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Corporate Governance of Listed Companies in China

Self-Assessment by the China Securities Regulatory Commission

image of Corporate Governance of Listed Companies in China

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.

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Board and supervisory board

responsibility and supervision

The Company Law governing listed companies in China was promulgated in 1993. It introduced boards of directors and supervisory boards, and clearly provided that companies limited by shares should set up shareholders’ meetings, a board of directors and a supervisory board. Since then, Chinese listed companies have made great progress in the establishment of a board system, gradually introducing an independent director system and a specialised committee system and laying the foundations for the board’s independence and effective operations. Meanwhile, the establishment of mechanisms such as the election, terms of reference and responsibility investigation has paved the way for the board to provide strategic guidance, effective supervision over management and protection of the interests of companies and shareholders.

English

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