HONG KONG SAR, CHINA Law and Practice Contributed by: Vincent Lung and Mike Yeung, Parkside Chambers
2. Corporate Management 2.1 Principal Bodies or Functions Shareholders
risk officer, compliance officer and heads of business divisions. Company Secretary The company secretary has an important governance role. The company secretary assists with board pro - cedures, statutory filings, registers, shareholder meet - ings, minutes and compliance timetables. For listed companies, the company secretary often acts as a key link between the board, the manage - ment, the regulators and the shareholders. The com - pany secretary also usually assists in the preparation of announcements, circulars and annual reports. 2.2 Types of Decisions Board Decisions The board typically decides matters relating to: • business strategy; • annual budgets; • financing; • acquisitions and disposals; • major contracts; • litigation; • risk appetite; • internal controls; • senior appointments; • financial reporting; • regulatory compliance; and • corporate policies. The articles usually give authority to the board to man - age the company’s business. That authority is subject to matters reserved to shareholders by statute, the articles or any shareholders’ agreement. Shareholder Decisions Shareholders make decisions on matters such as: • amendments to the articles; • appointment and removal of directors; • changes to share capital; • approval of certain payments to directors; • voluntary winding up; • variation of class rights; and • other matters reserved by the articles.
Shareholders are the members of a company. They provide capital and hold economic and voting rights attached to their shares. However, shareholders do not directly own the company’s assets; they only own the shares, as the company is a separate legal person. Generally, shareholders do not directly manage the operations of a company (which is vested in the direc - tors); rather they exercise control through resolutions. For example, they appoint and remove directors, amend the articles, approve certain transactions and make decisions reserved to them by statute or the articles. Board of Directors The board of directors is the principal management organ of the company. It is usually responsible for strategy, business planning, financing, major con - tracts, risk management, internal controls and com - pliance. In private companies, directors may be closely involved in daily management. In larger companies, the board usually delegates operational responsibility to senior management while retaining oversight. Board Committees Board committees assist the board by focusing on particular areas. Common committees include audit, remuneration and nomination committees. Larger companies may also establish risk, investment, sus - tainability, compliance, technology or AI committees. Committees may make recommendations or exercise delegated authority. The board remains responsible overall for ensuring that delegated functions are prop - erly performed. Senior Management Senior management implements board strategy and manages the company’s daily operations. Typical roles include the chief executive officer, chief financial officer, chief operating officer, general counsel, chief
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