Shanghai Stock Exchange: 11th China Corporate Governance Forum Held In Shanghai

Sponsored by the Shanghai Stock Exchange (SSE) and the China Association for Public Companies (CAPCO), the 11th China Corporate Governance Forum themed "Rewards to Shareholders and Corporate Governance", under the auspices of the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council and the Organization for Economic Cooperation and Development (OECD), was held in Shanghai on December 19, 2012 to mark the 22nd birthday of the SSE. SSE President Huang Hongyuan presided over the opening ceremony of the forum. The officials present conferred two special awards, namely the Award for Board of Director in 2012 and the Award for Information Disclosure in 2012, on prize-winning listed companies.

Present at the ceremony were Chen Qingtai, Chairman of the CAPCO, Zhuang Xinyi, Vice Chairman of the China Securities Regulatory Commission (CSRC), Shao Ning, Deputy Director of the SASAC of the State Council, Tu Guangshao, Vice Mayor of Shanghai, Li Xiaoxue, Executive Vice Chairman of the CAPCO, Chen Dongzheng, Governor of the Shenzhen Stock Exchange, and Gui Minjie, Governor of the SSE. Also attending the forum were representatives from the CSRC, the SASAC of the State Council, the CAPCO, the OECD, listed companies, institutional investors at home and aboard, intermediaries, and news media, as well as experts and scholars.

Zhuang Xinyi pointed out that full play should be given to the roles of information disclosure, small and medium-sized investors, and administrative supervision in the corporate governance. Sound and transparent information disclosure are helpful in the examination and evaluation on the corporate governance, thus enabling the market to reward and punish companies according to their deeds and to ensure survival of the fittest. In light of the current limited role of small and medium-sized investors in the corporate governance, it is suggested that communication technologies be applied to provide direct channels and interactive platforms characterized by further diversity and convenience for small and medium-sized investors. Intermediaries could conduct the entrusted management business of shareholders' interests, so that they could collect thoughts and requirements of small and medium-sized shareholders for exercising voting rights and making proposals on their behalf. Furthermore, regulatory authorities should guard bottom lines, crack down on illegal behaviors including occupation, fraud, and false disclosure, build up and defend for the integrity system, and cement integrity-oriented constraints in the market. Besides, these authorities should analyze and compare all kinds of information, detect and track relevant problems, apart from publicizing regulatory information to propel the transparency. 

Chen Qingtai said that as corporate governance is the most important systematical construction in China's micro-economy, China's capital market, a strong force to drive the domestic corporate governance, should build itself into an incubator of globally competitive companies. As the gist of corporate governance is to safeguard shareholders' rights and interests, efforts should be made to boost the corporate governance in the following aspects. On one hand, supervision on executives of companies should be intensified to prevent them from turning into internal controllers; on the other hand, controlling shareholders are required to exercise self-discipline according to the "Company Law".

Shao Ning stressed that a great progress has been made in the capitalization of state-owned assets as listed companies witnessed the capitalization of 69.7% of the central state-owned enterprises' total net assets. The reform's effects are outstanding as listed companies are under the regulation of the capital market and the supervision of public investors, with their operational transparency and standardization improved substantially.

After extending congratulations on the opening of the forum on behalf of the Shanghai Municipal Government, Tu Guangshao held that the proper treatment of rewards to shareholders and corporate governance not only responds to the issues concerned by shareholders but also exerts positive effects on the securities market's development. The government has always attached great importance to the growth of listed companies. Specifically, the government encourages enterprises to go public and promotes the overall listing of listed companies by taking advantage of the capital market, with an aim of realizing resource allocation and structural adjustment, as well as increasing the securitization ratio. Besides, the government has consummated a series of policies to drive the corporate governance, so as to pave a solid foundation for the municipality's economic and social growth.

Finally, Gui Minjie emphasized that corporate governance is not only the foundation of an enterprise's sustainable growth, but also a key to the formation of a mature capital market. Sound corporate governance calls for concerted efforts from all walks of life. Over the past years, the SSE and the listed companies have jointly conducted extensive research, discussion, and promotion in terms of best practices, investor protection, directorate operation, information disclosure, social responsibility, and others in the corporate governance. In future, the SSE will improve the governance mechanism for the complete process of restructuring, shares issuance, regulation, and delisting, as well as further give full play to the fundamental role of the market in the corporate governance. Moreover, efforts should be made to create a good cyclical system featuring "Survival of The Fittest", facilitate the reinforced rationalization of listed companies, and enhance the capital market's capability of serving the real economy, in addition to building up and perfecting the investor protection system for elevating the constraints of small and medium-sized shareholders towards listed companies and relevant major shareholders.

Representatives present at the forum conducted heated and effective discussions on the two topics, namely, "Rewards to Shareholders and Sound Development of Securities Market" and "Rewards to Shareholders and Growth of Institutional Investors".

It is learnt that the China Corporate Governance Forum has been held successively since 2002. From 2009, the special awards for corporate governance have been granted at the annual event to excellent representatives in the corporate governance. The forum has contributed to the progress of the domestic corporate governance as it has spread advanced experience and presented exemplary models for the corporate governance, and consistently improved the governance of listed companies.