On 14 April 2023, the General Office of the State Council issued the Opinions on the Reform of the Independent Director System of Listed Companies (hereinafter referred to as the Opinions) to the public. The Opinions has followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and fully and faithfully applied the new development philosophy on all fronts. With serving high-quality economic development as its inherent requirement, the Opinions has, based on the national conditions and capital market realities in China, put forward eight reform tasks, namely, to clearly define the job positioning of independent directors, to optimize the ways that independent directors perform their duties, to strengthen qualification management of independent directors, to refine the selection and appointment system of independent directors, to enhance guarantee for duty performance by independent directors, to intensify oversight and management of duty performance by independent directors, to improve the responsibility restraint mechanism of independent directors, and to refine the synergetic and efficient internal and external supervision system. The Opinions has pointed out a direction and provided guidelines for further optimizing the independent director system of listed companies.
The Opinions has fully reflected the great attention that the CPC Central Committee and the State Council have paid to establishing and improving the modern corporate structure with Chinese characteristics and the modern capital market with Chinese characteristics. It is an important embodiment of the in-depth implementation of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and is of great significance to refining the governance structure of listed companies, improving the level of governance of listed companies, and promoting normative development of listed companies. As the self-regulatory organization and service institution that performs the duties as the front-line regulator of the capital market, SZSE will firmly put into place the major decisions and plans of the CPC Central Committee and the State Council. We will, under the strong leadership of CSRC, earnestly study and fully implement relevant requirements laid out in the Opinions, include the reform of the independent director system as important content of our Work Plan to Implement the Three-year Action Plan for Improving the Quality of Listed Companies (2022-2025), and closely integrate it with relevant efforts to continue to deepen the remediation of problems found by the central inspection team. We will take solid steps to see that the following three tasks are properly accomplished.
First, to optimize the system of policies and regulations. We will revise relevant self-discipline rules of the Main Board and the ChiNext Board including the Rules Governing Share Listing and the Guidelines for the Standard Operation of Listed Companies, further clarify the role and positioning of independent directors, optimize the selection and appointment system of independent directors, strengthen duty performance management of independent directors, improve the ways that independent directors perform their duties, and ensure independent directors’ rights and interests.
Second, to innovate in service supply. We will carefully listen to independent directors’ requirements, opinions and advice on system implementation, duty performance, etc. by holding seminars, conducting surveys, etc. to improve the duty performance environment for independent directors. Meanwhile, we will be more proactive in providing services, continue to enrich training contents, optimize the training mode, facilitate market entities, and improve the feedback mechanism of independent directors, to help independent directors adapt to the changes of the reform faster and better perform their supervision duties.
Third, to implement stricter self-discipline management. We will further intensify self-discipline management of duty performance by independent directors according to the guiding principles of the Opinions. We will strictly review independent directors’ job qualifications, pay attention to independent directors’ duty performance input, duty performance guarantee, number of companies in which they serve as part-time independent directors, etc. in daily supervision, ensure that independent directors’ duties are fully and earnestly performed, and standardize independent directors’ duty-performing behaviors.
SZSE will, under the unified leadership of CSRC, firmly grasp the mission and task of building a modern capital market with Chinese characteristics, give full play to the exchange’s advantages as the front-line regulator, and strengthen the awareness of proactive service. With improving the level of governance of listed companies as the main task, we will work to comprehensively implement the reform of the independent director system, and take a combination of measures and forge consensus to build the culture of a modern corporate structure with Chinese characteristics and better serve high-quality economic development.
