the fourth asian roundtable on corporate governance the recent development of corporate governance...
TRANSCRIPT
The Fourth Asian Roundtable on Corporate Governance
The Recent Development of Corporate Governance in the Greater China Area
Prof. Ruyin HuDirector of Research CenterShanghai Stock Exchange
11-12 November 2002Mumbia, India
Development of Corporate Development of Corporate Governance in Mainland China Governance in Mainland China
Two path breaking documents:
Code of Corporate Governance enacted by CSRC and State and
Economic Trade Commission Based on a Shanghai Stock Exchange Corporate Governance Guideline
Guidelines for Introducing Independent Directors enacted by
CSRC
Development of Corporate Development of Corporate Governance in Mainland ChinaGovernance in Mainland China
Other developments:
Rules that target the behavior of controlling shareholders
Improvement in communications technology leads to
improvement in corporate governance
Development of Corporate Development of Corporate Governance in Mainland ChinaGovernance in Mainland China
Directions of improvement:
Legal infrastructure and independent judiciary Class action
Investor education
Development of Corporate Development of Corporate Governance in Hong KongGovernance in Hong Kong
Corporate governance culture:
Listed companies continue to be dominated by families
Pushing forward the best practices of corporate governance
by amending related rules Proposed Amendments to Listing Rules
Information disclosure:
Balance among three factors Frequency (concerns about short run stock price volatility)
Coverage
Timely report
Development of Corporate Development of Corporate Governance in Hong KongGovernance in Hong Kong
Development of Corporate Development of Corporate Governance in Hong KongGovernance in Hong Kong
Independent director:
All shareholders should have the same voting rights
Large shareholders should not be deprived of the
rights of nominating and appointing independent
directors.
Good corporate governance depends on individual
professional integrity
Development of Corporate Development of Corporate Governance in TaiwanGovernance in Taiwan
New publication:
Listed companies’ corporate governance practice Protect investors’ rights
Strengthen functions of the board and supervisory board
Increase transparency
Development of Corporate Development of Corporate Governance in TaiwanGovernance in Taiwan
Information disclosure: Six categories
Financial and investment related matters
Legal actions
Material events related to operation and production
Changes in management and board members
Decisions related to dividend and shareholders' right
Other matters that may have impacts on stock price or shareholders'
equity
Market Observation System linked with the exchange’s website
Development of Corporate Development of Corporate Governance in TaiwanGovernance in Taiwan
Development of Investor Protection Law (Primary testimony passed in May 2002)
Service of consultation
Litigation of Class Action is proceeded for investors
ConclusionConclusion
The role of honest and capable courts and regulators is critical.
Overemphasis on regulations and rules carries the risk of a triumph of form over substance.
Education, regulation, and enforcement are equally important.