Corporate governance policy dialogue with China

[Who] [Objectives] [Reforms] [Meetings]

Since 2002, China has made good corporate governance a top priority. A framework of laws and regulations has been set: e.g. on independent directors, director liability, disclosure, accounting/audit, internal controls, related party transactions, shareholders’ meeting, shareholder reform of converting non-tradable shares to tradable stock, allowing for a more equitable playing field among shareholders etc. 

Today efforts are directed towards improving implementation and enforcement:

Who is involved?

The most prominent, active and influential policy makers, practitioners and experts on corporate governance in China and OECD countries.  Chinese institutions include : the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange, the State Assets Supervision and Administration Commission (SASAC), the Enterprise Research Institute of the Development Research Centre of the State Council, as well as several Chinese universities, amongst others.

What are the specific objectives?

- Encourage use of the OECD Principles of Corporate Governance and OECD Guidelines on Corporate Governance of State-Owned Enterprises and adapt them to national priorities

- Improve understanding of the benefits of sound corporate governance frameworks and practices

- Promote an on-going dialogue between the private and public sectors

- Influence policy making, by providing a forum to compare and evaluate corporate governance developments

- Support viable and effective corporate governance reforms, by discussing and analysing policy options

- Inform the international community about reform initiatives in China

Examples of significant corporate governance reforms in China

• Corporate governance: The “Code of Corporate Governance for Listed Companies in China”, based on the OECD Principles of Corporate Governance, issued by the China Securities Regulatory Commission (CSRC) and the State Economic and Trade Commission in January 2002. 

Results : A first report on corporate governance in China, which highlights the progress to date and remaining challenges, was published by the Shanghai Stock Exchange in 2004.

• State Owned Enterprises: Better management of state owned assets becomes one of the top priority areas of the work programme of the 16th Communist Party Congress, end 2002.

Results: April 2003, the State Assets Supervision and Administration Commission (SASAC) was set up to manage state-owned assets. The establishment of the SASAC represents a crucial step in separating the ownership function regarding state owned assets from the regulatory function within the Chinese administration.

MEETING SCHEDULE

FORTH POLICY DIALOGUE ON CORPORATE GOVERNANCE IN CHINA forthcoming

THIRD POLICY DIALOGUE ON CORPORATE GOVERNANCE IN CHINA  29-30 March 2007 Senior officials, business leaders and scholars from China and OECD countries provided stimulating debate on boardroom challenges and recent Corporate Governance Policy developments.

SECOND POLICY DIALOGUE ON COPORATE GOVERNANCE IN CHINA 19 May 2005 The OECD presented for the first time after their endorsement by the member countries at the end of April 2005 the OECD Guidelines on Corporate Governance of State Owned Enterprises.

FIRST POLICY DIALOGUE ON CORPORATE GOVERNANCE IN CHINA 25-26 February 2004 Issues discussed included scaling down state ownership of listed companies; the role of the state as a shareholder; the role and responsibilities of boards of directors (including board committees), as well as the issue of corporate governance enforcement.