Question

List the legal requirements of the framework for China’s corporate governance.

Answer 1

Chinese definitions of corporate governance in the abstract tend to cover the system regulating relationships among all parties with interests in a business organization, usually spelling out shareholders as a particularly important group.

Currently the main legislation is as follows:

1) The Foreign Investment Law of the PRC, which applies to all foreign-funded enterprises, will become effective from 1 January 2020.

2) The Company Law, which applies to all corporate entities.

3) The Securities Law of the PRC, which mainly applies to public companies, whether listed or not.

4) Measures for the Supervision and Administration of State-owned Equities of Listed Companies, to regulate changes in state-owned shares of listed companies.

5) Various regulations, measures and guiding opinions, including but not limited to the Code of Corporate Governance of Listed Companies, issued by the Securities Regulatory Committee of the PRC (CSRC) and other authorities, which apply to listed companies.

6) Various laws and regulations governing corporate governance of state-owned enterprises (SOEs).

There are laws governing various corporate social responsibilities, such as PRC employment laws, environment laws and consumer laws.