Is a Board Resolution Required for Changing Directors in a Hong Kong Company?

Changing Directors in a Hong Kong Company Is a Board Resolution Required?

In the course of business operations, changes in shareholders or management are often inevitable. In corporate governance, changes in directors directly affect a company’s decision-making mechanisms and strategic direction. One frequently asked question among business owners and managers is whether a board resolution is required when changing directors in a Hong Kong company.

According to the relevant provisions of the Companies Ordinance Cap. 622, the appointment or removal of directors is generally decided by shareholders at general meetings, rather than necessarily requiring a board resolution. In other words, director changes are significant matters at the shareholder level and fall within the authority of the shareholders’ meeting.

However, in practice, whether a board resolution is needed often depends on the specific provisions outlined in the company's articles of association and its internal governance arrangements.

Recently, several small and medium-sized companies registered in Hong Kong have encountered disputes due to misunderstandings of legal procedures during director changes. For example, in November 2025, a local technology company faced delays in appointing a new executive director after the existing board refused to convene an extraordinary general meeting, citing lack of a formal proposal. The incident attracted media attention and raised industry awareness regarding corporate governance procedures.

Legal professionals point out that while the board plays an important role in daily operations, changes in directorship should be led by shareholders unless otherwise specified in the company’s articles. Some family-owned or partnership-style companies tend to rely habitually on internal board discussions when changing directors, neglecting the statutory requirement for shareholder approval.

This approach carries certain legal risks. Under the Companies Ordinance, only shareholders have the right to appoint or remove directors - the board itself does not possess this power. If a director change is made solely through a board resolution, it may be deemed procedurally unlawful and could potentially impact future financing, audits, or compliance reviews.

Of course, the board can still play a facilitating role. For instance, before shareholders make a decision, the board may propose to convene a general meeting and prepare necessary materials for shareholder review. If the company’s articles grant the board’s nomination committee specific authority, it may also assist in identifying suitable director candidates - although final approval must still come from shareholders through voting.

It is worth noting that with increased awareness of corporate governance in recent years, more Hong Kong companies have clearly defined the boundaries between shareholders' rights and board responsibilities in their articles. For example, some listed companies explicitly state in their articles that any appointment or removal of a director must be approved by an ordinary resolution at a general meeting. Such clarity helps prevent internal conflicts and enhances transparency and governance standards.

For small and medium-sized enterprises, it is advisable to carefully review the company’s articles of association before making any director changes and confirm the required procedures. If uncertain about the steps involved, seeking advice from a professional lawyer or company secretary is recommended. Additionally, the appropriate forms - such as Form ND2A for notifying the appointment of a new director - should be submitted promptly to the Companies Registry to ensure the change is legally valid.

In summary, changing directors in a Hong Kong company typically does not require a board resolution. Instead, such decisions are made by shareholders at a general meeting. While the board may provide procedural support, it holds no final authority. Companies should follow both the Companies Ordinance and their internal governance rules to complete director changes lawfully, ensuring stability and legitimacy in corporate governance.