Corporate Governance of Listed Companies in China

1 OECD- China Policy Dialogue on Corporate Governance OECD- China Policy Dialogue on Corporate Governance OECD- China Policy Dialogue Corporate Governance of Listed Companies on Corporate Governance in China SELF-ASSESSMENT BY THE China SECURITIES REGULATORY. COMMISSION Corporate Governance of 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 Listed Companies in China ER N A NCE. MARK. E TS C. OR P OR. M GOV. Corporate Governance . By assessing a broad range of laws, regulations and codes, it provides a valuable SELF-ASSESSMENT BY THE China SECURITIES D E VEL. OPME. NT R E. FOR. reference for understanding how much has been achieved in Chinese Corporate Governance and the main POR AT. E. ambitions of future reform efforts.

2 REGULATORY COMMISSION. R NA NC. E MAR. K E TS. C O R. E. FOR M GOV. The report shows that Corporate Governance has improved significantly since the Chinese stock market NT R E. OPME. D E VEL. was created in 1990, with important achievements in establishing and developing the legal and regulatory E OR ATE. OR AT. P. ET S COR. framework. The OECD- China Self-Assessment represents a thorough review of all laws, regulations and codes CO R P A NCE. MARK. EFORM NT REFORM R EF. REFOR. M GOV. ER N. E R N A NCE R PME O V E R N A N CE POR. that relate to every principle recommended by the OECD Principles of Corporate Governance . It documents OV V E LO. RM ET S. E TS G OR. E TS G. DE MARK E TS C. E REFO M Governance . R ATE. the advances in the Chinese Corporate Governance framework. Building on this report, bilateral co-operation MARK E TS C. OR PO. P O R ATE MARK.

3 E TS. N C N T MARK A NCE. MARK. PM. R N A M E EV OE L. K O E. LOP. C N. N A NCE. M A R. F O R M C GOVER. N A N. S G O V ER T R EF. OR. D E V E R M GO. V E R. A T E D. between China and the OECD will continue to enhance the understanding of China 's Corporate Governance E R R E M ET E N E E FO. OR. POR AT TE DEVELOPME. V R M R EV. MARK CO R P. O. A NCE. GO F P NT. NT R E E VELO R POR. ATE D. system and how it impacts on company and investor behaviour. V E R N E LOPME. M E N T O R ATE D C O R F O R M C O. K. GO R ATE. D E V. VELOP ARKE T. S CO R P. EFORM RKETS CORPOR RNANCE RE. A. MARK. E T S. T MAR. MARK. E TS C. OR PO. P O R ATE DE Governance M E R N A NCE R E MA G O V E G OVERN. A NCE. V E L O PMEN E F. V S E. M CO R. C M R. R ATE D ATE DEVELOPM. N. TS GO ARKE T. N A FO R EN T. EFORM GOVER NT R E. Contents REFOR DEVELOPMENT R ENT MARKE FORM E N T M LOPME O R P O N A.

4 GOVER. E E. RM C. R. ELOPM TS Corporate . N T D E V PO R. OPME S COR. Preface by Shang Fulin, Chairman, China Securities Regulatory Commission COR P. OR ATE. E D E VELOP. M. O R ATE. D E VEL. R A T E DE V KE N A N C E REFO NANCE MARKET M A R K E TS. OR AT. P O A R T. CO R P GOVER PMEN. O R M. K E TS. C NA NC. E GOVER. CO R P NA NC. E MAR. R E FORM FORM. GOVER. A R K E TS E NT R. EFORM. E D EVELO. Preface by Richard Boucher, Deputy Secretary-General, OECD E R C E R E T M M A T. R POR. V. ERNAN ATE DEVELOPME. P. PMEN. M G O N T VE LO. REFOR TE D E. K E T S GOV POR T E D EVELO RKETS CORPORA R E F O R M CO. Chapter 1. The Corporate Governance framework in China MA R R A A NCE. R POR. O. Corporate Governance of Listed Companies in China C MA. K E TS. GOVER. NA NC. E MAR. E F O RM CO EFORM GOVERN. A NCE. T S G OVERN. R E. Chapter 2. Shareholders' rights N A NCE E NT R MARK.

