HK tightens corporate governance with revised code

The revised CG Code introduces more comprehensive Mandatory Disclosure Requirements.

Hong Kong is strengthening corporate governance over risk management and internal control (RMIC) with the revised Corporate Governance Code (CG Code), according to a joint report by KPMG and The Hong Kong Chartered Governance Institute (HKCGI).

The revised CG Code takes effect for financial years starting on or after 1 July. It introduces more comprehensive Mandatory Disclosure Requirements that ask boards to confirm and evidence the appropriateness and effectiveness of RMIC systems.

Required disclosures include the scope and findings of annual reviews, significant control failings or weaknesses, and the responsibilities of internal and external parties involved in the review—often coordinated by governance professionals, the report says.

KPMG added that structured, consistent RMIC review processes—potentially using assurance mapping—can improve accountability, transparency and stakeholder confidence.

An April 2025 survey by KPMG and HKCGI, with over 600 responses from listed companies, found that more than 90% expect the revised CG Code to affect board RMIC review efforts, with about a quarter anticipating a significant impact.

The report also outlined practical steps for boards and management—such as establishing control repositories, regularly testing material controls, and seeking formal confirmations from management to the board—and compares disclosure practices across other markets.