Vice President Zhou Qinye of the Shanghai Stock Exchange (SSE), who attended the symposium "Give Full Play to Capital Market for Central China Rise", said in an interview with the Shanghai Securities News that corporate governance should step quickly into the 2nd stage at a higher level to highlight the social function and responsibility of listed companies for their positive roles in social obligation.
Zhou held that too simple requirements in corporate governance for listed companies, including sound structures, system establishment and strict fulfillment of information disclosure, though indispensable, are only the primary stage of corporate governance.
Tapping the fruits of China's capital market, listed companies should upgrade their corporate governance to a higher level. Besides, their expansion should be in line with the development of the whole society. In terms of social service, social security, legitimate tax payment and environmental protection, listed companies should assume more social functions and responsibilities. For example, some listed companies' profit and performance increase are at the cost of environment pollution. This profit model, bringing abundant returns to listed companies and their shareholders at the expense of the society, has violated the basic requirement for social progress.
In addition, to maximize shareholders' benefits on the part of listed companies does not always mean maximizing companies' benefits. But, to maximize companies' benefits guarantees, to a certain extent, the maximization of shareholders' benefits. So, corporate governance should establish a balanced profit maximization mechanism between companies and shareholders instead of the unilateral one.
Zhou also stressed that corporate governance should change the Shareholders' Meeting from a mere formality into a true authority.
To make listed companies assume more social functions and responsibilities, as revealed by Zhou, the SSE considers establishing corresponding mechanisms and evaluation systems to promote their development to a higher level. Only in this way, can listed companies be developed into "Centuries-old Shops".
