Common Law Derivative Action and Challenges in Seeking Multiple Derivative Actions in Hong Kong SAR

Introduction Corporate governance is fundamental in safeguarding the interest of various stake holders of a body corporate. Effective corporate governance has the potential to not only protect the private interest in an incorporated company but also the interest of the public in general. The increasing emphasis on effective corporate governance by listing rules and stock exchanges, aimed at protecting the interest of prospective investors in a public offering, is a clear example of protection of public interest. However, effective corporate governance could be subjected to threats in various scenarios, where innovative legal or regulatory mechanisms are warranted to protect the private and public interests. For example, cross border public offering or listing of stocks may threaten the interest of prospective investors that could be attributed to the diverse standards of corporate governance between the place of incorporation and place of listing