CSRC launches special action on corporate governance of listed companies.

Corporate governance is the cornerstone of the high-quality development of listed companies. To promote the implementation of the latest revised "Listing Company Governance Guidelines" and other institutional rules, to build a strong first line of defense against financial fraud, the China Securities Regulatory Commission (CSRC) initiated a special action on corporate governance for listed companies starting from April. The goal is to leverage the role of the capital market in improving corporate governance, foster an ecosystem where all parties actively fulfill their responsibilities, balance each other, and support enterprises in making sound decisions. The action focuses on eight aspects. Firstly, highlight effectiveness. Actively promote the implementation of various systems and rules to create a good demonstration effect. Secondly, focus on key areas. Focus on key areas and strive to use typical cases as "small incisions" to guide the standard operation of "major articles". Thirdly, coordinate internally and externally. Adhere to both corporate autonomy and regulatory constraints, and stimulate intrinsic motivation. The action focuses on eight aspects. First, improve the performance of board secretaries. Formulate and issue the "Regulations on the Supervision of Board Secretaries of Listed Companies." Encourage companies with long vacancies in the position of board secretary to hire in a timely manner and replace those who do not meet the requirements. Second, support the nomination of independent directors by third parties. Support the Securities Association to publicly nominate independent directors through open solicitation and joint exercise of voting rights, and encourage public fund managers to participate. Third, support special inspections by audit committees. Focus on non-standard matters in annual reports and internal control audits, financial issues, etc. Support audit committees in reporting to regulators. Fourth, urge companies engaged in fraud to recover excessive executive compensation. Urge listed companies to improve their internal compensation management systems. For listed companies engaged in financial fraud where compensation is linked to performance, urge the recovery of excessive executive compensation corresponding to false performance. Fifth, urge major shareholders to return occupied funds. While imposing strict penalties, support the board of directors, audit committees, and other major shareholders in pursuing civil compensation to actively safeguard the interests of the company. Sixth, support the exercise of voting rights by the Securities Association. Enhance the specificity and effectiveness of exercising rights, thus providing an organic supplement to administrative supervision. Seventh, guide eligible listed companies to strengthen the integration of business and financial systems. Encourage companies to optimize management processes through digitization, enhance the consistency between business data and accounting data, and improve the effectiveness of internal controls. Eighth, organize training on the "Listing Company Governance Guidelines." The CSRC will organize and promote a number of typical cases, continuously deepen corporate governance regulatory constraints, create a favorable environment for the standardized development of listed companies, promote the improvement of the quality of listed companies, and facilitate the continuous stable and healthy development of the capital market.