Non Executive Director Agreement Template for Hong Kong

A Non Executive Director Agreement is a legal document that formalizes the appointment of independent board members who provide strategic oversight without involvement in day-to-day operations. In Hong Kong, this agreement ensures compliance with the Companies Ordinance, Corporate Governance Code, and HKEX Listing Rules while establishing clear expectations for both the company and the appointed director.

When do you need this document?

You need this agreement when appointing independent directors to strengthen your board's governance structure. Listed companies on the Hong Kong Stock Exchange must have at least one-third independent non-executive directors, making this document essential for regulatory compliance. Private companies also use these agreements to demonstrate good governance practices, particularly when seeking investment or preparing for potential listing. The document becomes crucial during corporate restructuring, when establishing audit or remuneration committees, or when enhancing board diversity and expertise to meet evolving business needs.

Key legal considerations

The agreement must clearly define the director's independence criteria under HKEX rules, including restrictions on business relationships, shareholdings, and family connections that could compromise independence. Time commitment clauses should specify minimum meeting attendance requirements and availability expectations for urgent matters. Remuneration provisions must comply with disclosure requirements under the Securities and Futures Ordinance, while confidentiality clauses must balance director duties with transparency obligations. The document should address potential conflicts of interest, establish clear termination procedures, and include appropriate indemnity provisions while ensuring compliance with statutory director duties under the Companies Ordinance.

Legal requirements in Hong Kong

Under Hong Kong law, the agreement must comply with the Companies Ordinance's director qualification requirements and statutory duties, including duties of care, skill, and diligence. Listed companies must ensure the appointment meets HKEX Listing Rules regarding board composition and independence criteria, with specific provisions for audit committee membership if applicable. The Securities and Futures Ordinance requires proper disclosure of director appointments and any securities interests. The agreement must also address compliance with the Personal Data Privacy Ordinance regarding confidential information handling and ensure alignment with the Corporate Governance Code's principles on board effectiveness, accountability, and transparency.