed look at the listed companies’ disclosure on how they leverage such technologies in their businesses. For example, artificial intelligence, cloud computing, blockchain and smartcontracts. Further, with the increase amount of personal data being collected, processed and retained by companies, this year’s report also takes a closer look at governance issues in the areas of data privacy.

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