---
title: "SFC and AFRC Joint Statement:… | Insights — Lyoen & Partners"
url: https://lyoenandpartners.com/insights/sfc-and-afrc-joint-statement-boards-must-not-rely-solely-on-management-representations-independent-risk-assessment-and-decision-oversight-are-non-negotiable
description: "Hong Kong's SFC and Accounting and Financial Reporting Council issued a joint statement affirming that boards of listed issuers must take reasonable steps…"
lang: en-US
---

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Friday, May 15, 2026risk

# SFC and AFRC Joint Statement: Boards Must Not Rely Solely on Management Representations — Independent Risk Assessment and Decision Oversight Are Non-Negotiable

Hong Kong's SFC and Accounting and Financial Reporting Council issued a joint statement affirming that boards of listed issuers must take reasonable steps to independently verify that risk management and internal control systems are effective — and cannot simply rely on management's annual representations. The statement reinforces that audit committees must establish procedures for material decisions, including pre-approval thresholds and ongoing monitoring. For SEA founders and scale-up boards accustomed to delegating oversight to management, this is a clear reminder that decision accountability must be structurally embedded at board level.

Sources

Securities and Futures Commission of Hong Kong (SFC) (https://www.sfc.hk/en/News-and-announcements/Policy-statements-and-announcements/Joint-statement-of-the-SFC-and-the-AFRC)

Topic: Decision Quality: https://lyoenandpartners.com/insights/topic/decision-quality
Region: Southeast Asia: https://lyoenandpartners.com/insights/region/sea

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