In what respects is CG different in China from other international

markets
CG in China

There was political involvement in the

corporate governance practices of the
companies

Any legal issues relating to corporate

governance were exercised under the chinas
jurisdiction and not under the international
law

Shareholders had limited legal remedies

The key aspect of corporate governance was

to promote foreign investors to provide
funds for economic development.

Under the Chinese CG governance guidelines

CEO of the listed companies is not required
to certify that the company has not violated
any corporate governance practices

CG in international markets

There is no political involvement in corporate

governance practices of the companies

Any legal issues relating to corporate

governance in the world arena were
exercised as per the international corporate
governance guidelines

Shareholders have ownership in all the legal

decision makings of the company

corporate governance principles lies in the

enhancement of shareholder value

Under the international CG governance

guidelines CEO of the listed companies has to
certify that the company has not violated any
corporate governance practices.

Shareholders Rights - China Vs. OECD principles

Basic shareholder rights as per OECD should include :
(1) secure methods of ownership registration.
(2) convey or transfer shares.
(3) obtain relevant and material information on the
corporation on a timely and regular basis.
(4) participate and vote in general shareholders
meetings.
(5) elect and remove members of the board.
(6) share in the profits of the corporation.

Shareholders Rights - China Vs. OECD principles

Ground Realities in China :

1.
2.
3.

4.

A securities registration and clearing institution performs the functions of

custody and transfer of ownership of securities and registration of the names of
the security holders. So China scores well in this OECD norm.
For a shareholder of a listed company, shares may be transferred directly
through stock exchanges automatic bidding system within trading hours and
according to stock exchange trading rules.
Any shareholder can at any time demand to inspect articles of association, the
record of shareholders, the corporate bond counterfoils, the minutes of general
shareholders meetings, the minutes of board of directors and board of
supervisors meetings, and the financial and accounting reports of the company.
The Company Law has no restriction on shareholdersparticipation in general
shareholders meetings. According to the Company Law, when a shareholder
attends AGM, each share he holds is entitled to one vote. Shares held by the
company itself do not have voting rights.

Ground Realities in China :

5. Shareholders can exercise their right to elect or replace board members by
participation in AGMs, also shareholders having more than 3% shares can
propose names for BOD.