5 GOVER RPORATE DEVE. LOPM. E L O P M E NT COR P. OR ATE. D E V A R K E TS. Chapter 3. The equitable treatment of shareholders ET S C O. OR ATE RM GOVERNANC. E M. MARK. O R M CO R P T R EF. O. Chapter 4. Information disclosure RE F PMEN. DE VELO. OR ATE. COR P. Chapter 5. Board and supervisory board: responsibility and supervision Chapter 6. Stakeholders and Corporate social responsibility RK. CE M A. V ER N A N. EFORM. G O. R EF. ELOPM. E NT R. OV E R N A NCE E V. E V G. R K E TS K E T S CO R PO R A. D TE D. OR ATE. COR P M A. K E T S. EN T OPM. D E V EL EF. R. ELOPM. R. CE M A CE M A. ER N A N D E V ER N A N A T E. V V R. OR ATE PMENT REFORM. O O. OR PO. M G G T R. REFOR PMEN. R M CO R P ELO R E F ORM C PORATE DEVELO RK. O NT A. F E V E M. N C E RE POR AT. E D. E R N A NC TS CO. R. P M E. A O R V E. E V EL O. OVERN NANCE MARKET ARKETS GO. S C A R K.

6 CE M R M GO. V. Please cite this publication as: R K E TS G T M M GOV. ER N A N. P O R ATE D LOPMENT REFO. GO E. A V ER N R R V. TM G O. M E E F O C O. VELOP. R E. PMEN FORM. M. K E TS. REFOR PMEN. T EV. OECD (2011), Corporate Governance of Listed Companies in China : Self-Assessment by the China Securities O M E NT E E ATE D R. V E L P E D E VELO C E R R POR M A. DE LO AT E D N C O. NT KE. V ER N A ER N A N CE M A R K. E T. R POR OPME. EV RA S. OR ATE E MAR. ATE D OR PO ET. Regulatory Commission, OECD Publishing. R P R POR M C O E TS C S G O E V E L R NA NC. C O C O R R K. ET D O V E. PM. E REFO M GOVERNANC OR ATE. S A G. MARK EVELO. ET E M M GOV EFORM. MARK C REFOR P ATE R D. N A NCE N A N M E N T T C O R O R A T E. OVER. N. R POR. R. VELOP FORM. GO V E FO R OP M E CO R P E. NT R E D E VEL K E TS POR AT. This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical E TS G OPME TE D E R ATE CE R E E MAR R M CO S COR.

7 MARK T E D E VEL. R P O R A S C OR PO. VE R N A N V E R NA NC. E R E F O E M ARKE T. E L O P M. R M CO V E R N A N C E M A R RNANC EFORM GOVERN POR ATE DEV RNAN. A T C. TS G O. databases. Visit , and do not hesitate to contact us for more information. R KE O AN. E TS C. OR PO OR M G. MARK R E F O A R K E E N T R EF. G O V E. N A NCE E NT M K E TS CO R. PM T R. M GO E DE V. ELO PMEN M GOV. E. GOVER DEVELOPMENT. REFOR. D E V ELOPM ETS CORPORAT P M E N T MAR PORATE DEVELO C E R EFORM LOPMENT REFOR M CO. R ATE E MAR. K. V ELO TS CO. R R NAN E DE V. E. R E FO R. OR ATE R P O C D E E O V E T C E. OR ATE Governance M. A. E TS G. K. M CO NAN. O R P N A N A R O R DE V. C ER OR P. REFOR REFOR. M GOV. CO R P MARK MARK. E TS C. GOVER COR P. OR ATE. ISBN 978-92-64-11908-6. 26 2011 08 1 P. -:HSTCQE=VV^U][: Corporate Governance of Listed Companies in China SELF-ASSESSMENT BY THE China SECURITIES.

8 REGULATORY COMMISSION. This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. Please cite this publication as: OECD (2011), Corporate Governance of Listed Companies in China : Self-Assessment by the China Securities Regulatory Commission, OECD Publishing. ISBN 978-92-64-11908-6 (print) . ISBN 978-92-64-11920-8 (PDF) .. Corrigenda to OECD publications may be found on line at: OECD 2011. You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given.

9 All requests for public or commercial use and translation rights should be submitted to Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at or the Centre fran ais d'exploitation du droit de copie (CFC). at FOREWORD. Foreword 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 ambition 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.

10 In preparing the Report, the China Securities Regulatory Commission (CSRC) has, together with other relevant agencies and ministries, accomplished a major body of work and taken it through a process of extensive consultation and inter-agency drafting. OECD. considers this an important achievement; a tangible sign of China 's commitment to excellence and testimony to its readiness to continue the modernization of the country's capital markets and Corporate Governance practices. Throughout the drafting process, the OECD Secretariat, as well as national representatives from the OECD Corporate Governance Committee, have been engaged in workshops and policy discussions with their Chinese counterparts. In November 2010, the full Committee had an opportunity to discuss the report in-depth with a Chinese delegation and was impressed with the breadth and depth of the legal and regulatory framework that China has established in the area of Corporate Governance .