The Strength of Commercial Banks Depends on That of Its Board of Directors

2007-11-8

21st Century: How the Five-year Outline is identified with by people in CMBC?

Dong Wenbiao: The Company’s management, together with directors, had discussed on the Five-year Outline for more than ten days. We think that only through repeated discussions can common understandings be reached and plans and ways be determined. During these discussions, all the people can say their say. It seems to me that the Five-year Outline is the guidelines for our new Board of Directors to make decisions and take actions, and it aims to direct CMBC to become an internationally first-class modern commercial bank with advanced management, rapid growth, economical costs and maximum of corporation value, and to establish by steps a diversified financial industry group headed by its commercial banking business.

　　Moreover, considering that the Five-year Outline is not just a thing cared by the company’s management, the Board of Directors specially organized a propaganda group to give lectures to all branches, with an objective to make all the employees know the objective CMBC will realize and the enjoyment they will share in future five years.

Division of Principle-discussing from Decision-making

21st Century: You just mentioned eight aspects in the Five-year Outline, on which a strategic transformation will be realized, and the first one is corporation governance. Among CMBC’s substantial shareholders, we can see business elites and mixed cultures. As the Chairman of the Board, how do you persuade them and unify their opinions?

Dong Wenbiao: Optimization of corporation governance is the second thing I focus on after serving as the Chairman, and at the same time, it is also an important objective in CMBC’s future development. This year, the consummation of corporation governance mainly embodies in three aspects: amendment to the discussion rules for the Board of Directors; amendment to the detailed working rules for the Committee; Strengthening the director’s responsibility to perform his duty.

　　Let me tell about the first point, amendment to the discussion rules for the Board of Directors. To simply say, that is to divide principle-discussing from decision-making, and to divide the Board meetings into decision-making meetings and non-decision-making ones. For each season, the Board of Directors will convene a discussion meeting and try to make it a communication platform where all directors can share information, exchange ideas, cooperate with each other and reach common understandings. At such meeting, directors can clearly explain their various ideas; However, when it is the time for decision-making, directors must independently execute their own power and may not incur any wrangle or make a profit in a troubled situation. In fact, the discussion meeting lays a foundation for the decision-making meeting.

　　On the other hand, for the purpose of strengthening the function of special committees, a motion at a decision-making meeting shall in principle be made by special committees; Where other people entitled to make a motion so does, such motion shall firstly be studied and discussed on by corresponding special committees in the Board of Directors. We also amended detailed working rules for six special committees, fractionize the limitation of duties for such six special committees, make clear the working procedures and determine matters which are decided by authorization. For example, working procedures are divided into motion working procedures, decision-making matters working procedures, reports working procedures, temporary special motion disposal procedures and feedback; motion working procedures can be subdivided into proposal, examination and submitting of motion. All these operative arrangements have perfected the foundation of the system upon which CMBC scientifically makes a decision.

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