Corporate Governance in Hong Kong-Listed Biotech Companies

For investors in pre-revenue biotech companies, the quality of corporate governance is not a box-ticking exercise — it is a critical determinant of investment outcome. When a company has no earnings to evaluate, investors must rely on the judgment, experience, and integrity of the board and senior management to make sound decisions about which drugs to develop, which trials to run, and which partnerships to pursue[reference:0]. A loss of confidence in the board or management team can inflict significant damage on a company and its share price.

This article examines the corporate governance practices of all 82 biotech companies listed on the Hong Kong Stock Exchange (HKEX) under Chapter 18A as of December 31, 2025[reference:1]. Drawing on the Skadden 2026 Biotech Report, we analyse board composition, gender diversity, director nationality, CEO-chairman duality, and executive team structures — providing overseas investors, law firms, and compliance professionals with a data-driven understanding of governance norms in this dynamic sector.

1. Board Size and Independence

HKEX listing rules require that at least one-third of a company’s board members be independent non-executive directors (INEDs), and that the board consist of no fewer than three INEDs[reference:2]. Among the 82 biotech companies covered in the 2026 report, 26 companies went beyond the minimum requirement by appointing additional INEDs beyond the mandatory threshold.

This is a meaningful signal. While most companies comply with the minimum, those that voluntarily strengthen board independence tend to be more attractive to institutional investors who place a premium on robust oversight. Independent directors bring external perspectives, challenge management assumptions, and provide critical safeguards against conflicts of interest — all of which are especially important in the high-risk, high-uncertainty environment of biotech R&D.

2. Gender Diversity: Progress, but Room to Grow

Board diversity has become a major focus for regulators, investors, and stakeholders in recent years[reference:3]. In mid-2022, HKEX introduced new listing rules requiring all new applicants to appoint at least one female director at the time of listing, and giving existing listed companies until December 31, 2024 to comply[reference:4][reference:5]. The transition period has now ended, and the results are clear.

All 82 biotech companies in the 2026 report have at least one female director on their boards — full compliance with the mandate[reference:6]. Across these 82 companies, there are 679 directors in total, of whom 149 are women — representing 22% of all directors. This is a notable improvement from 19% in the previous report and 17% two years ago.

While the regulatory mandate has been met, the overall proportion of women on biotech boards remains relatively low at 22%. This is broadly in line with the broader Hong Kong market, where female representation on listed company boards rose to approximately 21.5% by 2025[reference:7]. However, it still lags behind some international peers and leaves significant room for improvement.

3. Director Nationality and Internationalisation

The nationality composition of biotech company boards provides insight into the international orientation of these firms. While the Skadden report notes that Chinese mainland nationals form the largest group, a significant proportion of directors come from Hong Kong, the United States, Canada, Singapore, and Taiwan.

According to earlier Skadden surveys, among companies listed in 2021, the nationality breakdown was approximately: 51% from Chinese mainland, 27% from Hong Kong, 10% from the United States, 5% from Canada, 3% from Singapore, 1% from Taiwan, and 3% from other jurisdictions[reference:8]. While the 2026 data may have shifted, the general pattern suggests that roughly half of biotech company directors are from the Chinese mainland, with the remainder coming from Hong Kong and other international jurisdictions.

This mix reflects the global nature of the biotech industry. Many Chinese biotech companies have R&D operations, licensing partnerships, or commercialisation plans that span multiple countries — and their boards often include directors with relevant international experience.

4. CEO-Chairman Duality: A Common Practice

HKEX’s Corporate Governance Code does not prohibit the same person from serving as both chairman and CEO, but it does not recommend the practice. Companies that choose to combine the roles must explain their rationale in their corporate governance reports[reference:9][reference:10].

Despite this guidance, the practice remains widespread among Hong Kong-listed biotech companies. Of the 82 companies in the 2026 report, 51 companies (62%) have the same individual serving as both chairman and CEO. This is broadly consistent with earlier data: among the 48 companies listed between 2018 and 2021, 35 (73%) combined the roles[reference:11].

The high prevalence of CEO-chairman duality is often attributed to the founder-centric nature of biotech companies. Many of these firms were founded by scientists or entrepreneurs who remain deeply involved in both strategic vision and day-to-day operations[reference:12]. In such cases, the combined role can provide clear leadership, faster decision-making, and strong alignment between the founder’s vision and execution.

However, from a governance perspective, duality presents trade-offs. While it can streamline leadership, it also concentrates power and may weaken the board’s ability to independently oversee management. Investors should consider whether the company has countervailing mechanisms in place — such as a strong lead independent director, robust committee structures, or a highly engaged board — to mitigate the risks of concentrated authority.

5. Executive Team Size: Wide Variation

HKEX does not prescribe a minimum number of senior executives, nor does it define which positions constitute “senior management”[reference:13]. As a result, companies have broad discretion in determining who they list as senior management in their prospectuses — leading to significant variation across the sector.

Among the 82 companies, the number of senior executives disclosed ranges from a minimum of 1 to a maximum of 12. This wide dispersion reflects differences in company size, stage of development, and organisational structure. Earlier Skadden surveys found that the average number of senior executives was 6.3, with a median of 6 and a mode of 5[reference:14].

6. Why Governance Matters for Overseas Investors

For overseas investors, law firms, and compliance professionals, understanding the governance practices of HKEX-listed biotech companies is not an academic exercise — it is a practical necessity for due diligence, risk assessment, and investment decision-making.

Here are some key considerations:

• Board independence: Companies with a higher proportion of INEDs tend to have stronger oversight. Check whether the company has gone beyond the minimum requirement.
• Gender diversity: While all companies now meet the minimum, those with greater gender diversity may benefit from broader perspectives and better decision-making.
• International directors: The presence of directors with international experience can be a positive signal for companies with global ambitions.
• CEO-chairman duality: Understand the rationale and assess whether the company has adequate checks and balances.
• Executive team depth: Ensure the team has the right skills and experience to execute the company’s R&D and commercialisation plans.

Access to reliable, official company information is the foundation of effective due diligence. Whether you are evaluating a potential investment, conducting a compliance review, or advising a client on a cross-border transaction, having verified data about a company’s registration status, credit history, legal risk profile, and corporate governance is essential.

Services that provide official enterprise credit reports and professional due diligence reports can help bridge the information gap — enabling more confident, better-informed commercial decisions.

7. Conclusion

The corporate governance landscape of Hong Kong-listed biotech companies has evolved significantly since the introduction of Chapter 18A in 2018. Regulatory reforms — particularly the mandate for at least one female director — have driven measurable improvements in board diversity. However, other governance features, such as the high prevalence of CEO-chairman duality and wide variation in executive team structures, reflect the founder-driven, entrepreneurial nature of the sector.

For overseas investors and professional services firms, the message is clear: governance matters. Companies with strong, independent, and diverse boards are better positioned to navigate the challenges of drug development, regulatory approval, and commercialisation. And for those seeking to engage with Chinese biotech companies, rigorous due diligence — grounded in reliable, official information — is the key to mitigating risk and unlocking opportunity.