Securities & Futures Commission of Hong Kong

Principles of responsible ownership

The Principles of Responsible Ownership (Principles) are a set of principles and guidance to assist investors to determine how best to meet their ownership responsibilities.

The Principles are non-binding and are voluntary. Investors are encouraged to adopt the Principles by disclosing to their stakeholders that they have done so, and then they either apply the Principles in their entirety and disclose how they have done so, or explain why aspects of the Principles do not, or cannot, apply to them. Investors who do not think that the Principles are relevant to or suitable for them at the outset are encouraged to provide their stakeholders with disclosure which clearly explains why the Principles have not been adopted and, if applicable, explain what alternative measures they have in place.

Investors should avoid stating that they have adopted the Principles but then disclose why each and every Principle does not apply to them. Similarly, where an investor decides not to have a policy on shareholder engagement, they cannot be said to have adopted the Principles. Instead, investors are encouraged to explain to their stakeholders why the Principles have not been adopted at the outset and, if applicable, explain what alternative measures they have in place.

Ownership of shares brings with it important responsibilities, particularly the right to speak and vote on matters that can influence the way in which a business is conducted. Owners of company equity should not blindly delegate these responsibilities. Even when they employ agents, directly or indirectly, to act on their behalf, owners should ensure that their ownership responsibilities are appropriately discharged by those agents.

Investors may choose to appoint external service providers to help them perform some of their shareholder engagement activities but they cannot delegate their responsibilities as shareholders to the service providers. In particular, investors remain responsible for ensuring those activities are carried out in a manner consistent with their own policies.

Click here for the Principles of responsible ownership.

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