Continual Improvements to Be Made for Listed Banking Corporations

2007-8-13

Li Wenxuan  China Securities

Xiao Yuanqi, Deputy Director of the Second Department of CBRC pointed out yesterday that, although 12 national stock commercial banks, especially 7 listed banks, have achieved capital improvements in the past a few years, there still remained a lot to be explored and improved including how to better clarify the responsibility border among the governing bodies, how to optimize holding structure, the differentiation of share isolation or concentration, how to regulate the major holders and controlling holders and how to better regulate the information disclosure etc..  

On the seminar on the operation of board of directors and special committees of mid and small listed banks sponsored by CMBC, Xiao Yuanqi commented on the questions that need to be further studied, that include: 1. the way of corporate governance. How to learn from the experiences from US and EU, Japan, Germany, East Asia and the governing mode for transiting economies to improve the banking corporate governance of China. 2. How to establish framework for corporate governance based on the size and complexity of the business. 3. How to clarify the border of responsibilities of governing bodies, including the board of directors and board of supervisors, and how to bring better play of the different functions of the governor and the board chairman. 4. What are the competencies and functions of the board of directors, how to let the board of directors to function as a core and how to avoid the “empty” and “reutilized” board of directors. 5. What is the effect of small shareholders, depositors, institutional investors on the corporate governance. 6. What parts shall the government and the regulatory bodies shall play in corporate governance. 7. How to maintain the independence of each part in corporate governance, how shall the board of directors be separated from the management and the controlling share holders, how to separate the board of supervisors for the board of directors and the management, and how to maintain the independence of the independent directors and external supervisors. 8. How to carry out continual supervision on the major shareholders and controlling shareholders. 9. How to optimize shareholding structure and how to make the institutional investors to produce better effects in corporate regulations and governance. 10. How to further regulate nomination, employment, assessment and discipline of the directors and supervisors.

For constructing a better corporate government mechanism, Xiao Yuanqi suggests to further define the risk management and auditing functions of the board of directors and strengthen the supervisory functions of the board of supervisors. Board of Supervisors can report the noncompliance and violations of the directors and senior executives to the board of directors and the Shareholders Meeting, or they may report them directly to CBRC and other relevant authorities; they may even take legal action if necessary.

【Close this window】