As a listed company in Hong Kong, in addition to the Hong Kong Companies Ordinance, you will be subject to Securities Law and Listing rule.
With Hong Kong Company Ordinance’s new rule, namely:
1) The company are forbidden to compensate Directors on their liability to the company, and
2) Only under specific circumstances can a company provide compensation to a third party on behalf of the director
Directors are now personally liable for their wrongful act, their personal asset is on the line. Face with such substantial liability, what can a company do to attract people to become their directors and non-executive directors?
The company wants to bring on best people to be their director. However, with so much at stake, any knowledgeable person will only join the company that had a Directors and Officers Liability Insurance in place.