When is the Board Accountable for Delegation and Reliance? A Case Study of the MTR Corporation

Abstract

On 15 April 2014, the MTR Corporation Limited (‘MTR’) unexpectedly announced a two-year delay in its Express Rail Link project leading Professor Anthony Cheung, the Secretary for Transport and Housing as well as a non-executive director of the MTR, to express that he was ‘totally caught by surprise’. This article addresses two important and related issues that are raised in the context of company law, namely, the extent to which directors in Hong Kong can delegate their responsibilities and the extent to which they may place reliance upon third parties. This is especially significant following the enactment of the new Companies Ordinance on 3 March 2014 that codified the standard of care expected of directors, which benchmark some of the members of the board of MTR might have breached.