Corporate Governance of Listed Companies in China
Self-Assessment by the China Securities Regulatory Commission
This report looks at the institutional framework of corporate governance in China through the prism of the OECD Principles of Corporate Governance and is a product of the ongoing OECD-China Policy Dialogue on Corporate Governance. By assessing a broad range of laws, regulations and codes, it provides a valuable reference for understanding how much has been achieved in Chinese corporate governance and the main ambitions of future reform efforts.
The report shows that corporate governance has improved significantly since the Chinese stock market was created in 1990, with important achievements in establishing and developing the legal and regulatory framework. The OECD-China Self-Assessment represents a thorough review of all laws, regulations and codes that relate to every principle recommended by the OECD Principles of Corporate Governance. It documents the advances in the Chinese Corporate Governance framework. Building on this report, bilateral co-operation between China and the OECD will continue to enhance the understanding of China’s corporate governance system and how it impacts on company and investor behaviour.
Stakeholders and corporate social responsibility
After the Chinese government released the Scientific Outlook on Development which puts people’s interests first and stresses an all-round, balanced and sustainable development model, and defined the strategic mission of building a harmonious socialist society, Corporate Social Responsibility (CSR) has drawn increasing attention from different sectors across the country. This indicates a crucial transformation in China’s development model, a shift from a one-sided focus on the economic growth rate to a scientific development model that stresses balance among economic, social and environmental development and sustainable growth. At the micro-economic level, instead of maximising shareholders’ interests alone, companies now take a more holistic view of how their decisions and actions might affect stakeholders and make compensation or repayments accordingly. They have begun to undertake varied forms of social responsibilities across economic, legal, moral and charity issues, resulting in a beneficial interaction with stakeholders and an internal and external environment favourable to their own long-term operations.