Is mainland China moving towards a principles-based approach to regulation? This and other important corporate governance and regulatory issues on the mainland were discussed in the Institute’s latest China Corporate and Regulatory Update.
The Institute has been running its Annual Corporate and Regulatory Update (ACRU) seminars since 1999 and they have grown to be the most popular events in the Institute’s CPD calendar – last years’ ACRU, for example, drew a record audience of 850 attendees. The seminars are designed to provide practitioners with first-hand information from regulators about the latest corporate and regulatory developments. This simple formula has proved so successful that the Institute has sought to replicate it for corporate and regulatory developments in mainland China. The Institute’s China Corporate and Regulatory Update (CCRU) was thus born in 2006 and has similarly gone from strength to strength.
The CCRU conference, held on 24 January 2013 in Hong Kong, discussed a number of current corporate governance and regulatory issues relevant to the mainland, including: the governance challenges of closely-held companies; the current regulatory regime for information disclosure and the internal controls of listed companies; and the role of the board secretary in corporate governance. It also shed new light on the increasing emphasis by mainland regulators on encouraging voluntary compliance with corporate governance best practices.
The governance challenges of closely held companies
Ms Deng Hui, Senior Manager of the Corporate Management Department of the Shenzhen Stock Exchange, focused her presentation on the challenges resulting from the dominance of mainland listed companies by controlling shareholders. While the integration of ownership and management can enhance the operating efficiency and flexibility of an enterprise, the company can become vulnerable to the personal discretion of those in control. In most closely-held listed companies minority shareholders cannot effectively balance the power of the majority shareholders (who are the company’s de facto controllers). In general, the shareholding culture and awareness of minority shareholders’ rights needs to be strengthened in listed companies, she said.
Ms Deng also addressed the role of independent directors. She pointed out that the mainland has implemented new rules and regulations requiring listed companies to engage independent directors. Playing an important role in corporate governance, independent directors should be the ‘supervisors’ or ‘advisers’ on the development of the company in practice, she said. Moreover, independent directors voluntarily engaged by listed companies in addition to the statutory requirements, such as industry experts or retired government officials, can provide the company with useful strategic advice on its future development.
However, corporate governance faces a variety of hidden challenges in mainland China. Ms Deng said that the lack of understanding of corporate governance issues and standards of operations among directors, supervisors, senior managers and, in particular, the controlling shareholders of listed companies, has led to ‘unintentional’ governance failures. Some listed companies would like to improve their corporate governance but do not have adequate knowledge and thus cannot set up a good corporate governance structure on their own. On the other hand, where the controlling shareholders, directors, supervisors and senior managers abuse their power and derive illegitimate personal profit from the listed company at the expense of the interests of the company and the minority shareholders, these are clearly ‘intentional’ governance failures.
She further pointed out that it is easy to put on an appearance of compliance. Some governance standards are difficult to quantify or clarify so the degree to which listed companies comply with them is sometimes difficult to define. There has therefore been an increased focus on selfdiscipline, internal control and effective disclosure. The first step to solving a problem is after all to recognise that you have a problem.
Ms Deng also addressed the issue of self-regulation. She pointed out that, in addition to laws, voluntary best practice standards and guidelines have an important role to play in improving corporate governance. Furthermore, she said consideration should be given to the characteristics of small and medium-sized private enterprises, and greater use should be made of the discipline imposed by the market. Regulators need to encourage companies to exercise self-discipline and encourage the development of a new governance culture on the mainland.
In this context the role of the board secretary is highly important. The board secretary is often the company officer who conveys modern corporate governance concepts to the controlling shareholders of the company. An experienced board secretary is also the guide of the company in the capital market and the person initiating the implementation of better corporate governance standards in the company. Ms Deng added that the role of the board secretary in corporate governance has become much more widely recognised in mainland China and the board secretary profession now has a much higher profile.
