Beijing, April 4 (ZXS) -- The China Securities Regulatory Commission said on 14 April that the General Office of China's State Council issued the "Opinions on the Reform of the Independent Director System of Listed Companies" (hereinafter referred to as the "Opinions").
The relevant person in charge of the CSRC said that the Opinions put forward reform measures from eight aspects, including clarifying the position of the responsibilities of independent directors and optimizing the way independent directors perform their duties, which pointed out the direction and provided guidance for further optimizing the independent director system of listed companies.
In terms of clarifying the positioning of responsibilities, the Opinions focus the supervision of independent directors on potential major conflicts of interest between the company and its controlling shareholders, actual controllers, directors and senior management, and strengthen the supervisory role of independent directors in key areas such as related party transactions, financial and accounting reports, appointment and removal of directors and senior management, and remuneration.
In terms of innovative selection and employment management, the Opinions propose to improve the system of independent directors' terms of office, nomination and election, continuous management and other links. This includes the establishment of an independent director qualification system, emphasizing that independent directors must not have an interest in the listed company, its major shareholders and actual controllers; Require the nomination committee to review the qualifications of independent directors, implement a cumulative voting system to elect independent directors, and promote the active exercise of rights by minority shareholders; Establish independent regular testing and disclosure mechanisms, etc.
In terms of optimizing the way of performing duties, the Opinions add means of performance by which independent directors are different from other directors. On the one hand, build a platform for independent directors to effectively perform their duties, improve the special committee mechanism of the board of directors such as audit, nomination, and remuneration where independent directors account for the majority, and establish a special meeting mechanism with all independent directors participating. On the other hand, major matters such as financial accounting reports and their disclosures should be approved in advance by the audit committee before deliberation by the board of directors, and potentially major conflicts of interest such as related party transactions should be approved in advance by a special meeting of independent directors, so as to strengthen supervision in key areas.
In terms of strengthening the protection of performance of duties, the Opinions require listed companies to provide necessary conditions for independent directors to perform their duties in terms of organization, personnel, resources, information and funds, ensure that independent directors fully perform their duties in accordance with the law, strengthen the supervision and management of relevant entities that do not cooperate with or obstruct independent directors' performance of duties, support insurance companies in carrying out relevant liability insurance business that meets the needs of listed companies, and reduce the risk of independent directors performing their duties normally. At the same time, by improving the evaluation system for independent directors' performance of duties and establishing a reputation incentive and constraint mechanism, we will further stimulate the enthusiasm of independent directors to perform their duties.
In terms of compacting the responsibility for performing duties, the Opinions require that the daily performance of duties by independent directors be further regulated, and that the performance of duties by independent directors be regulated in terms of working hours, work records, and the number of part-time employees. Securities regulatory authorities and stock exchanges have strengthened supervision over the performance of duties by independent directors through on-site inspections, off-site supervision and self-discipline management, and urged independent directors to be diligent and conscientious. Increase the intensity of accountability for independent directors' failure to perform their duties and responsibilities, and strictly pursue independent directors who do not diligently perform their statutory duties and harm the legitimate rights and interests of the company or shareholders in accordance with the law. (End)