Guidance of the China Banking Regulatory Commission on the Corporation Governance Reform and Supervision of Bank of China and China Construction Bank
Guidance of the China Banking Regulatory Commission on the Corporation Governance Reform and Supervision of Bank of China and China Construction Bank
Guidance of the China Banking Regulatory Commission on the Corporation Governance Reform and Supervision of Bank of China and China Construction Bank
March 11, 2004
Chapter I General Provisions
Article 1 Joint-stock reform for state-owned commercial banks is a brand new reform practice in China's financial sector with great significance. The present Guidance is hereby formulated with a view to ensuring the successful joint-stock reform experiments with the Bank of China and China Construction Bank (hereinafter referred to as the two pilot banks).
Article 2 The general goal of the joint-stock reform for the two pilot banks is to lay special stress on such central links as reforming the management system, perfecting the governance structure, transforming the operational system and improving the effect of operation and to transform the two pilot banks into two modernized joint-stock commercial banks with adequate capital, strict internal control, safe operation, sound service and benefit and international competitiveness within about three years.
Article 3 Through reform, the two pilot banks shall reach and remain at above the medium-level of the world's top one hundred big banks by corporate governance structure and internationally prevailing financial indicators.
Chapter II Reform of Corporation Governance
Article 4 The two pilot banks shall establish a standard shareholders' general meeting, a standard board of directors, a standard supervisory board and a standard system of senior management respectively.
The shareholders' general meeting, board of directors, supervisory board and the system of senior management of the two pilot banks shall be set up on the principles of separate establishment, separate three powers, effective constraint and coordinated development in accordance with the requirements of modern corporate governance structure. A standard organizational framework shall be formed by joint-stock commercial banks in accordance with the related provisions of the Corporate Law as well as other laws and regulations so as to ensure independent operation and effective check and balance of various parties through a scientific and efficient system of decision making, enforcement and supervision.
Article 5 The two pilot banks shall fairly and impartially choose strategic investors from home and abroad so as to change the unitary structure of stock equity and realize diversification of investors.
By introducing strategic investors especially foreign strategic investors, the two pilot banks shall not only enhance capital strength and improve their respective capital structure but also use for reference internationally advanced managerial experience, techniques and methods, thus promoting their managerial modalities and operational concept to be compatible with those of internationally advanced banks, and optimizing the corporate governance mechanism.
Article 6 The two pilot banks shall formulate clear and definite developing strategies so as to maximize value of the banks.
The two pilot banks shall proceed from their own conditions and the market guidance, identify their core competitive advantages and market competitive advantages and formulate comprehensive development strategies in accordance with their development goals.
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