Of course, enhancing the governance of listed companies does incur costs and regulators should resist the temptation to keep adding to companies’ compliance burdens, she said. Many jurisdictions have sought to achieve ‘simple’ and ‘flexible’ governance regimes for their listed companies. Ms Deng said that the mainland can explore the establishment of ‘individualised’ governance systems for listed companies to achieve a better fit with their different characteristics and individual needs.
Promoting voluntary disclosure and internal controls
Mr Zhou Qinye, former Deputy VicePresident of the Shanghai Stock Exchange, focused his presentation on the development of the mainland’s regulatory regime for information disclosure and the internal controls of listed companies. He gave a detailed analysis of the key content of, and amendments to, the listing rules and requirements on information disclosure over the years, from the early 1990s when the mainland reformed its rules on shareholding structures to the promulgation and implementation of the securities law in 1997.
Regarding internal controls, he described the development of the mainland’s current standards in this area since 2001 when the Ministry of Finance released its first internal control standards. From 2008 to 2011, the Shanghai Stock Exchange further mandated the publication of internal control reports for three types of company – those in the corporate governance sector, financial companies and companies listed overseas. Last August, the Ministry of Finance and the China Securities Regulatory Commission (CSRC) promulgated a notice on the implementation of internal controls by listed companies, contributing significantly to the effective establishment of internal control standards in listed companies.
Mr Zhou explained that the regulatory emphasis has evolved from focusing on the adequacy of the disclosures made by listed companies, to promoting the importance and usefulness of effective disclosure. Mainland regulators have retained a minimum level of mandatory information disclosure but have switched their emphasis to promoting voluntary disclosure. Moreover, routine suspension of trading has been reduced as far as possible in order to enhance market efficiency. Electronic disclosure is used in place of disclosure through designated media, and consolidated reports are used in place of separate financial reports and narrative reports. In addition, the press and the general public can play a monitoring role. Regulatory authorities will continue to enhance their efforts in investigation, identifying responsibility for, and imposing sanctions on, disclosure breaches.
Cross-border disclosure challenges
Mr Lan Qi, Board Secretary of China Merchants Bank, discussed an interesting case scenario in regulatory compliance – the experience of China Merchants Bank in its acquisition of Wing Lung Bank in Hong Kong in 1998 – highlighting the difficulties of making effective disclosures in multiple jurisdictions. He pointed out that the bank not only had to study the rules of the stock exchanges in Hong Kong and Shanghai in advance of the takeover, but to anticipate problems and issues that might arise and prepare corresponding solutions to ensure the transaction was made in an orderly and well-coordinated manner.
Many different problems came up relating to information disclosure during the transaction, Mr Lan pointed out. For example, trading had to be suspended when the sales and purchase agreement was signed. As the requirements of the listing rules in mainland China and Hong Kong were different, however, there were different views on whether there was the need to suspend trading and on the timing of the suspension. In the end, the issue had to be resolved by consultation. At an early stage of the deal, and when there was not yet any material progress in the negotiations, China Merchants Bank was very cautious in responding to market rumours. Even when the negotiations had come to the stage of material progress, not much could be disclosed to the public.
After signing the sales and purchase agreement, China Merchants Bank set up a telephone conference session to inform investors and analysts, Mr Lan said. The purchase of Wing Lung Bank was completed at the time of the global financial crisis, putting enormous market pressure on China Merchants Bank. At this juncture, it was all the more important to communicate proactively in order to enhance market acceptance and strengthen crisis management to handle unforeseen situations. The results of Wing Lung Bank in 2008 were greatly affected by the global financial crisis. Given the circumstances, China Merchants Bank drew up short-term and long-term communication plans for key stakeholders, giving them timely information on the progress of integration, the synergy achieved and the future development of the company’s business.
