The Securities and Futures Commission (SFC) today launched a three-month consultation on proposed Principles of Responsible Ownership which provide guidance for how investors should fulfil their ownership responsibilities in relation to their investment in a listed company.
The seven principles of responsible ownership ask investors:
- to establish and report to their stakeholders their policies for discharging their ownership responsibilities;
- to monitor and engage with their investee companies;
- to establish clear policies on when to escalate their engagement activities;
- to have clear policies on voting;
- to be willing to act collectively with other investors when appropriate;
- to report to their stakeholders on how they have discharged their ownership responsibilities; and
- when investing on behalf of clients, to have policies on managing conflicts of interests.
The principles, which are non-binding and voluntary, operate on a “comply-or-explain” basis (Note 1). The principles are relevant to individual and retail investors in that they provide general guidance on share ownership engagement, although some elements of the principles, such as reporting to stakeholders, do not expressly apply to individuals.
“Whilst the primary responsibility for a company’s success rests with the company’s board, investors in a company also play a significant role by holding the board to account for the fulfilment of its responsibilities,” said Mr Ashley Alder, the SFC’s Chief Executive Officer. “Recognising the importance of responsible ownership benefits the company, its investors and the economy as a whole,” he added.
The public is invited to submit their comments to the SFC on or before 2 June 2015. Written comments may be submitted via the SFC website (www.sfc.hk), by email toResponsibleOwnership@sfc.hk, by post or by fax to 2810 5385.
Note:
- Investors are encouraged to “sign up” to the principles and either disclose how they comply with the principles, or else explain why some or all of the principles do not, or cannot, apply.