Please enable JavaScript.
Coggle requires JavaScript to display documents.
COOPERATE GOVERNANCE IN CHINA (Supervisors and supervisory board (The…
COOPERATE GOVERNANCE IN CHINA
Shareholders and shareholders’ meetings
All shareholders are treated fairly, especially minority shareholders
Directors, supervisors, and managers of companies will be liable to pay compensation if they breach laws and regulations
The role of institutional investors is specifically mentioned in the appointment of directors, remuneration, and other major decisions
The Code is aimed at listed companies and addresses ‘the protection of investors’ interests and rights, the basic behaviour rules and moral standards for directors, supervisors, managers, and other
In January 2001, the CSRC issued a Code of Corporate Governance For Listed Companies in China (hereinafter ‘the Code’) based on the OECD Principles of Corporate Governance
Listed company and its controlling shareholders
A protocol for how the controlling shareholders should behave when an enterprise is being restructured or reorganized prior to listing
The listed company should be able to act independently of the controlling shareholders, including its personnel, and also the financial and accounting management systems of the listed company should be independent from the controlling shareholders
States that ‘a listed company’s business shall be completely independent from that of its controlling shareholders’
Directors and board of directors
Directors should attend appropriate training sessions to familiarize themselves with their directorial duties and responsibilities
Directors should be suitably qualified with appropriate skills and knowledge.
Directors should ‘faithfully, honestly, and diligently perform their duties for the best interests of the company and all shareholders’
Directors should also devote adequate time to their role as director and to attending board meetings.
The board of directors is accountable to shareholders and ‘shall treat all shareholders equally and shall be concerned with the interests of stakeholders’
The board of directors should meet periodically and have a pre-set agenda
Supervisors and supervisory board
The supervisory board should comprise individuals with ‘professional knowledge or work experience in such areas as law and accounting’
The supervisory board’s members need to be able
to supervise effectively the directors and managers
to examine knowledgeably the company’s financial matters
is accountable to shareholders a
Performance assessments and incentive and disciplinary systems
Directors, supervisors, and management’s performance should be assessed through a fair and transparent procedure, with directors and management being evaluated by the board of directors or by the remuneration/appraisal committee.
Stakeholders
The section of the Code that deals with stakeholders states that, ‘while maintaining the listed company’s development and maximizing the benefits of shareholders, the company shall be concerned with the welfare, environmental protection and public interests of the community in which it resides, and shall pay attention to the company’s social responsibilities’.
Information and disclosure and transparency
The importance of the provision of timely and accurate information is emphasized; as well as any mandatory disclosures, the company should disclose other information that may impact on the decisions of shareholders or stakeholders.