Finally, Mr Lan pointed out that financial markets are ever changing. After going public, a company changes its role and greater emphasis is put on corporate governance. Enterprises are often highly focused on operational efficiency, and may see corporate governance requirements as conflicting with that path. Compliance with governance rules certainly entails costs, but good corporate governance helps enterprises to control risks and improve efficiency. Emphasis should be placed on effective decision making and on maintaining a balance of power, he said.
Kenneth Ko, Journalist
中國是否朝著以原則為本的規管方向發 展？公會最近的中國企業規管最新發展 研討會上，討論了這課題，以及其他有 關內地公司治理和規管的重要議題。
自 1 9 9 9年起，公會每年均舉辦公司規 管最新發展研討會(ACRU)，至今已成 為公會持續專業發展活動中最受歡迎的 一項；去年的ACRU，便吸引了850位參 加者，是歷屆以來的最高紀錄。研討會 由監管機監的代表主講，為公司治理從 業員講解公司治理及法規方面的最新發 展；這簡單的模式相當成功，因此公會 以中國內地的公司治理及法規的新發展 為主題，在2006年開始主辦中國企業規 管最新發展研討會，同樣深受歡迎。
2013年中國企業規管最新發展研討會， 於2013年1月24日在香港舉行，討論內 地公司治理和法規方面的熱門課題，包 括由大股東主導的公司在治理方面所面 對的考驗、有關信息披露和上市公司內 部管控的現行法規，當然還有董事會秘 書在公司治理方面所擔當的角色。研討 會也介紹了內地監管機構日漸鼓勵企業 自發遵守公司治理最佳常規的做法。
深圳证券交易所公司管理部高級經理 邓翬女士在研讨会上，扼要地介绍了 内地上市公司治理规则架构及深交所 上市公司规范运作的指引，并深入地 分析上市公司治理现状及出现的不同 问题。其中，上市公司对实际控制人 高度依赖是一项挑战。她指出，公司 所有权与管理权高度合一，确有助于 提 升 企 业 的 经 营 效 率 和 灵 活 性 ， 不 过 ， 也 容 易 助 长 公 司 治 理 的 「 专 断 化」，多数民营上市公司次要股东未 形成对核心股东﹝实际控制人﹞的有 效股权制衡。总的来说，上市公司的 股权文化及意识有待加强和完善。
邓翬女士谈到董事会秘书和独立董事的 重要角色，强调董秘是资本市场的引路 人，也是公司治理规范运作的催化剂； 董秘在公司治理的地位较以往更为突 出，并且成为「抢手」的职业。
此外，公司治理法规规章强调，在上市 公司中必须聘任独立董事。独立董事作 为公司治理运作的重要角色，实践中既 可能是“监督者”，也可能是公司发展 的“咨询专家”。上市公司在法规要求 之外自主聘任的独董，例如身为行业专 家、退职官员的独董等，则主要就公司 的发展问题提供咨询意见。
公司治理面对着不同类型的隐患。邓 翬女士说，上市公司董事、监事和高 级管理人员，特别是实际控制人对公 司治理和规范运作方面的认识不足， 导致了上市公司在治理方面的不规范 的「非蓄意性」的治理隐患。部分上 市公司在公司治理方面心有余，而力 不足，无法依靠其自身力量建立起健 全的公司治理结构。而实际控制人、 董事、监事、高管等相关人员滥用职 权 ， 从 上 市 公 司 中 攫 取 不 正 当 的 利 益 ， 损 害 上 市 公 司 和 中 小 股 东 的 利 益，则属于典型的「明知故犯性」的 治理隐患。她还指出，公司治理在合 规遵循方面容易做表面文章，治理标 准难以全面量化、细化甚至明确化， 执行情况完全依靠自律和内控，或通 过披露体现，而存在的问题只有在爆 发时才被关注到。
