Hong Kong Director Duties, Responsibilities and Role

Hong Kong Director Duties and ResponsibilitiesIn Hong Kong, one of the requirements in setting up a new company is that you must have at least one director, be it a person or a company. Directors in Hong Kong can be of any nationality and they are not required to be a Hong Kong resident (can be either an HK resident or a foreigner). However, a Director has to be at least 18 years old or above, and he or she cannot be bankruptcy or have been convicted for any malpractices. Let’s Understand Hong Kong Director Duties and Responsibilities in the below information.


1. The Power of Directors

As the title suggests, Directors could exercise certain power a company’s behalf by:

  • the company’s articles of association
  • the Companies Ordinance (Cap 622) (CO)
  • common law, and
  • certain resolutions of its members

Please also note that the power of directors, as well as their ability to delegate their powers to others, is subjected to:

  • any provisions in the company’s articles of association limiting those powers
  • CO, including in particular, the directors’ general duties as set out in CO and any matters reserved to the members by CO
  • common law and
  • certain resolutions of its members


2. Duties and Responsibilities

In accordance with the Hong Kong Companies Registry, Directors have the duties to:

  • act, by and large, in good faith for the benefit of the company. A Director has to act in the interests of all its shareholders.
  • exercise powers for a proper purpose for the benefit of members as a whole.
    In other words, a Director cannot use his or her powers for an improper purpose, let alone exercising his or her powers for purposes that are different from purposes for which they were conferred but for the benefit of the company.
  • not delegating powers without proper authorization and duty to exercise independent judgment.
    Proper authorisation refers to authorisation by the company’s memorandumand articles of association (the “constitution”) or whichever resolution.
  • exercise care, skill and diligence.
  • avoid conflicts of interest between personal matters and company’s interest.
    A Director must not allow their personal interests to conflict with those of the company.
  • avoid entering into transactions in which the directors have an interest (except in compliance with the requirements of the law).
  • avoid gaining advantage from the use of position as “director.”
    To be specific, a Director is refrained from taking personal advantage of the company’s opportunities.
  • refrain from accessing or using unauthorized company’s property or information.
    A Director must not abuse his or her power and privilege to misuse the company’s assets.
  • refrain from accepting personal benefit from third parties.
  • observe the company’s Articles of Association.
    A Director has to act in accordance with the company’s constitution and he or she must comply with resolutions (that are made in accordance with the company’s constitution).
  • keep proper books of account.
    Directors are responsible for ensuring that the company is compliant with legal obligations and regulatory requirements. Therefore, Directors must keep tab of the happenings within the company. At times, Directors will assume the supervisory and managerial roles that are generally known as executive directors (non-executive directors are those without managerial responsibilities). In the case the Director(s) failed to carry out their duties in accordance with the Companies Registry’s standards, he or she may be subject to legal proceedings and/or face the consequence of disqualification to act as a director.

View Hong Kong director guide here