New governance rules considered in Hong Kong

Hong Kong Exchanges and Clearing has issued a consultation paper on proposed changes to its corporate governance code.

The holding company for Hong Kong's stock exchange has suggested increasing the number of independent non-executive directors and called for greater disclosure of time commitments by directors.

Under the new system, independent non-executives would have to constitute at least one-third of a listed company's board.

Other proposals include requiring firms to set up a remuneration committee with the chairman and majority of members as independent non-executives.

The original corporate governance code was introduced in January 2005 and should be updated to reflect changing market conditions, according to Hong Kong Exchanges.

Head of listing Mark Dickens described the consultation as "part of our ongoing initiative to promote the development of higher corporate governance standards".

A deadline of March 18th 2011 has been set for responses.

The Hong Kong Stock Exchange is the second largest bourse in Asia in terms of market capitalisation, behind Tokyo.