研讨会上，上海证券交易所前副总经 理 周 勤 业 先 生 就 内 地 上 市 公 司 信 息 披露制度的变迁历程，分享其宝贵意 见。讨论内容详尽，自 1 9 9 0年代初， 按国家和地方人民政府制定的有关股 份制企业试点和股票发行的管理规定 进行信息披露，以至 1 9 9 7年证券法的 颁布和施行，多年来上市规则及信息 披露规定的重要内容和修订，都给予 深入浅出的解释。
他又提到内部会计控制披露的演变， 自 2 0 0 1年始财政部陆续颁布内部控制 规范，2008至2011年，上海证券交易 所更强制要求三类公司〈公司治理板块、金融类、同时在境外上市〉必须 披露内控报告。去年8月，中国财政部 及证监会发布《关于 2 0 1 2年主板上市 公司分类分批实施企业内部控制规范 体系的通知》，为稳步推进主板上市 公司有效实施内部控制规范，确保内 控体系建设落到实处，取得实效。
周勤业先生说，上市公司信息披露制度 发展已由充分性转向重要性和有用性， 致力减少强制性信息披露要求，鼓励自 愿性信息披露行为。总的来说，尽量减 少例行停牌，以提高市场效率；同时， 以电子化信息披露方式替代指定媒体披 露方式，综合报告替代财务报告和叙述 性报告。此外，新闻媒体及社会舆论都 能发挥监督作用，监管机构将继续加大 对信息披露违法违规行为的责任追究和 处罚力度。
另一位讲者招商银行股份有限公司董事 会秘书兰奇先生在会上讲述有关招商银 行在1998年收购香港永隆银行之合规实 践，反映信息披露要做到有效到位，殊 不简单。他说，该行就收购中的信息披 露事宜全面地提前部署组织，研究香港 与上海两地交易所的规则，制定详细的 工作计划与时间表，并预计可能出现的 问题、难点及应对措施，实行之时要统 一有序地组织与协调。
兰奇先生指出，在收购的信息披露工 作 中 的 确 遇 到 不 同 的 问 题 ， 例 如 签 署买卖协议日的停牌安排，由于中港 两地上市规则差异，对需否停牌及何 时停牌持不同意见，最终通过协商解 决。在收购工作前期及谈判未有实质 性进展阶段，招商银行对市场传闻的 响应非常审慎，即使谈判具有实质性 进展阶段，也不能对外透露太多。 他说，该行签署买卖协议后便举办通 报电话会议，向投资者及分析师通报 情况。完成收购永隆银行时正值环球 金融危机爆发，招商银行面对强大的 市场压力，更要主动开展沟通，增强 认同度，并加强危机管理，应对突发 事件。在全球金融危机背景下，永隆 银行 2 0 0 8年的业绩大幅下滑，招商银 行便制定与各关键利益方的短期和长 期沟通方案，让他们及时了解整合过 程与协同效应情况，及公司未来业务 发展。
金融市场瞬息万变，发行人上市后角色 转换，令公司治理面对更大压力。企业 追求经营效率与完善治理监督是相辅相 成的矛盾统一体，企业要遵循诸多治理 规则规定也涉及成本问题。因此，公司 治理的目标是通过外部管制及公司自 治，防控风险，提高绩效，强调科学有 效的决策及权力的制衡。
邓翬女士说，研究表明法律、法规、自 律性规则及指引、公司内部章程等规范 能够形成多层次、相互协调的公司治理 的规范体系，在各自领域发挥着各自的 作用；此外还应考虑中小民营企业的特 点，更多地运用资本、市场、诚信约束 机制，以自律、自治、合作式博弈的方 式解决治理转型问题。而董秘是向实际 控制人灌输现代公司治理理念的贴身人 士，有经验的董秘还充当资本市场的引 路人和公司治理规范运作的催化剂的角 色。此外，完善上市公司治理还需要关 注治理成本问题，要摒弃「迭加式」的 歧径，应借鉴国际上市公司治理机制 「简单化」和「灵活化」的立法思路， 根据上市公司的群体特征和个性化需 求，探索建立适合不同性质上市公司自 身特点的区别化的公司治理机制。