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.