| The following guidelines are intended to form
the skeleton of a code of best practice to which listed issuers
should aim. The following items are not intended to be rules
which are to be rigidly adhered to. All issuers are encouraged
to devise their own codes of practice in the interests not only
of their independent non-executive directors, but of the board
of directors as a whole.
1. Full board meetings shall be held no less frequently than
every six months. “Full” board meetings means meetings at
which directors are physically present and not “paper” meetings
or meetings by circulation.
2. Except in emergencies an agenda and accompanying board
papers should be sent in full to all directors at least 2
days before the intended date of a board meeting (or such
other period as the board agrees).
3. Except in emergencies adequate notice should be given of
a board meeting to give all directors an opportunity to attend.
4. All directors, executive and non-executive, are entitled
to have access to board papers and materials. Where queries
are raised by non-executive directors, steps must be taken
to respond as promptly and fully as possible.
5. Full minutes shall be kept by a duly appointed secretary
of the meeting and such minutes shall be open for inspection
at any time in office hours on reasonable notice by any director.
6. The directors' fees and any other reimbursement or emolument
payable to an independent non-executive director shall be
disclosed in full in the annual report and accounts of the
issuer.
7. Non-executive directors should be appointed for a specific
term and that term should be disclosed in the annual report
and accounts of the issuer.
8. If, in respect of any matter discussed at a board meeting,
the independent non-executive directors hold views contrary
to those of the executive directors, the minutes should clearly
reflect this.
9. Arrangements shall be made in appropriate circumstances
to enable the independent non-executive directors of the board,
at their request, to seek separate professional advice at
the expense of the issuer.
10. Every non-executive director must ensure that he can give
sufficient time and attention to the affairs of the issuer
and should not accept the appointment if he cannot.
11. If a matter to be considered by the board involves a conflict
of interest for a substantial shareholder or a director, a
full board meeting should be held and the matter should not
be dealt with by circulation or by committee.
12. If an independent non-executive director resigns or is
removed from office, the Exchange should be notified of the
reasons why.
13. Every director on the board is required to keep abreast
of his responsibilities as a director of a listed issuer.
Newly appointed board members should receive an appropriate
briefing on the issuer’s affairs and be provided by the issuer’s
company secretary with relevant corporate governance materials
currently published by the Exchange on an ongoing basis.
14. This board should establish an audit committee with written
terms of reference which deal clearly with its authority and
duties. Amongst the committee’s principal duties should be
the review and supervision of the issuer'’ financial reporting
process and internal controls. For further guidance on establishing
an audit committee listed issuers may refer to “A Guide For
The Formation Of An Audit Committee” published by the Hong
Kong Society of Accountants in December 1997. Listed issuers
may adopt the terms of reference set out in that guide, except
that the committee may have a minimum of two members, or they
may adopt any other comparable terms of reference for the
implementation of audit committees. The committee should be
appointed from amongst the non-executive directors and a majority
of the non-executive directors should be independent
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